Photocopier lease agreement problem

Posted by: Rasher on 06 October 2004

My office photocopier is busted. I have it on a non-maintenance agreement, and the bill would be £350 to fix - but there are only 5 quarterly payments to make before I can get shot of it, or it has to go back anyway. If I pay to fix it, I pay maybe two quarter payments at the end to buy it outright – but it is then a 5 year old machine that would cost me £770 incl. the repair & future payments. A new modern Canon I can buy on-line now at £629 outright (How prices have dropped!!!). To terminate the lease agreement early would mean I have to pay all future payments less 3% - £407 – just to give it back! With my existing photocopier supplier, to change the machine to a new one on lease for another 5 year term is £84 per quarter – or they will sell me the new Canon for £1200, and swallow the early end of the agreement themselves.
Either way I’m shafted.
Lesson: Never do photocopiers on lease agreements – just buy them outright. If I had bought my existing machine I could have afforded to throw it away now anyway. It will cost me £407 to dispose of my busted machine.
Options:
Buy the new & hand back the old = £629 + £407 = £1036
Buy the new and just let the old one run out= £629 + £420 = £1049
Buy the new one from the existing supplier = £1200
Keep, fix & buy the old machine (5 year old) = £770
Lease the new for next 5 years = £1680
Drop the existing out of the window and claim on insurance – only to give it to those bastards in a years time = Not going to happen.

Any clever ideas how to get out of this one?
Posted on: 06 October 2004 by Mekon
Is there any permutation that will cost you less that £407 to get away from the machine? Would you even get the £350 repair cost back if you sold it on ebay?

I would look into the clauses about what condition it has to be returned in. If there's nothing, think of it as a £407 charge to drop a photocopier off of the tallest building you can find. Collect up the debris, and pay them the £407 to be free it.

FWIW, we were leasing from Ricoh, we now lease from Canon.
Posted on: 06 October 2004 by Rasher
To hand the machine back costs me whatever is outstanding on the rest of the lease agreement, and there is no way around that. It is just an expensive lesson. The machine has to be given back in working order, but fi I buy a machine from the existing company, they can overlook that fact.
Alex - If I fixed the copier and paid to buy it, I would be outlaying £770 - more than the cost of a new Canon with warranty. Who in their right minds are going to pay for my 5 year old machine anything like that amount? I would need to sell it at more than £365 to break even, accepting the £407 loss. Not worth the effort or risk.

I have almost decided to swallow the £407 & buy the new machine. I will just vow to never enter an agreement with a lease company ever again.
Posted on: 06 October 2004 by Brian OReilly
Might be worth asking the repair co (or another repair co) if they are interested in buying it in its broken state. Even if they only offer GBP200, it could be your cheapest exit.

A GBP350 repair for you might miraculously become a GBP50 repair for them.

Brian OReilly
Posted on: 06 October 2004 by Rasher
But without paying the settlement of £407 + 2 further quaterly payments, it isn't mine to sell in the first place.
Posted on: 06 October 2004 by NB
Rasher,

Just buy a new one and let the old one run out. Its the easiest thing to do. There's no point in wasting valuable earning time on such matters.

The lease on the old machine is tax deductable so it won't cost as much as you think.

Buy a new one from someone like PC world and take a five year maintenance policy on it. Then you will have five years of worry free photocopying.

Write it off as a bad experience and move on.



Regards


NB
Posted on: 06 October 2004 by Rasher
Yup....I agree
Posted on: 06 October 2004 by Mike Hughes
Sadly, not an isolated experience. My partner works in law in an environment where many of her clients sign up for such deals and worse all the time. She calculates that if she ever wanted a unique career niche this would be the one she would choose!!!

Mike