Three Different Ways to Lease a Plotter in New Jersey

By Art Post | November 1, 2024 | Comments Off on Three Different Ways to Lease a Plotter in New Jersey

We’re going to cover some of the traditional ways to lease a plotter and some of non-traditional ways to lease a plotter in New Jersey.

Plotters

First, I need to clear the air about what a plotter is and why the word plotter can be ambiguous.

A plotter is a type of printer designed for producing large-format graphics, technical drawings, and architectural plans. Unlike regular printers that use a series of tiny dots to form images, plotters use continuous lines drawn with a pen, blade, or inkjet nozzles. Plotters are commonly used in fields like architecture, engineering, and design, where precise line work and large-scale outputs are essential.

Today’s office plotters use two different print technologies. One technology that uses liquid ink and the other using dry toner (fine powder).

FMV Lease

There are two basic types of leases in use. The first is Fair Market Value and is the most common used finance vehicle for leasing plotters in New Jersey. Fair Market Value (FMV) offers unique value points to the lessor.

  • FMV leases gives you the lowest monthly cost and the least amount of interest charged over the term
  • FMV leases are tax deductible, which allows you to deduct the entire lease payment every month of the lease
  • FMV leases allows the client to have multiple options at the end of the lease term.
    • Buy the plotter from the leasing company, anywhere from 15-25% of the purchase price
    • Return the plotter at the end of the lease to the leasing company. The lessee will need to pay the cost to return the plotter to the leasing company
    • Upgrade the lease to a new plotter
    • If you don’t select one of the above options the lease will go into auto renewal for “x” amount of months or years. Be wary of leases that have a 12 month or longer auto renewal.

Why FMV?

Around eighty percent of my clients lease with FMV because of the tax advantages. In addition the client does may not want to keep the plotter for more than five years. If you’re more interested in have the latest in technology and security, then the FMV is best.

$1.00 Out Lease

A finance lease is commonly referred to as a “$1.00 out lease.” In this type of lease, the lessee (the customer) agrees to pay a fixed amount over the lease term and, at the end of the lease, has the option to purchase the equipment for a nominal price—typically $1.00. This nominal purchase option means that the lessee essentially gains ownership of the asset at the end of the lease, making it function similarly to an installment loan.

  • $1.00 out gives higher monthly cost when compared to FMV. This is because the client will own the plotter at the end of lease.
  • If you intend to keep the plotter longer than 5 years, then $1.00 out lease is a better option. This is because a client will not have to deal with the end of lease options.
  • $1.00 leases qualify for Section 179 of the IRS Tax Code.
    • Allows businesses to deduct the full cost of qualifying equipment and software purchases from their taxable income in the year the assets are put into service, rather than depreciating the expense over several years. This can lead to significant tax savings and is particularly beneficial for small and medium-sized businesses needing upfront deductions to offset their income. You can find out more here and also speak with your accountant.
Ricoh Tray ROT-1

Term of Lease

Typical wide format aka plotter leases are either 36 months or 60 months. The longer the term of lease will represent the lowest monthly cost. Of course moving to a shorter term lease will have a higher monthly cost. Moving to a shorter term lease will save clients the interest cost on the plotter lease. Lease terms start at 12 then 24, 36, 48, 60 and 72 months. Stay away from 39 month and 63 months leases because there is no financial benefit besides a lower monthly cost.

If you’re not a fan of paying interest, and you don’t have available capital to purchase the plotter. A 12 month $1.00 out lease will give you the short term and the lowest amount of interest.

Specialty Lease

Specialty leases were popular years ago, however in recent years leasing companies have simplified their lease offerings. Here’s some programs that I used for my clients over the years.

  • Bakers Dozen Lease
  • Seasonal Lease
  • Step Lease

Feel free to reach out to me if you have any questions. 732.977.1211

Art Post

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