A lot of my time is spent dealing with end-of-lease questions.
Existing customers sometimes choose to go a different direction and need to terminate a lease with us. We also acquire new customers and help them end their current contract.
Based on my experience, I have changed the end of lease terms on our contracts to be more customer friendly.
We want people to do business with us because it is a good fit . . . not because they're forced to because of a lease contract. We also want to leave the door open to any customer who decides to move away from us.
People lease copiers and other products to give themselves the flexibility to make changes. Before you sign a lease, you should make sure the contract you're signing will help you accomplish that – even if flexibility means the change is to a different vendor.
With that in mind, below are 3 things to be careful of when leasing office equipment.
1. Beware of long renewal cycles.
Most leases have an “evergreen clause” that states if a letter of intent is not filed during a specific period the lease will renew for an additional 12 month period.
The best language for the customer is month-to-month renewals. Once the contract is satisfied return instructions will be issued. Once the return instructions are issued and equipment is shipped back the lease will stop. Not until then.
2. Make sure your lease will allow for early return.
Not early return without payment, that is unrealistic, but if you want to buy out your contract you should be allowed to return the equipment.
It is a very common practice to not allow for early return. This means if you are 48 months into a 60 month contract and you pay off the balance the machine has to be stored until the actual contract end date. Usually this works out fine, but there is risk. The product is out of site and out of mind and you, the customer, are relying on your vendor to manage that return which they can’t perform unless you, the customer, provide the return instructions which can only be provided to you. Sound confusing? It can be and it has resulted in renewals, late fees, and charges that aren’t necessary.
3. Make sure that the return location is specified.
Most leases do not specify a return area and it is obviously more expensive to send equipment to other states or even countries at the end of term.
One you receive the return instructions where will the equipment need to be shipped? According to the contract it can go anywhere. It is a good idea to specify a region at the very least to minimize cost.
You lease your equipment in order to have the opportunity to be flexible with technology in the future. Don’t sign a contract that puts you in the complete opposite position.
Please contact me directly – firstname.lastname@example.org – if you have questions about a lease whether it be a current contract or one you are considering signing.