Buy or Lease Office Equipment? 8 Reasons to Consider Buying

For many small and mid-sized businesses, buying office equipment is the simpler and more economical choice, especially for machines they plan to keep for several years. Leasing makes more sense when spreading the cost and upgrading on a schedule matter more than ownership.

An equipment lease is a contract that lets a business use a machine for a fixed term in return for regular payments, with ownership usually staying with the leasing company unless the machine is bought out at the end. A purchase transfers ownership to you straight away.

The decision applies to copiers, printers, scanners, shredders and most other office machines, but it matters most for larger business copiers, where both the up-front price and the lease commitment are bigger. Below are eight reasons buying often comes out ahead, followed by a fair look at when a lease is the better fit.

Business copiers are complex machines that scan, print and often fax and finish documents; Wikipedia's photocopier article gives useful background on how they work. Because they are built to run for years, how you pay for one has a long tail. A decision made quickly at signing can shape your costs, your service options and your flexibility for a long time afterward.

The eight main reasons to buy are ownership, no long-term contract, no return conditions, freedom over service and supplies, lower lifetime cost, flexibility, affordable reconditioned options and simpler paperwork.

1. You own the equipment. The machine is a business asset from day one. You can use it for as long as it works well for you.
2. No long-term contract. There is no multi-year agreement to manage, renew or exit, and no risk of being tied to a machine your office has outgrown.
3. No end-of-lease return conditions. Leases can require the machine to be returned in a set condition, packed and shipped a certain way, sometimes at your expense. Owners skip all of this.
4. Freedom to choose service and supplies. You decide who services the machine and where you buy toner, drums and parts, so you can shop around.
5. Often lower total cost. Lease payments include the leasing company's financing costs. Over the full life of a machine, buying outright frequently costs less in total.
6. Flexibility to sell or replace. If your needs change, you can sell, move or replace the machine on your own timeline.
7. Reconditioned machines lower the up-front cost. Reconditioned office equipment can put a capable business-class machine within reach of a smaller budget.
8. Simpler paperwork. A purchase is a single transaction. There are no credit applications, personal guarantees or contract renewals to track.

Not every reason will carry the same weight for every business. A growing office may value flexibility most, while a business watching its long-term costs may care most about total cost of ownership. Total cost of ownership is the full cost of a machine over its working life, including the purchase or lease payments, supplies, service, energy and downtime.

Buying wins on ownership, flexibility and long-term cost; leasing wins on spreading payments and planned upgrades. This table summarizes the main differences.

Neither column is right for everyone. The best choice depends on your cash flow, how long you plan to keep the machine and how much you value control over service and supplies.

Leasing makes sense when predictable monthly payments, bundled service and regular upgrades matter more to your business than ownership. It can be a reasonable choice for high-volume offices that want the newest technology on a fixed cycle.

Some businesses prefer to preserve cash for other priorities and are comfortable paying more over time in exchange for smaller regular payments. Others like the simplicity of a single monthly bill that may include service and some supplies.

• Your business wants to spread equipment costs evenly across the year.
• You expect to upgrade to newer technology at the end of each term.
• Your volume is high and stable, so a bundled service arrangement suits you.
• You are comfortable with the term, page allowances and end-of-lease conditions.

If several of these describe you, a lease may be worth comparing. Just make sure you understand the full contract before signing.

It also helps to be honest about the downsides. A lease commits you to payments for the full term even if your volume drops, your office moves or the business changes direction. If a bundled plan includes a page allowance, quiet months do not usually earn a refund, while busy months can bring extra charges. Ask the leasing company to show you what you would pay in a slow year and a busy year before deciding.

Before signing any lease, check the term length, the end-of-lease buyout, renewal rules, return conditions, early termination costs and what any bundled service actually covers. These details decide whether a lease is good value.

A fair market value buyout lets you purchase the machine at the end of the lease for its assessed value at that time, while a nominal buyout lets you take ownership for a token amount, usually in exchange for higher monthly payments.

• Automatic renewal: some leases renew unless you give written notice within a set window.
• Return requirements: check who pays for packing, shipping and any cleaning or repair before return.
• Early termination: find out what it costs to end the lease early if your needs change.
• Page allowances: bundled service plans may include a set number of pages, with extra charges beyond it.
• Data on returned machines: confirm how the hard drive will be wiped or removed when the machine goes back.

Plan for ownership by sizing the machine correctly, budgeting for supplies and service, and checking the tax treatment with your accountant. A little planning up front protects the value of your purchase.

Start by matching the machine to your real monthly volume. A machine that is too small for your workload wears out faster, which removes much of the cost benefit of buying. Our guide to duty cycle versus recommended monthly volume explains how to size it, and six things to look for when choosing an office machine covers the rest of the checklist.

For busy shared copiers, an extended warranty or service contract can make repair costs predictable. Keep a stock of toner and drums so you are never caught short.

Equipment purchases may be depreciated or deducted under federal tax rules. The IRS Publication 946 explains how depreciation works, but always ask your accountant how the rules apply to your business.

Finally, plan for the end of the machine's life. Many business copiers store scanned and printed images on an internal drive, so wipe or remove it before you sell, donate or recycle the machine. Our guide to security threats a copier poses to your business explains what to do.

Use this checklist to make a clear, documented decision rather than a rushed one.

1. Measure your volume. Record a month of page counts on your current machine.
2. Decide how long you will keep it. Estimate how many years the machine needs to serve you.
3. List must-have features. Note functions, paper sizes, finishing and connectivity.
4. Get a purchase price. Compare new and reconditioned options for the same requirements.
5. Get a full lease quote. Ask for the monthly payment, term, buyout type, renewal and return terms in writing.
6. Compare total cost. Add up every lease payment over the term and compare it with the purchase price plus expected service and supplies.
7. Check with your accountant. Ask how each option affects taxes and cash flow.
8. Decide and document. Record why you chose one route, so the next renewal or upgrade is easier.

CopyFaxes sells new and reconditioned office equipment and has helped businesses buy the right machine since 2002. Browse office copiers, use the machine finder to narrow the options, or request a quote for a larger machine. If you have seen a lower price elsewhere, our price match page explains how it works.