There is a fundamental misunderstanding floating around about leases that could needlessly cost businesses thousands of dollars. The company in question could be coming up at the end of their contract, and their copier rep sends them this great-sounding deal of a free upgrade if they sign another lease and update their copier with them.
Why Is a Copier Company Giving You This Offer Now?
The “free” upgrade strategy is a fantastic way for copier companies to wipe out their competition before your lease runs out.
Copier companies need sales, and leasing companies want new contracts. To make sure these companies meet their goals, they form an alliance to craft a deal that sounds great on the surface but will gut your wallet down the road.
The leasing company will tell the copier company they will forgive a payment or two as long as they can get you to sign another long term contract. They will also defer a few payments on occasion.
A copier company will look at the equipment part of the lease (which adds up to half of the total price) and see if they can wrap this price into the next contract and remain under retail price. They will go to the manufacturer to see if they’re running any specials. Instead of passing the savings of that special onto you, they use these savings to make the remainder of the payments.
Why Is a Free Upgrade Deal Bad For Your Company?
There are three reasons why a free upgrade is a bad idea for your business:
- If the discount would’ve been made available to you, you could’ve bought the copier at a much lower cost had you not been locked into your current lease.
- The entire process is easily wrapped up into a five-year lease to make the financials look right. Copier technology changes at a rapid pace, and at year four, you will likely want to make an upgrade. If you were to ride out your current lease before upgrading, you could pay a lot less per month for the life of your next contract.
- You give all of your leverage to the leasing company and the copier company. By taking this free upgrade deal, you stop your copier company’s competitors from offering you a lower, more competitive rate. You stopped competition from taking its course.
Patience Is a Virtue You Must Have to Get the Best Price on Your Next Copier Lease.
Don’t allow yourself to jump the gun and get yourself tied into a new lease before you finish your current one. Let your current contract run its course. Through the miracle of competition, you will put your business in a stronger position to negotiate a better lease agreement that will save you thousands of dollars over the life of your next lease.