financing
regardless what vendors tell you - finacing is always more expensive than cash. there is no free lunch. please see finance rates below.
one word about financing options: not every "cheaper" lease is really cheaper. there is a reason that contracts are written in a small font. unfortunatley we saw that almost no customer is asking a lawyer ($150 per hour) for advise on the contract. so most customers are making several thousand dollar decisions, without really knowing what the terms and conditions really mean.
next - hidden fees - hidden charges: ask your vendor to provide you a total cost analysis. what is the real cost for your equipment.
1. FMV - lease termination fees: Fair Market Value leases appear cheapter, but normally you pay for the "Fair Market Value" later. One danger of the FMV-lease: if you do not cancel the lease in time some vendors automatically extend the lease by a month, a quarter or even longer.
2. $1 buy out lease: this option is normally more expensive, but after the lease term you own the unit after paying the $1. and if the machine is still good and works well, why not keeping the unit. the downside of this option is that you need to pay the sales tax upfront.
3. $101 - buy out lease: works similar to the $1 buy out option but the sales tax is due within the monthly payments. with this option do not get hit with the sales tax upfront.
4. removal fees: what a sad awakening when you receive the bill from your copier vendor to remove the copier at YOUR cost to the destination the vendor selects. one customer even told us that a national reseller aske them to pay $600 to send a fax machine from St Petersburg to New Jersey. "but" the sales rep added "for only $150 more you can buy the fax." by the way you pay for the vendor to ship to his choosen destination and you are normally liable for the unit unit it arrives at the location. (remember the small font of the contract).
5. property tax - insurance: normally your lease excluded these two costs. the leasing company requires proof of insurance and does the ucc-filing. so you receive in the 2nd half a property tax bill. one option is to have this cost included in the lease, but this will certainly increase the lease amount.
6. inhouse financing - 3rd party financing: both options have advantages and disadvantages. the advantage of inhouse financing is that you have one contract for the equipment and for service. the disadvantage is that it is difficult to switch service plans to lower your cost. also if you are in a dispute with the vendor they can shut you down completely. the opposite applies for the 3rd party financing.
Summary:
if you have to or want to finance, we belive that the best finance option is the $101 buyout. after paying the $101 you own the machine. the sales tax is paid within the monthly note minders instead of upfront.
xerox office machines are very very reliable and after the typical lease term (36, 48 or 60) the machines are normally still working well. so there might not be a need to upgrade at that time.
but if you upgrade you are not locked into a specific vendor with likely penalties. every vendor is normally delighted to trade-in your still working xerox machine and make some money in the used equipment market.
the only drawback is that for the $101 buyout lease you pay a little bit more upfront but you will save the money in the long term.
lease rates:
we work with a local 3rd party leasing company right here in tampa bay. finance amounts start at $3,000. you need to be in business for min. 2 years. there is a $125 lease application fee per leased unit and two months deposit which can be applied to the first and last month of the lease:
calculate your monthly payments: multiply your equipment cost with the lease term factor and you receive your lease payment
$101 BUY-OUT*
Lease Term 24 36 48 60
$3,000-$5,000 .0571 .0409 .0333 .0289
$5,001-$10,000 .0511 .0362 .0288 .0244
$10,001-$25,000 .0493 .0344 .0274 .0231
$25,001-$75,000 .0480 .0339 .0269 .0225
Example: $10,001 financed at 60 month would be:
$10,001 x 0.0231 = $231 per month
FMV or 10% buy-out lease*
Lease Term 24 36 48 60
$3,000-$5,000 .0534 .0388 .0321 .0281
$5,001-$10,000 .0471 .0337 .0275 .0235
$10,001-$25,000 .0453 .0322 .0259 .0218
$25,001-$75,000 .0448 .0316 .0251 .0214
Example: $10,001 financed at 60 month would be:
$10,001 x 0.0218 = $218 per month
* displayed finance rates can change without notice.