What affects photocopier rent prices? You may have two companies offing you a photocopier at the same cash price, let’s say its £5000, then when you come to sign the agreement the company says you could lease it over a longer period of time so you’re not paying the whole amount upfront.
Even though both companies have the same cash amount, the total you pay for the copier for the full period could be vastly different on that same amount of £5000.
You could pay over £7350 or you could pay £5800 for the same 5 years term. What would cause such vast differences?
Every photocopier company goes to a renting company and depending on how much business they are likely to do they will give the dealer rates that they can use, 5 years, 4 years, 3 years and 2 years.
This is on the assumption the companies they are going to propose to do business with are good financially.
This rate can vary vastly from dealer to dealer and even if a large company gets a good rate they may not give this rate to sales guy to pass on to the customer by giving inflated rates to sales.
So what could cost the dealer to lease £5800 could be passed on to the company (customer) at £7350 and even the salesperson does know and benefit from this.
Typically rates can range from anywhere between 58 to 75 on a 5 year agreement.
To calculate a rate you take the capital or machine price and multiply this by the rate and divide by 1000, this will give you the quarterly payment amount.
Photocopier initial rental payments: All lease companies work with profiles, it could be a 1 + 19 or 2 + 20. This means you will be paying 1 payment upfront followed by 19 quarterly payments.
This can vary considerably and it affects the rate given so you could have a 3 + 19 rate in which the company leasing the photocopier will need to pay 3 payments on the first payment or 9 months of payments in advance in order to get the better rate.
This lowers the risk to the rental company and can increase the profit for the lease company and dealer.
Photocopier post rent payments: This is a key one to be aware of as is very difficult to know you are entering this type of agreement, but it basically is payments at the end of a lease.
Sometimes it can be small like £50 to retain the title of the equipment or it can be £1000’s in a balloon payment (money held to lower the quarterly or monthly price but means a large payment at the end) or to retain the title of the equipment.
This all has to be agreed and looked at at the start of the agreement, looking at it when the agreement has started is too late, you’re then just waiting for the bill to come.
Photocopier rent admin fees: Rental companies charge admin fees usually from £100 to £200 per deal and this is taken in the first payment, many copier sales-people do not show this on the proposals so its always worth asking the question, what is the admin fees?
Many lease companies charge other admin fees like late payment, annual fees, invoicing fees, collection fees (this could also be in the service contract) so it’s worth asking the question before you sign any lease to ensure you know what additional charges there will be.
I came across one rental company charging part month fees, this is where say your agreement starts on the 15th of the month, instead of just charging you the monthly amount each month from the first day of the month they would charge you the difference from the 15th to the first in the first payment.
They were passing this as a better lease rate to be more competitive but I think this was rarely getting to the customer and was more as profit for the dealer or to make the dealer more competitive.
The rate the copier company gets assumes you have good accounts. If you have bad accounts (i.e. poor net worth or no money, running at a loss) then IF you can get a lease, expect to pay more.
The rental companies will increase the rate the dealers have to pay to cover the increased risk of your company going under.
Some rental companies may reject to lease to you all together, then the dealer will need to go to a lease company or broker to see who will take it even at a high rate.
The cost may be swallowed by the dealer’s profit or they may come back to you with an increased price.
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