If you're the office manager of a business, you're familiar with how your business could become unsatisfied with its current copier/printer leasing provider.
If you find yourself on the other end of a copier lease that no longer suits the needs of your business, you may be faced with a daunting task! Coming to a point with your commercial copier lease where you may start looking for guidance on how to buy out your copier lease with as little headache as possible.
When to Reconsider Your Copier Leasing Company
A copier lease may make sense if you don't have extra funds around to spring for a brand-new copier. But there are also times when you need to buy out leases. You may also look to lease one for any short-term projects or jobs that require high-volume support. Whatever the need, there are some common reasons for breaking a lease and, if you find yourself in that position, how to handle it legally and properly. In a lot of cases, you can legally break a copier lease and still keep any financial penalties at a minimum.
Remember that because a copier lease will not be easy to break, it is necessary to read your terms and conditions before signing. Any binding contract will be hard to wiggle out of but if you're set on buying out, here are some options:
- You can cancel your automatic renewal that can keep you locked into the lease until you choose to opt out;
- You can pay off the full balance to rid of the cost altogether, but you may want to learn about any penalties for early pay outs; and,
- Consider refinancing the balance left on your lease - only recommended for newer or higher volume copiers.
Paying for a service agreement separate from your copier might be a better financial move since a lessor may be required for you to keep the lease. Copier leasing companies are interested in one thing, and that is to "guarantee" your money for their services. One good way to see that this is the case is to check for a signed "personal guarantee" in your agreement. If you signed one, simply canceling your lease may not happen. A personal guarantee is what binds you to the lease terms, and if your company defaults or goes bankrupt, your personal and business credit will be impacted. Walking away from a lease agreement if no guarantee was signed and, as with any signed debt, should be the ultimate and last resort.
There are always ways to get what you need, though. Negotiating with your leasing company, since most are always looking to improve rapport with clients, can lead them to offer you a brand new deal. If they seem only to offer one brand or series made by the same company, beware! This usually means that there are numbers that need to be hit, which may not be the most cost effective solution for you.
Also, be sure to go over every condition of your lease for obligations and penalties, clauses or legal terms for the state you live and work out of. Make sure to look for "performance standard" clauses as these allow you to break the lease if the company fails to uphold its end of the agreement. Sometimes, a common clause to cite as means of breaking a lease is if the copier doesn't perform the functions that were advertised.
Any number of these reasons can encourage you to buy out leases, but because copier leases are legally binding, there is an increase in lease defaults, and never without consequences. See if a service agreement is in place, as a lot of agreements are broken because of poor service. Check also for any "lease assumption" clauses which, in essence, allows you to find another guarantor to assume the lease. If the leasing company allows this, and if the party has great credit history, a transfer may be your best option.