If you need new office equipment, you have to decide if buying a new copier outright will fit into your budget. For most businesses, they would rather lease because it reduces the amount of capital that they need to tie up in a new copier. In addition, it also comes with tax benefits to lease.
When it comes to a lease, there are two kinds: Fair market value and $1 buyout leases.
With a fair market value lease, you will receive lower monthly payments, and you will have access to better tax benefits. After the lease term has ended, you can decide if you would rather buy the equipment based on the leasing company’s established fair market value or if you will send it back to the leasing company. A fair market value lease often lasts between 12 to 48 months, but you can choose a 60-month term to lower your monthly payments.
The biggest advantage of the $1 buyout lease is that you can purchase your copier for $1 at the end of the lease. You might be asking, why anyone would choose the fair market value lease? The monthly payments will typically be higher with the $1 buyout lease, and you need to look at the copier lifespan with a $1 buyout lease to make sure it continues to function well after the lease ends. If you would rather upgrade to newer technology after the lease ends, the fair market value lease makes more sense, but if you plan to keep the copier after the lease ends, then the $1 buyout lease will be a better choice for your business.