When you signed your last copier lease, did you happen to take the time to read that lease? How about the maintenance agreement? If you're like most lessees, you probably skimmed over the verbiage on the lease and then signed the maintenance agreement without reading the T's & C's.
Not reading those T's & C's could lead to some problems in the future, because there are clauses in those agreements that will increase your costs.
1) Maintenance included with the lease: Some leases have a clause that allows the lessor to raise your monthly payment for hardware and maintenance/supplies by 10% or more per year.
2) Insurance with the lease: Yes, you are required to have insurance on the leased equipment. Most leasing companies will bill you for insurance which is added to the monthly payment. This is an additional profit center for some leasing companies.
3) Escalating Maintenance/Supply Agreement: Almost all maintenance/supply agreements have a built in annual escalator clause. In most cases there is a clause that states something like, "we may raise your rate annually". All maintenance/supply agreements are raised annually, because as the systems get older, they are more costly to maintain. However, there have been instances where the annual cost can increase as much as 25% each year.
4) Return of Leased Equipment: At the end of the lease it is the lessees responsibility to de-install, perform any repairs, pack and ship the copier back to the leasing companies facility at the cost of the lessee.
5) Early Termination of the Lease: The lessor can charge an early return fee along with the remaining stream of payments in order for the lessee to return the copier before the end of the term.
6) End of Lease Notification: All copier leases have an end of lease notification clause. Some are palatable, like the 30 day notification before the end of the lease. Others only give you a "window" of when the lessor can be notified that the clients intent is to return the equipment at the end of the lease. If you don't execute your letter of intent to the leasing company on time, they can charge additional lease/rent payments.
Now that you know these six potential pitfalls with a copier lease, it's up to you to read the lease, read the maintenance/supply agreement. If you have a questions, then ask. It's your money.
Below are some questions I would ask for each one of the above questions.
1) Do I have to have maintenance/supplies included in the lease?
Can we negotiate the cost of the annual increase?
2) Can I use submit a rider to the leasing company listing them as the loss payee incase of a catastrophic loss?
3) Can we negotiate the annual increase for the maintenance/supply agreement?
What is the percentage for the annual increase for each year of the lease?
4) If we upgrade our current lease with your dealership, can you take care of the return costs & shipment?
5) What is the cost for early termination?
6) Is there a chance to get this changed to a 30 day notification clause?
Questions, comments? Please leave them in the reply below of feel free to email me apost@p4pHotel.com
For those of us that are in the business. I thought I would write this for all of us to use this for those prospects and clients that are not familiar with copiers leases. In addition, this blog brings awareness that there are some vendors that have clauses in their leases that, well let's say that they are not in the best interest of the client. Fell free to share, print and email.
-=Good Selling=-
Comments (5)