Know the difference in a FMV and $1 Buy Out Copier Lease.
FMV – Fair Market Value. This copier lease allows you to make monthly payments for the duration of the loan. After the duration you will then have the option to buy the copier at Fair Market Value. The Fair Market Value is determined after the duration and is affected by the trends of the economy. In years pasts Fair Market Value percentages ranged 30% of what the copier was worth when you first got it.
For Example, if your copier is worth $7000 when you first went into the lease and your payments are $165 a month for 60 months at the end of the duration you have the option to purchase your copier for $2100. Making your true investment $12,000.
Keep in mind that 60-90 prior to the end of the duration you need to inform the leasing company, with a certified letter, your intentions of keeping the copier or giving it back. If you fail to do so, then they will automatically renew your copier lease contract for 1 year. Making you invest more money.
$1 B/O – Dollar Buy Out. This copier lease allows you to make monthly payments for the duration of the loan. After the duration you will then have the option to buy the copier for $1. This option appears as a higher monthly payment but overall is more cost effective over time than Fair Market Value.
For Example, if your copier is worth $7000 when you first went into the lease and your payments are $180 a month for 60 months at the end of the duration you have the option to purchase your copier for $1. Making your true investment $10,801.
Don’t be duped by the lower price upfront. As a business your intentions are to be operational for years to come. Understanding costs over a period of time can save you money. Just because something is lower price upfront doesn’t mean that it will financially help your business over time.
Contact C Three Business Consultants to help you find your cost-effective copier and copier lease agreement.