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What Is A Buyout In A Copier Lease?

You rented a copier a couple years back, and it was ideal for your day-to-day business needs. Your business has expanded, necessitating the acquisition of new technologies. Alternatively, the service provider could have been acquired by a bigger corporation, and you are no longer receiving the timely service you need.

One thing is certain in all scenarios: you have a legally binding contract that no longer serves your business needs.

An early buyout of a copier contract is also known as a lease buyout. It’s the ability to buy a rented copier or printer at any time during the contract term. There is a start and end date of a leasing arrangement. 

A buyout is expected if you leave the lease before the end date. The buyout balance is determined by the lease agent based on the outstanding fees and the residual value of the equipment. 

The lease buyout must be obtained from the leasing firm in charge of the loan, and it is normally submitted to the seller. Before the information is passed over from the lessor, the seller has a certain amount of days to alert the lessee of the particulars of the buyout.

You’ve definitely used the word “buyout” if you’ve ever been interested in a copier leasing deal. Maybe you’re a sports enthusiast who has heard of clubs buying out player contracts.

Regardless of your experience with the concept, knowing how a buyout operates and the rights open to you when one is in effect is critical to having a copier deal that prevents unexpected costs and fines.

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How Does a Lease Buyout for a Copier Work? 

There are different types of a buyout. Vendor upgrade to hold, vendor upgrade to return, customer buyout, and vendor buyout are the most popular forms of buyouts offered by leasing firms.

Customer Buyout

  • A customer buyout is needed if a customer/lessee demands a buyout and is switching vendors. 
  • The lessee is responsible for lease fees to the provider under this alternative, and the benefit for sticking with the same leasing firm has been removed because the lessor agreement has ended. 
  • In addition, after the buyout offer is made, the lessee will own all of the equipment.

Vendor Upgrade to Hold

  • The lending firm is paying the seller an incentive based on the financing of the next contract that the customer/lessee signs with them. 
  • This buyout also helps the dealer to keep control of the equipment and eliminates the need to return it to the rental firm.

Vendor Upgrade to Return

  • On paper, an upgrade to return buyout is normally the cheapest choice. 
  • In the same way as the buyout to hold is passed along to the vendor, the rental firm is handling an incentive figure that is dependent on the funding of the next contract that the customer/lessee enters into being owned by them. 
  • The return option, unlike the update to hold, allows the seller or the buyer to send the equipment back to the leasing firm. Because of the delivery costs, the price discrepancies between the leasing companies’ incentivized choices are seldom significant.

Vendor Buyout

  • In a seller buyout, the vendor will purchase the contract from the leasing agent and will not obtain another lease for the customer/lessee from them. 
  • After payment, ownership is transferred to the seller, and no delivery or servicing expenses are needed because the lease conditions have been met and the vendor-customer arrangement is still unchanged in terms of maintenance.

When working with a prospect who already has a lease with a rival, a provider can use a system known as stream of payments

The stream of payments is a deposit made to the lessee to cover the remainder of their current lease payments. 

When pursued, a stream of payments transfers the customer’s net charge to the leasing firm (contract) and provider (service) for the remainder of the lease term, and then a check is cut to the client for the total amount.

Where a company is dissatisfied with their existing service provider, contracts, or facilities, a copier lease buyout is always the only viable alternative. 

The benefit of a buyout is that, while it can seem to be a difficult or time-consuming process, it is really very straightforward. Your new service provider will guide you through the transition and be there for you every step of the way.

Are You Looking for A Business Photocopier Near Concord, California?  

Office Machine Specialists has been servicing and selling office equipment since 1995. A family-run business that has dedicated our efforts to providing the best equipment options and after-sales service to our clients. Our goal is to ask the right questions and guide our customers to make smart decisions about new machine leases and purchases.  We were servicing copiers long before the internet was a viable resource, and have transitioned to the digital workflow environment of color printing, scanning, account control, and fleet management. With over 20 years in the industry, we have extensive experience with many brands and consider OMS to be a valuable resource to any organization. Contact us for all of your copier needs here!