…Beware – It may not be as good as it first seems!
A lot of businesses often find themselves tied into service contracts and lease agreements without being fully aware of the true commitment and ongoing running costs.
Photocopiers are most commonly leased over a 5-year period. The lease is usually handed onto a leasing company whilst the service contract is kept with the Photocopier Company to service and maintain your machine during this period.
Once the lease has been agreed you are committed to stay with the leasing company for the agreed term or to pay any outstanding fees plus a settlement amount should you wish to end the lease early.
We are finding more and more often that Photocopier salespeople are trying to upgrade customer’s machines early in order to generate extra profit and commission for themselves.
As machines get older they can cost the supplier more to maintain as parts begin to wear out. The supplier may then increase the copy cost to cover the additional expenses incurred. However, many Photocopier companies use this as a way of massively increasing the monthly copy costs over time.
Then the salesperson tells you how they can help you make huge savings every month if you upgrade!!!!!
You are contacted well before the end of your lease to upgrade – this can sometimes be two or even three years early! Copy cost increases and difficulty in obtaining replacement parts are the more common reasons given when suggesting an early upgrade.
You may still have a lot of outstanding instalments to pay on the existing lease so are unlikely to want to pay any penalties or try to look elsewhere now. If you upgrade the old machine where do those outstanding instalments go? They are bundled up into the new lease, where the machine you would have paid for in 5 years now stretches towards 10 years!
With the extra commission and interest your old machine can end up costing you a large amount. Because it is paid over 10 years, involves a new machine and is paid monthly it’s not always obvious just how much more that old one will end up costing.
Sometimes the kind salesperson will offer to let you keep the old machine in the deal – how generous!!! They probably don’t really want your old machine back and you are paying it off several times over so the offer is not as generous as it may sound.
Sometimes you may wish to upgrade and have a new machine before your existing lease ends. You can incorporate any outstanding instalments into a new lease to spread the expense and make monthly payments cost affordable. BUT YOU SHOULD DO IT FOR THE RIGHT REASONS AND KNOW THE IMPLICATIONS!
Sarah Bellhouse is Director of Office Machines Specialists Nico Office Ltd.