What Happens at the End of a Copier Lease: Return, Renew or Upgrade

Start With the End of Term Clause

Your lease agreement spells out what happens when the term runs out. Find the section that covers the end of the lease. It may be called “end of term,” “return conditions,” “purchase option,” or “renewal.”

Pull out the full agreement, not just the first page. The details that matter most are often in the fine print. If you want a refresher on the rest of the contract, see our post on understanding your copier lease agreement.

Leasing companies each write their own terms, and there is nothing wrong with that. Your job is simply to know what yours says.

The Notice Window

Many leases require you to tell the leasing company in writing what you plan to do before the term ends. That is the notice window. The length of it varies from one agreement to the next, so read yours carefully.

Look for these points:

• How many days of notice are required
• Whether notice must be in writing
• Where the notice must be sent, such as a mailing address or email
• Whether a phone call counts (often it does not)

Mark the deadline on your calendar, then set a reminder well before it. Missing the window is one of the most common ways a business ends up with a choice it did not make.

Automatic Renewal

Some leases renew on their own if you do not act. This is called an automatic renewal or “evergreen” clause. If you miss the notice window, the lease may continue for another term, or it may roll forward month to month.

That is not always bad. If your copier still fits your needs, a renewal may be fine. The problem is when it happens by accident and you were hoping to switch to a newer machine.

Check three things:

• Does the lease renew automatically?
• For how long does it renew?
• What do you need to do to stop it?

If anything is unclear, ask your leasing company to explain it in writing. For questions about what the contract language means legally, confirm with your attorney.

Fair Market Value vs. a Fixed Buyout

If your lease includes a purchase option, it usually falls into one of two general types. Your agreement will say which one you have.

Fair Market Value (FMV)

With a fair market value lease, you can buy the machine at the end for what it is worth at that time. The amount is not set in advance. It is based on the equipment’s value when the lease ends.

This type often comes with lower regular payments during the term. It tends to suit businesses that expect to upgrade regularly and are not sure they will want to keep the machine.

Fixed or Nominal Buyout

Some leases set the buyout amount ahead of time, and it can be a very small amount. These agreements work more like a way to finance a purchase, since the plan from the start is that you will end up owning the machine.

Regular payments are often higher under this type, because you are paying toward ownership.

Which One Do You Have?

Look for words like “fair market value,” “purchase option,” or a specific buyout amount in the contract. If the wording is not clear, ask the leasing company to explain it.

Lease structure can also affect how the payments are treated for tax purposes. We cannot give tax advice, so please confirm with your accountant before you decide.

Wipe the Hard Drive Before It Leaves

This step is easy to forget, and it matters.

Modern copiers and multifunction devices can store data. Scanned documents, copied pages, fax records and address books may all be saved on the machine’s internal storage. If the device leaves your office with that data still on it, your information goes with it.

Before a machine goes out the door:

• Ask what data security options your model supports. Many Sharp devices offer data overwrite features, and we can help you check what yours can do.
• Clear stored address books, job logs and saved documents.
• Remove any network or email settings that connect the device to your systems.
• Ask for written confirmation that the data was erased, if you need a record.

If your business handles sensitive records, such as client files, health information or financial data, talk with your compliance officer or attorney about what you must do when equipment leaves your control. Wiping a drive is a smart step, but it does not by itself make your office compliant with any law or rule. For more on this topic, read our post on print security.

A Simple 90 Day Plan

The best way to avoid trouble is to start early. About 90 days before your lease ends, work through this list.

Around 90 days out:

• Find your lease agreement and read the end of term section
• Write down the notice deadline and any renewal terms
• Check your current meter readings and monthly volume

Around 60 days out:

• Decide whether you want to return, renew, buy or upgrade
• Ask the leasing company for any quotes or payoff figures you need
• Talk with your accountant if the choice has tax implications
• Request a quote for a replacement device if you plan to upgrade

Around 30 days out:

• Send your written notice, if one is required
• Schedule installation of the new device, if you are upgrading
• Plan the data wipe and the return or pickup details

At the end:

• Confirm the data has been erased
• Take photos and record the final meter reading
• Keep copies of all return paperwork
• Follow up to confirm the lease is closed

Starting early gives you room to compare options, ask questions and fix problems. It also keeps you from making a rushed decision to avoid a gap in service.

FAQ

Frequently Asked Questions