1 / The payment divided by the price
Copier lease rate factor: what it is and how to read one
A lease rate factor is your monthly payment divided by the price of the machine. It is a quick way to compare finance quotes, and an easy way to compare the wrong things. Here is the math on our own published numbers, and what to check before you trust a factor.
$249 a month over 60 months and $7,500 are the lease payment and refurbished purchase price used on printree.com/copier-lease-vs-buy. The $100 a month service figure is a typical market rate, not a Printree rate. Factors rounded to four decimal places.
2 numbers make a rate factor: the monthly payment and the equipment price.
The formula, in one line
Rate factor = monthly payment / equipment price. Equipment price x rate factor = monthly payment. A factor is a decimal, not a percentage, and it is not an interest rate.
Lease payment used: $249 per month (mid-range), all-in over 60 months. Purchase price used: $7,500 refurbished. Source: printree.com/copier-lease-vs-buy, “The assumptions behind every figure below”.
$249.00 / $7,500.00 = 0.0332
Check: $7,500.00 x 0.0332 = $249.00
This is the all-in factor: the bundled payment divided by the purchase price, not Printree's finance rate.
The same factor on a different price gives a different payment, which is why a factor alone tells you nothing until you know what price it was applied to; you can estimate your monthly payment with the payment and term in view.
$100 a month: the typical market cost of service on a bought machine at 5,000 black-and-white and 500 colour pages.
Why a bundled quote reads higher
Our $249 monthly figure over 60 months is all-in. Many finance quotes cover the equipment only, with service on a separate contract.
“Printree's $249 figure already includes service, parts, labour and toner.”
Source: printree.com/copier-lease-vs-buy
“Service contract after purchase: typical market rates of $0.012 per B&W page and $0.08 per colour page = $100 per month = $6,000 over 60 months”
Source: printree.com/copier-lease-vs-buy
Example equipment share using typical market service, not Printree rates
$249.00 - $100.00 = $149.00 equipment share (example)
$149.00 / $7,500.00 = 0.0199 (rounded from 0.019867)
| Factor | Payment used | Price | Factor |
|---|---|---|---|
| All-in (machine, service, parts, labour, toner) | $249.00 | $7,500.00 | 0.0332 |
| Equipment only (example) | $149.00 | $7,500.00 | 0.0199 |
Example only. The $100 a month service figure is a typical market rate from printree.com/copier-lease-vs-buy, not a Printree rate, and this is not Printree's finance rate.
Before you compare factors across two quotes, ask each one what the payment includes and what price the factor was applied to.
$326.39: where a $249 payment lands in year five at 7% escalation.
The factor on page one isn't the factor in year five
A factor on a quote describes the first payment. This all-in escalation example uses a 60-month term and holds the $7,500 purchase price constant.
“At 7%, the same $249 starting payment reaches $326.39 in year five, and the five-year total is $17,183 rather than $14,940.”
Source: printree.com/copier-lease-vs-buy
$326.39 / $7,500.00 = 0.0435 (rounded from 0.043519)
Year one: 0.0332. Year five: 0.0435.
With 0% escalation the payment, and so the all-in factor, never moves; the industry norm is 5-10% a year, so read the escalation clause for the rest.
$14,940.00: 60 payments of $249.
What the factor leaves out: the full-term total
The factor shows one month; the contract is every month. This is the same 60-month all-in example, with service valued at typical market rates rather than Printree rates.
60 x $249.00 = $14,940.00
$14,940.00 - $7,500.00 = $7,440.00 paid above the purchase price
60 x $100.00 = $6,000.00 of that is service at typical market rates
$7,440.00 - $6,000.00 = $1,440.00
That $1,440 is the same gap printree.com/copier-lease-vs-buy reports between leasing from us and buying refurbished plus a service contract; see lease vs buy for that decision.
Per year:
$209.00 x 12 = $2,508.00
$349.00 x 12 = $4,188.00
| Term | At $209/mo | At $349/mo |
|---|---|---|
| 36 months | $7,524.00 | $12,564.00 |
| 48 months | $10,032.00 | $16,752.00 |
| 60 months | $12,540.00 | $20,940.00 |
| 63 months | $13,167.00 | $21,987.00 |
Monthly payment multiplied by the months in the term, at 0% escalation and $0 down. Service, parts, labour and toner included; overage and paper not included.
$209-$349 a month on terms of 36, 48, 60 or 63 months is our published price for a full-size 45ppm colour MFP with 5,000 black-and-white and 500 colour pages included; see what a lease costs for the full pricing picture. Source: printree.com/faq, “How much does it cost to lease a copier?”
36, 48, 60 or 63 months: the term is the first thing that changes a factor.
What moves a rate factor
Longer terms spread the price over more payments. The end-of-term option, fair market value vs $1 buyout, is another thing a factor depends on.
Escalation changes later payments, as section 4 shows. What is bundled into the payment changes what you are dividing, as section 3 shows. The price the factor is applied to matters just as much as the factor.
A copier lease is non-cancelable, so the factor you sign applies for the full term, subject to any signed escalation; read about getting out of a copier lease before signing.
These all-in and equipment-share examples do not state or estimate our own finance rate, interest rate or funding terms.
6 questions about reading a rate factor.
Frequently asked questions
What is a copier lease rate factor?
A copier lease rate factor is the monthly payment divided by the equipment price. Using a $249 all-in monthly payment over 60 months and a $7,500 refurbished purchase price, $249.00 / $7,500.00 = 0.0332. This is an all-in factor, including service and toner, not a statement of Printree's finance rate. The factor is a decimal multiplier, not an interest rate.
How do I calculate a lease rate factor from my quote?
Divide the monthly payment on your quote by the equipment price used on that quote. Ask which price the quote uses and whether the payment includes service, parts, labour and toner or only equipment. Multiplying that price by the factor gives the payment back. Check the named term too, because one monthly payment does not show your full commitment.
Is a lease rate factor the same as an interest rate?
No. A lease rate factor is a decimal multiplier applied to an equipment price to give a monthly payment. It is not an annual interest rate, and the all-in factor on a bundled quote also reflects the services included in that payment. Read the payment, the price and the inclusions together rather than treating the factor as an annual rate.
Why does a bundled copier lease have a higher rate factor?
A bundled payment includes more than equipment. Subtracting $100 a month of typical market service from a $249 all-in payment over 60 months leaves a $149 example equipment share. Dividing that by $7,500 gives 0.0199, rounded. The $100 is a typical market service figure, not a Printree rate; 0.0199 is an example, not Printree's finance rate.
Does the rate factor change during the lease?
Only if the payment escalates, with the equipment price held constant. In the 7% escalation example over 60 months, the all-in factor rises from 0.0332 to 0.0435 by year five. Our escalation is 0% on every term of 36, 48, 60 or 63 months, so the signed monthly payment and its all-in factor do not rise during the term.
What should I compare besides the rate factor?
Compare the full-term total, what the monthly payment includes and the escalation clause. At $249 a month over 60 months, the total is $14,940.00. Check whether service, parts, labour and toner are included before comparing that with an equipment-only payment. A copier lease is non-cancelable, so read the entire payment commitment rather than relying on the first month's factor.
8 / Check the payment and the named term