The question to buy or lease comes up in many different ways. Most people think that buying or leasing is a decision you need to make when you want a new car. That is true, but there are other places where the option to buy or lease has to be considered. The copy machines in the office can be purchased outright or they can be leased.
The decision to buy or lease an office copy machine should be made in the same way that any other buying and leasing decision is made. It is important for a business to look at the advantages and disadvantages of both buying and leasing the copier or copiers they need. Once they have done this, they can make the decision that fits the business best.
Advantages and Disadvantages of Leasing
New Machines – If you are leasing the machine, you can easily switch to a new machine or get the latest model without having to sell your old machine. You can just start your lease over for your new machine. This allows businesses to have copiers that are able to work efficiently and with fewer problems. The disadvantage of having new machines is the learning curve for everyone that uses it. It takes time and effort to learn the features of a new machine and how they can benefit the business.
Lower costs – The amount that is paid to lease a copier is lower than the cost of buying a copier. The monthly payments for the machine will end up paying the entire cost of a machine by the time the lease is done. The downside is those monthly payments will never end with a lease.
Tax benefits – The amount that is paid for the lease can be written off as a tax deductible expense. The business cannot take the depreciation of a machine as a tax write-off.
Maintenance – Most leases include maintenance in their monthly costs. It is nice to know that these costs can be predicted, but the business may not be able to choose who does the maintenance.
Advantages and Disadvantages of Buying
Equity – When you buy a machine, you have equity in the business. That equity can be used to help a business borrow money for something else or it can be used in other ways to help the value of the business. The problem is that the value of the machine diminishes over time and so does the amount of equity a business has.
Lower costs – The initial costs to buy a machine may be higher when you buy instead of lease, but over time the costs of buying a machine are lower as long as the machine is used for a longer period of time.
Maintenance – The owner of a copy machine can choose who and when they do the maintenance. The downside of this is they have to pay for it.
Tax benefits – The cost of the machine can be depreciated over a period of time to provide the business with a tax benefit.
The listing of the disadvantages and advantages of buying or leasing will not provide an exact answer. It often seems like buying and leasing offer similar advantages and disadvantages. They just do it in different ways. In the end, it will depend on the business and their needs to figure out which is best.