How much to buy title after lease?

gazfocus

Well-known member
I know this is a bit of a daft question, especially given it will largely depend on the country I'm in and so on, but I am coming to the end of the lease on my Konica C3070 and I would like to buy out the remainder of the lease. The lease company have advised that the lease does not transfer title to myself once the lease is fully paid and that I would need to contact Konica Minolta UK to discuss purchasing the title.

I've tried reaching out to Konica Minolta UK but have not been very good at getting responses from them and so I wondered if there was anyone here who may have experience of doing similar and if so how much should I expect to pay?

The lease I have states that at the end of the agreed term, the lease will be extended every 3 months and I will pay the same figure as I'm paying now. I don't understand why anyone would pay the same for an older machine if they could get a brand new model for the same price but what I'd like to consider is buying a new machine on lease and keeping my existing one solely for sticker printing and as it has low usage (approx 180,000 colour clicks) it is probably the best 'used' machine I'd ever be able to purchase.
 

gregbatch

Well-known member
You may have to look deeper into the lease, especially any associated documents. KM loves referring to "Policy" documents in their contracts. Those policies may have hidden charges built in. Annual click increases, etc. If it is fair market value buyout, it often says what that is based on (ESTIMATED). Depending on how popular the machine is, the real figure could be higher or lower. Also, read carefully the requirements to terminate the lease. You may have to provide termination notice in writing 60 DAYS in advance. Too may have been stuck with an extra 90 days because of this. If you are getting another machine it is helpful. We've had companies give us the old machine if we lease a new one. (leaving a few brochures out for competitor machines doesn't hurt)
 
There is no such thing as a "daft" question!

I don't know how equipment leasing works in the U.K.; all I can comment on is how equipment leasing generally works in the U.S.

For MOST equipment leases in the U.S., BEFORE you enter into the lease agreement three (different) end-of-lease options are explained to you (and, when you enter into the lease agreement, you pick which option you want to have at end-of-lease):

Option 1 - "FMV Buyout" - purchase the equipment at end-of-lease for a $ amount equal to the THEN Fair Market Value (FMV) of the equipment. At lease end, the leasing company tells you what the FMV is, and you either buy it for that amount, or you return the equipment to the lessor.

Option 2 - "10% Buyout" - purchase the equipment at end-of-lease for a $ amount equal to 10% of the all-cash price the vendor quoted you for the equipment. At end of lease, you pay the 10%, or you return the equipment to the lessor.

Option 3 - "$1.00 Buyout" - purchase the equipment at end-of-lease for $1.00.

Caution: never, ever let an equipment lessor bundle click charges into a lease! If you do that, then, if, for any reason, you decide not to use the equipment for the full term of the lease, you will end up paying for click charges you will never use.

Before you enter into an equipment lease, always ask your vendor for the answer (in writing) to this question: "what will you sell me the equipment for if I'm willing to pay all cash up front"? For, if you know the answer to that question and go with a 10% buyout option in your lease, you will know up front what the 10% buyout will cost at the end of the lease.

Speaking frankly, I saw no reason to lease equipment; it was almost always less expensive to get a bank loan to finance the equipment.
 

gazfocus

Well-known member
You may have to look deeper into the lease, especially any associated documents. KM loves referring to "Policy" documents in their contracts. Those policies may have hidden charges built in. Annual click increases, etc. If it is fair market value buyout, it often says what that is based on (ESTIMATED). Depending on how popular the machine is, the real figure could be higher or lower. Also, read carefully the requirements to terminate the lease. You may have to provide termination notice in writing 60 DAYS in advance. Too may have been stuck with an extra 90 days because of this. If you are getting another machine it is helpful. We've had companies give us the old machine if we lease a new one. (leaving a few brochures out for competitor machines doesn't hurt)
Thanks for the replies.

The lease I have is with a third party finance company and I don't appear to have any form of agreement with Konica Minolta apart from the service agreement. I have tried reaching out to both our sales rep at Konica and the credit control contact but neither have responded. Maybe I should re-word my email and say I'm thinking of buying another machine but want to pay off the lease of this machine first...maybe the sniff of a sale will get a response.

For MOST equipment leases in the U.S., BEFORE you enter into the lease agreement three (different) end-of-lease options are explained to you (and, when you enter into the lease agreement, you pick which option you want to have at end-of-lease):
This is interesting. I was actually unaware at the time of purchasing the machine that it was even on a lease. We had discussed with the sales rep about purchasing the machine with cash. We had a cash invoice from him, then decided to apply for finance through Konica Minolta. It was only when I asked the finance company for a settlement figure that I found out that it was a lease agreement and they sent me a copy of the documents that Konica had never supplied me. They also advised that the title will not pass to me when the contract ends and if I wish to purchase the title I need to speak to Konica directly.
 
I should have also mentioned to you that when you enter into a LEASE Agreement, the lease specifies a certain number of months that the lease will be in effect (for example, it's a 36 month lease, a 48 month lease, a 60 month lease, etc.) Under a lease, you are obligated to pay the monthly lease payments for the FULL TERM of the lease, even if you, for any reason, unplug the equipment and put it in your storeroom area. If you want to end a lease "early" (and aren't trading the equipment in on a new model from the same manufacturer, in which case, "most" will "make a deal"), then the leasing company will most likely tell you that, to end the lease, all you've got to do is multiply the monthly payment times the number of remaining payments...... and send them the check. In other words, you don't get ANY discount for paying off the lease early. (Why would they bother to give you an early-pay-off discount when they have no obligation to do so?)

All that said, if, to replace the K/M C3070, you are considering acquiring (by whatever method), a NEW K/M imaging device, you should definitely ask if K/M can "make you a deal" on the "trade-in" of the 3070 on a new model.
 

Ynot_UK

Well-known member
@gazfocus if the machine has served you well, with such low mileage on the clock, I'd definitely look to buy it, provided I'd got a dealer lined up to put it on a click contract. It's in their interest to sell it to you, as otherwise it will be sold to a dealer for much less, then there's the removal costs. That machine is barely run in, averaging circa 4k-5k clicks per month.
 

gazfocus

Well-known member
Thanks both. The lease agreement specifies it’s for 5 years (60 months). We got the machine in August 2018 so have 18 months remaining. The lease company gave us a settlement figure of £8k and as we’ve got the cash available I’d like to pay it off if we can.

@Ynot_UK definitley. The machine is such low usage, has had a couple of issues but we would never get anything with such low usage if we were to buy used. To be honest, even if I didn’t plan on using it much, I’d much rather keep it as a spare than let it go with 180k clicks on it.

It’s currently on a service contract direct with Konica Minolta UK so I’d hope to keep it on the service contract.
 

Ynot_UK

Well-known member
It’s currently on a service contract direct with Konica Minolta UK so I’d hope to keep it on the service contract.
Now may be the time to look at other options on that front.
  • If the £8k settlement figure has no strings attached and buys you out of the current lease and transfers title on a 3½ year old machine with 180k on the clock, that looks to be a great deal IMO.
  • I imagine your plan, all things considered, is to get another 5+ years use out of the machine. It is highly unlikely KM (or any OEM for that matter) will be warm to that and will factor in increases to make it an unattractive proposition, particularly in the later years.
    • The C3070 was a current line until 12/20 when the C4070 replaced it. Therefore parts & consumables will be available for at least another five years, in reality longer as the C4070 shares many of the same.
  • If in your position, I'd look for a dealer to take it on and fix the CPC for a five year term. Obviously the dealer would want to inspect and carry out any work to bring it up to spec before putting it on contract, however from what you've described, this would be minimal.
 

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