Here from a Church in Florida-
Leased Copier-The Final Punishment
By Kevin McCord
"...When renewal time came around last year I was interested in working with them again, but found their prices far too high. I was in a position to buy a machine outright. When they got wind of that, they pulled out the lease agreement. We were a few weeks beyond the 90 day notice for non-renewal. The lease agreement locked us in for 12 more months with a machine we didn't want to use. They were not interested in our future business enough to let us give written notice a few weeks late even though we had spent those weeks in negotiations with them..."
Here from a school I think near San Francisco -
Copier leases: A few experiences and thoughts
By Greg Beuthin
"...We had two major beefs with our current copier lease company:
- Response time was supposed to be 4-6 hours, but we had increasing delays, up to 8 hours in some cases. And often what would happen is an agent would arrive, and 15 minutes later declare “Parts are on order, I’ll be back in X days.”
- We had an per-machine copy quota system. On the simple b/w copier, our lease included 18k copies a year, on the large multi-use one, 380k However, because of location, the b/w copier was used far more than the other copier, and we got hit with massive overage charges - even though we were twice as much under quota for copies on the large machine..."
"...It’s stories like this that are helpful to people when they are reviewing their final lease copy agreement. We got screwed by Canon similarly, but only for 3 months (our lease said we had to provide 90 days notice, so we had to pay for 3 extra months). Of course, had I not waited until the last week to finalize a contract with another company, I would have been better off..."
Here a bad experience -
Shame on you Toshiba Business Solutions
"...In order not to “auto renew” most copier leases have a very strict code of how, when and where to send your formal cancellation notice. And if you don’t abide you have just bought yourself another 2 years with an outdated copier, congratulations.It’s the equivalent of a current boyfriend or girlfriend denying your right to break up with them because you didn’t do so at the right time or place... "
In this post from a church -
I hate Ikon Office Solutions
"...After 3 years of leasing a copy machine from this company our contract is out at the end of the month. That is a good thing...since we own a machine now we don't need to lease one. The contract is out, we have to pay the remainder of the lease...which is right and fine. What is wrong is that they charge us to come pick it up!!! I lease a machine from them (Ikon)...which means it is theirs and DOES NOT belong to me (newpoint)...their words in their contract. So they send me to a company that will come pick it up...for $375!!!!! ..."
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Anecdotal, I know. But still - the story is repeated over and over.
Leasing is a difficult issue to understand and it should be simple. It should be easy to understand and easy to explain and Leasing should be explained and all the ramifications transparent.
I think the necessity of "contracts" does not over ride the
Lesson #1 don’t ever include your maintenance contract with your lease. This is a sneaky tactic used by copier companies to lock you in and there is not much that can do to get out of it. I have been a Copier Salesmen for 14 years and have seen so many people get trapped by adding maintenance to their leases. So when you lease a copier ask if the Maintenance Contract can be billed separately
ReplyDeleteWhen buying a copier don’t buy from the big guys buy local from an independent dealer. Independent Copier Dealers typical don’t use sneaky tactics and are more willing to work with you when it comes to leases and maintenance contracts
Chuck The Copier Guy @ www.marylandcopiercompany.com
Good Advice.
ReplyDeleteI have sold both - sometimes, a combined agreement makes sense, usually for larger implementations.
The main issue here is "transparency" and education. Yes, the customer needs to beware, yet the Selling Professional will gladly point out ALL the issues associated with his/her agreement.
Larger providers(IKON, etc.) bring much to the table but when it comes to leasing and financing, big companies are inherently inflexible compared to the local, smaller guys. Nature of the Beast.
I am not sure if most or if any "local" guys have their own leasing company. If not, the "flexibility" ends at the lease.
Even small companies can use GE Capital(IKON, etc.) or any other, smaller finance companies.
Once a prospect signs the lease agreement, they are now a customer of both the provider and the Leasing Company.
Good Post - I may need to expand on the subject.
Great America Leasing is the best leasing company because they do not play these silly games at lease end. Their rates are the highest in the industry because they are not counting on these end of lease games to make a profit. Also their service is awesome, alway get a live person when you or your clients call them.
ReplyDeleteTom, thank you so much for commenting.
ReplyDeleteI remember American Leasing being good and I shall get in touch with them.
Great compilation of stories! We hear the same stories a lot as well. Two helpful hints for avoiding some of the frustration mentioned in the post:
ReplyDeleteFirst, it has been our experience that most organizations do not have any sort of process in place to actively manage and monitor key indicators for their device leases. Adding a "Letter of Intent to Cancel Date" to the notes or a tracking field in contract administration software can help alleviate this frustration.
Second, making any costs associated with the return of the device at the end of the lease the responsibility of the vendor can actually be written into the RFP/RFQ. Tricky thing about that is any contract you sign with the vendor will pretty much nullify that point. The work-around is to not sign the vendor's contract but create your own contract and have the vendor sign them.
Hopefully these suggestions can help someone out.
Ethan Davis
Optimizon
Ethan,
ReplyDeleteThank you for your good advice and input.
This subject is one of great interest with Prospects and customers.
I am involved with a RFP for a city. They have written their own agreement and the RFP includes the awarded vendor covering the "buyout" and the return charges...interesting.
Very interesting, because the implementation is staged and the buyout figures will change/decrease as the new units are rolled, but the RFP is using today's figures.
Have a Toshiba copier that never did work great. My compny closing it's doors so I want to give it back. I get a harrasment phone call from Toshiba finance saying they will pursue me personally if all of the next three years of payments are not made and no way will they release the lease. What a bad way to do business. Please take heed and stay away from Toshiba Copiers.
ReplyDeleteRRR
Anon -
ReplyDeleteSorry to hear about your situation.
I originally posted this comment a year ago, almost to the day - this post gets more views than almost any other on this blog.
Which is very telling.
Since then, I have established a working relationship with Great America; rates are higher but their focus on detail and flexibility have no equal.
Good luck.
When I sold copiers I always told the customer "The leasing company paperwork may say Ricoh but they are a third party company and I'll help you as much as I can. You have to remember that ALL leasing companies write their leases in ways designed to seperate you from more money then you planned"
ReplyDeleteI won alot of business because I was honest. I set up a "tickler" 100 days out and I'd call the customer, even if I had been trying to upgrade them. Often I'd get the business then. I even created sample letters for my customers to use and I'd just be straight and tell them "Whether you buy from me again or not, I'm not letting the leasing company get the drop on you.
My finest compliment I ever got was a customer who called and said "Jesus Bob the Leasing Company really hates you". I chuckled and said "I know"
Bob -
ReplyDeleteYup.
Work WITH the client not against.
How did you feel about adding "points" to the lease as "commission enhancement"?
I have over 14 years experience within the equipment finance industry with the largest leasing companies. My role was refining lease documents and setting the residuals for FMV leases. Here is the real scoop to onerous language. Many vendors/dealers require certain provisions from the leasing companies to give them their business. Such as:
ReplyDelete* Points
* Return provisions
* first right on equipment returns
* agressive rates (Requires higher residuals)
* Return notification restrictions (Allow vendor beter conrtrol of lesee)
Now the equipment typically has a liquidation value of say 5% at the end of the lease and the booked residual is 18% after 36 months the leasing company relies on renewal payments and in-place sales to acieve the residual. This is typically an average over the entier portfolio not lease by lease basis. If the vendor restricts the ability to achieve the booked residual by requiring any of the above then the leasing company will have to tighten the screws. You can negotiate the terms of the lease contract, but expect a higher rate. If you want the best of both worlds then make sure you read the contract and note the terms for terminating the end of lease and set reminders. Some times the vendor will do this for you. Also if you upgrade with your current vendor they have some advantages over new vendors, such as discounts. If a new vendor states they will take care of the return of the equipment and give you the money for the final payments be wary. This can cause you great headaches.
Anon -
ReplyDeleteGreat advice, excellent insight.
Thanks for reading and commenting.
Keep coming back.
The leasing companies aren't evil. People sign these by choice. They are LEASES not rentals. If they want the flexibility of cancellations, etc. they should get a RENTAL contract.
ReplyDeleteI have read all of the replies with great interest, thanks everyone.
ReplyDeleteMost people are not contract lawyers and understandably don’t speak to one before leasing an office copier.
Here in the UK we have serious problems with some copier lease agreements and the wealthy unethical suppliers selling them.
Already mentioned in this blog are the “automatic” run on for up to a year unless you cancel on the precise day! There is an epidemic of this annoying practice.
We also have problems with some service agreements that commit a customer to 5 years of service when his lease is only for 3 years! This is a blatant money grabbing device to get you tied in to the supplier for longer than you wanted. If you want to move away, you have to pay all of the future service bills, many thousands of pounds. Of course the plan is that you reluctantly decide to renew with them instead!
Some leases wrap all service into a 5 year deal but in you become unhappy, you are well and truly stuck!
The worst ones are the rolling or never ending contracts, aaaahhhhh; we know of people who have lost their jobs over this one!
We are a group of highly ethical copier industry consultants who have devised a completely fresh way.
No lease! No automatic renewals. No nasty contract clauses! No worries; and we guarantee to save our clients a fortune as well.
How do we do it?
If you get a chance, take a look at our site for some tips www.oliverdi.co.uk
Great blog keep it up!
Thank you.
Surgeon -
ReplyDeleteThank you very much for reading my blog.
And thank you for your comment - succinct and interesting view from across the pond.
Keep coming back!
Every one of these complaints have one thing in common. The lease signer obviously didn't read what they were signing. For goodness sakes, you are signing for hundreds of dollars a month for the next 3 to 5+ years and you don't take a few minutes to read what you are signing???!!!! Wow....Just Wow!!!! Its hard to have sympathy when someone obviously didn't read even the first paragraph of the lease document.
ReplyDeleteI have been in this business for over 20 years and I see these things all the time. The biggest tip I can give anyone on purchasing or leasing office equipment is to limit your search to only locally owned independant authorized dealers that are active in your local community. Then get references.
The other thing you will find in common with these horror stories is that they mostly involve the giant corporations and the direct branches for the manufacturers. Again, do not use these companies. They don't care about you. These companies have a revolving door of hiring sales reps and whoever you signed the lease with will likely be long gone by the time that lease rolls 3 to 5 years later.
Only an independant authorized dealer will care enough to do the right thing by your business when it comes to the end of your lease. Even a few of those will take you for a ride so be sure to get references and do your homework.