Think Leasing Office Equipment is a Good Idea?

If you don’t have the capital to invest in office equipment, you might be tempted to lease office equipment. 

 Though in some situations that might be advantageous, there are definite drawbacks.  Before you sign the lease agreement for office equipment, read below about some of the negatives of leasing office equipment. 

It’s never yours
Just like a leased car, leased office equipment is never yours.  No matter how many payments you make over time (and it can be a lot), you’ll still never own the piece of equipment.  And if you calculate the amount of payments you make over the years, you will probably spend close to what the piece of equipment is worth.  For instance, if you take out a lease on a copier machine, your monthly payments might be $50 per month over a five-year period.  That adds up to $3,000 ($50 x 12 x 5), practically the cost of a new copier machine.  And after the five years are up and you’ve paid a whopping $3,000, you’ll have to return the piece of equipment. 

There are still repair bills
If you think you won’t have to pay for any repair bills, think again!  Though most lease contracts include free service calls (which can be a big savings), you’ll still more than likely need to pay for parts.  Replacing parts can be quite expensive.  Let’s say that the office’s big screen TV breaks down.  You’ll probably end up spending a few hundred dollars replacing a typical part. 

Moving your office out of the area
If your office moves out of the service area, you might be in trouble.  Let’s say that you set up your office in one location and lease all of your equipment from the local distributor.  The contract reads that the equipment can be serviced and periodically maintained if you remain within the geographic service area.  But what happens if during the lease period you need to move outside that service area?  Either you’ll have to pay for a private service provider (most companies will cancel any warranties if an outside vendor makes repairs or you’ll have to terminate the lease agreement early, in which case you might need to pay an early return penalty.