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The How's And Why's Of Buying Or Renting Off-Lease Office Equipment.....
If you've clicked onto this page looking for an inventory list with prices you won't find it here. Instead, the sole purpose of this page is to explain HOW we can acquire used office equipment in like-new condition and WHY the financial mechanics of the leasing industry allows us to purchase and resell it so inexpensively.
The second users, who aquire these nearly new units for 55% less than the best discounted price, when sold as new, walk away with the best of all possible deals!
If you frequently try to sqeeze as much life as possible from your office machines then it must be a little disconcerting to know that there are many companies and institutions that routinely replace their office equipment every three years without any concern as to whether they actually "got their monies worth" out of the last machine(s) that they just returned. These organizations enjoy the luxury of simply passing on "the cost of doing business" to their customers and constituents without having to justify their overhead expenditures to anyone. They are the major banks, insurance companies, major manufacturers, media giants, universities, hospital systems, government institutions, etc. They by-pass the local dealers and contract directly with the equipment manufacturers as "major or national accounts" and take in fleets of equipment on three-year leases. Inevitably, a good 20% of these units are returned after three years hardly used! It's called corporate and institutional waste. Suprisingly, a lot of small businesses that should be concerned about their business overhead are often persuaded by dealer salespeople into taking short-term leases on high-volume equipment that their business use can't justify.
Here's Where It Gets Interesting...
(the financial mechanics of leasing)
While automobiles are amortized over eight years, office equipment is amortized over only five years and the financing works on an accelerated curve. At the end of three years the lessee has paid approx. 76.5% of the "actual value" of the equipment, plus the finance charge and not 3/5ths or 60%, as you may have thought. "Actual value" is defined as the dollar amount that the vendor would have sold the equipment to you, had they not sold it to a leasing company on your behalf at the same price. At the end of the lease, when the equipment is returned, the leasing companies recover the approx. 23.5% of the "residual value" left on the unit from companies like ours.
Here's Where It Gets Even More Interesting!...
(what actually makes this whole thing work!)
Unlike auto leases, office equipment leasing companies don't care how much mileage you put on the equipment. You'll pay the same 76.5% of the actual value of the unit whether you return it with under 20,000 copies on it or over 500,000 copies and leasing companies will recover the same 23.5% of the residual value of the unit, regardless of the meter!
We purchase only the lowest meter lease returns!
You may disagree with our last statement if you are currently involved with a copier lease that comes with so called "free" service and toner but limits you to the number of copies that you can make during the term of the lease. But, that limitation is imposed by the dealer who must provide the "free" service and toner and not by the leasing company!
Let's Spell It Out...
(an example)
An equipment dealership sells a copier at a competitive discounted price of (say) $10,000, not to you but to a financial institution, (a leasing company,) on your behalf. The leasing company then bills you on a monthly basis for thirty-six months. At the end of the three years you have paid $7500-$7800 of the original $10,000 value of that equipment plus the finance charge and then you return it to the leasing company's receiving agent who recovers the residual value of the machine by selling it to us for $2200-$2500.
After a thorough cleaning, adjustment and replacement of certain parts, (refurbishing) we resell the equipment to our customer for 55% less than the best discounted price when new. But here's the great part. This particular copier has a conservative useful life* of 750,000 copies and we sell it with fewer than 100,000 original copies on it. Had this machine originally been placed into service in an environment suited to its abilities, then it should have come off of a three-year lease with between 360,000-450,000 copies on it. However, it-is-not-at-all-unusual for us to acquire these machines with as little as 90,000 original copies or less on them. This means that the machine still has 88% or more of its conservative useful life* remaining when you buy it and you're paying for less than 50% of its original discounted price. Pretty good...hey? In contrast, the original lessee used 12% of the machine's life and paid for 75%-78% of its original value, plus the finance charge.
You get to capitalize on the excesses of large companies!
Don't be put off by our figures. $10,000 was just a convenient number to use. We also sell very low-meter copiers, fax machines and laser printers whose discounted price, when new, is $3000.00 for less than half that price.
*"Conservative useful life" is our definition (as technicians and not salesmen) as to how much copy volume the equipment should be able to comfortably do over a five (5) year period when sold as new.
Sales Recommendations | ||
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We compiled a list of over forty names of customers who have bought off-leased equipment from us over the years. This is only a partial list of referrals because not every one of our customers wants the general public to know that they buy used equipment to save money. Many of these same customers will verify that we've been in business for twenty-three years. | ||
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Performance Guarantees | ||
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It has been our experience that many people are shocked when we tell them that the industry standard parts and service guarantee on new commercial-grade equipment is ninety (90) days, regardless as to whether they pay $2,000 or $20,000 for a machine. If a dealer offers you a longer guarantee than ninety days it's simply because they're willing to go out on a limb in order to make the sale, but the manufacturers only cover the dealers for ninety days. If you are currently involved with a lease agreement that includes "free" service and toner, then the subject of the warranty never came up. If we sell you an off-lease piece of equipment, appropriate for your monthly usage, then we will give you a ninety (90) day parts and service guarantee. If we know that your usage volume will be low for the type of equipment that we sell you, we'll give you a six (6) months parts and service guarantee. After that, we will maintain the equipment on a per-call basis or we will cover you with one of our all inclusive parts and service maintenance agreement. | ||
Financing Is Available |
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There are three types of lease plans. Fair market value, (FMV), 10% buy-out and $1.00 buy-out. Leasing companies will only write three-year, $1.00 buy-outs on used equipment. In affect, it's not really a lease. It's a straight finance. But the most important thing is that you own it at the end of three years. |
If You Are Interested.... |
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If your interested in acquiring low-meter copiers, fax machines or laser printers, then give us a phone call. Please remember that we're technicians and not salesmen, so we won't be pushy. We'll simply discuss your needs with you over the phone and then e-mail you brochures, specification sheets and prices. Then, if you're still interested, we'll meet with you personally and hand you our referral list. If you then want to order a machine, we'll get back to you when one of our lease return companies calls us with a VERY LOW-METER unit. We don't take deposits and your under no obligation to pay for the unit if it is not as represented at the time of delivery. Regardless of the variety of equipment that we're proficient at servicing, we prefer Toshiba, Ricoh and Kyocera-Mita units when we sell copiers, Hewlett Packard (HP) when we sell printers and Canon when we sell fax machines! |