Equipment Selection for Leasing Should be Undertaken Methodically
You should begin the process of equipment selection by making a list of your needed features. I highly recommend breaking your list down into needs and wants. Equipment selection is a simple process if you are highly familiar with the technology that is involved. For instance, suppose you need to lease a new copier. It’s likely you’ve used many of these things before. Perhaps you even know which ones you like. In any case, you probably know what features you need on the one you get. That will make the job of creating your list easier. Now, make a list of all of the features you must have (need) on the left. Make a list of the features you would like to have (want), but aren’t essential, on the right. At this point, you should have a pretty complete listing of features.
Get a General Idea of Pricing by searching the internet
This is exactly what I tried to steer my copier customers away from; “shopping the internet for copiers”. Realize, I am not suggesting you get your copier off the internet. On the contrary, that can sometimes be a bad idea. Internet shopping is good in so many ways. On the other hand, service does not come from internet based companies. You will likely want (I recommend) a local service contract, so I suggest you use the internet as a tool and not your final destination. Consider the features (options) that are standard on the equipment you price and add the cost of options as that pricing is available. You’ll see that copier options are not cheap. They will also vary from brand to brand and store to store, as you would expect. You shouldn’t assume the equipment priced out is always brand new. Do your homework.
Once You’ve Established a Purchase Price Range You Estimate Lease Payments
So now, you’ve got prices together. You should have a range of prices starting with the most minimum equipment you are willing to accept. You should have all of the low end equipment with your minimum acceptable features. I hope you have taken into account your anticipated usage levels. I also hope you have peeked into the future and anticipated growth or expected changes in your use. This will be important for as far into the future as you expect to lease (have) the equipment. You don’t want to be shopping for unrealistically unsuitable gear for your needs. You should have all the bells and whistles you could hope for at your top level, highest priced offerings. Use this rate table to calculate a range of lease payments, based on equipment cost and term of the lease. You should have several choices, when all the payments are calculated.
Figure Out Your Affordable Payment with a Realistic lease term
You should now have lease payments on several configurations of equipment. You should also have a grid showing the lease term for each payment. I recommend you don’t pick 60 month lease terms solely based on lower payments. Its true that the payment will be lower, given a longer term. However, you should be realistic about the time you are willing to have your chosen copier. I highly recommend reading this post I wrote on shorter lease terms. I have owned that copier company and blog since 2000, as well as this one. I have spent most of my career explaining that shorter lease terms can reduce the pain of old equipment (pictured there) later. You have to balance the term with the payment to arrive at a happy medium. Go up and down the grid you’ve created and pick out all the affordable and most appealing payment term combinations.
Choose the Equipment Selection That Best Suits Your Needs and Payment Desires
Once you’ve spotted the payment and picked out a term, you have whittled down your alternatives considerably. You should highlight the choices that you like the most. You’ve also got a payment you can afford (hopefully), features that meet your needs (hopefully) and maybe some goodies you like. Wouldn’t that be nice? More importantly, you have calculated the payment using the rate table. That means, you’ve used realistic rates. If you’ve also found realistic prices online, you’ve been able to calculate realistic lease rates. Now that wasn’t complicated was it. You now know more than 90% of leasing customers at this point. Most have no idea how to calculate the rate. That’s because they don’t have the rate table. You have gained a serious competitive advantage because you’ve done your homework.
The Real Test is Getting The Locally Available Equipment Lease
The next step is to call potential local vendors. A referral from a friend can be good, if you have one. If not, go to Google and select three or four local copier dealers. Tell them exactly what you want, if you are confident. Have them provide you with option choices, just as you had when you shopped online. Make sure the competing dealer sales reps provide their best cash prices, as well as leasing for the terms you decided on. Refer back to the above paragraphs if it helps. Realize that you have negotiating tools. You can use the rates I furnished you in the rate table. Unless you have poor credit, which I am sure you don’t, these rates are realistic. Those are rates I get for my customers and I’m sure your reps should be close. You will be able to tell if they are playing games with the purchase price if their calculations don’t yield a similar payment to your calculation, based on their cash price and the rate table.
There are other considerations, such as service contract pricing, usage allowance and others. This article focuses on helping you shop realistically for a lease. I did not go into depth on the service consideration. I will discuss that in another post article. However, I am confident you are much, much further ahead having read this article. I hope you go through these procedures when making your equipment selection.
Key Points of Equipment Selection for Leasing:
- Have realistic purchase prices based on your needs and wants
- Know the rate factors for the lease terms you are considering
- Compare local dealers competitive prices and lease rates
- Make sure you are getting fair lease rates, not just fair prices
- Select the local dealer based on the best blend of term, features and lease payment