If you’ve been charged with replacing your office copier or printer, you might be wondering if it’s better to lease or buy. Both options have pros and cons and it really depends on your specific business needs.
Here are some of the pros and cons to help you reach a practical decision for your next device:
First, you need to understand the two leasing options available: operating leases and capital leases.
- Operations Leases: The most popular option because the monthly costs are lower. Basically, you’re renting a piece of equipment so it never shows up on your balance sheet. If you don’t want the hassles of owning and always want to update technology an operating lease is a practical choice.
- Capital Leases: Also known as $1 buy outs, these are less common. It’s more of a loan than a rental. Interest and principal go towards the price of the copier or printer and it is an asset on the corporate balance sheet. The monthly cost is higher. If you want to buy, but don’t want to outlay the entire price up front, a capital lease is an option.
Leasing Pros and Cons
Here are some of the pros and cons of leasing:
- Leasing means you always have the latest technology
- Lower upfront costs
- There are no resale or disposal costs and most leases include maintenance plans
- You will spend more over a lease than the price of the equipment
- If your needs change, you may not be able to get out of your contract
Buying Pros and Cons
Like leasing, buying offers both benefits and drawbacks, they include:
- Buying is a less expensive option
- Because you own the equipment you can sell it at any time and recoup some of your investment
- When you purchase, there are no contracts involved
- When you own the equipment you can choose your repair technician, unlike with a lease
- Initial expense
- When you need to replace your equipment, you need to pay the entire purchase price
There are tax implications for both buying and leasing. It’s a good idea to discuss these with your accountant. Ultimately the final decision to lease or buy comes down to your operational and cash flow needs. Want to learn more? Contact us today and we’d be happy to answer any questions you may have.