Though there are a few ways to get out a copier lease, most options involve potentially costly legal wrangling with no guarantee of success. A less complicated (and less expensive) way to get out of a copier lease is with a lease buyout.
Top office technology vendors, such as Superior Office Systems (SOS), may be able to help you with a lease buyout. SOS can pay off your existing lease with manufacturer incentives and package that amount into a new lease. By rolling what you still owe on your prior lease into a new lease with SOS, you won’t have to pay a hefty lump sum to get out of the contract with your vendor.
You may have overpaid for your last lease, and with manufacturer incentives to replace a competing equipment brand, it might be possible to reduce your monthly lease costs. SOS might be able to supply you with upgraded equipment at a reduced monthly expenditure.
Here’s another tip: consider the entire cost of the equipment, which includes not only the lease payment but also your service agreement. Today’s copier service costs have come down and you may be able to save overall even if your lease payment remains the same.
Keep reading to learn how it works and if it might be possible for you.
Will a buyout work for you?
If you’re happy with your current copier lease and with the service provided by the vendor, then you’re probably not even thinking about how to get out of your copier lease. But if you over-bought or under-bought or your needs have simply changed, you should explore a buyout. You may also want to consider a buyout if your monthly financial obligations are too high. It’s a good idea to look into a buyout if your business competitors with similar copier needs are paying far less for copier leasing and services.
A buyout makes the most sense if you’re deep into your contract and don’t have the lion’s share of your lease payments to consolidate into a new lease. Near the beginning of a lease, a buyout might not make economic sense.
Other possible solutions to get out of a copier lease
At the start of your mission to get out of a copier lease, you should carefully review your lease terms. Check to see what termination penalties and cancellation clauses would apply if you wanted to end your contract early.
You should inspect your contract for performance clauses to see if the leasing company failed to comply with lease requirements. Maybe your copier didn’t meet advertised operational standards. More often, though, performance standards relate to your copier service agreement and not your lease payments to the lender. In that case, you might just need a new service provider.
You can try calling the copier company or lending institution to see if you can renegotiate the lease, but this option seldom yields favorable results and is usually not a viable way to get out of your copier lease.
Check for an assumption clause, which will allow another company to assume the remaining terms of your lease. If there’s no assumption clause, you can investigate subleasing the copier to someone else. If you’re located in a building along with several other businesses, you can look into sharing the copier use and costs with another entity.
You can pay off the lease early, probably without penalty, and maybe even achieve a savings, but if you chose leasing in the first place to prevent a large capital outlay, this option would not work for you.
How to prevent problems with your next lease
If you decide to take advantage of a buyout, you’ll want to avoid similar problems with the new lease. Even though you now know how to get out a copier lease, it may not be possible to get a buyout next time.
You’ll want to avoid any lease clauses that put you at a financial disadvantage. Here’s some clauses that should trigger an alarm:
Lease escalation clauses and payment adjustments. These clauses raise an immediate red flag. Some lenders charge escalation fees, allowing them to increase payments by a substantial percentage each year. A payment adjustment proviso enables financiers to enact payment add-ons as the result miscalculations. If you have the unfortunate experience of signing a contract embedded with these clauses, your payments are probably too high and it’s understandable that you want to get out of a copier lease.
Automatic renewal clause. An automatic renewal clause equates to automatic trouble. Many lease signers don’t realize that when a lease expiration date approaches, they’re required to contact their finance company about their intention to return the equipment. Failing to meet the notification deadline can result in automatic renewal; obligating the lessee to another year of payments. Being forced to keep a costly unwanted copier and service plan for an added 12-months will make you think twice about getting out of that copier lease.
Insurance surcharge. If your lease includes an insurance surcharge, your will pay an additional fee to fund repairs/replacement of damaged equipment. You can avoid a surcharge by proving your company’s insurance policy covers leased copier equipment on your premises.
$1 purchase option. Lenders sometimes will allow you to purchase the equipment at the lease’s end for $1. Though this offer sounds attractive, it substantially increases monthly payments.
Now that you’ve gotten a glimpse at how to get out of a copier lease, check out our free guide for more info about getting the best deal on a copier lease: Newbies Guide to Leasing an Office Copier.