Franking machine buying options - Should you lease, rent or buy a franking machine?

Now you have decided that you need a franking machine to meet your company’s mail and sending needs. The next question is which option do you choose to pay for your machine?

Franking machines, Royal Mail and franking machine suppliers

With 30 years’ experience in the franking machine market, Franking Sense is vastly experienced in giving the best advice regarding the options that are available. Franking machines are controlled and managed by franking machine suppliers and then ultimately by Royal Mail. Franking machine suppliers provide the hardware and mandatory service/support agreement, then funds are deposited into your business postage account. Royal Mail manage the physical delivery of mail in the normal way and then receive payment through a postage account. Due to the money transfer criteria, franking machines are governed by a licensing scheme. More details can be found on the Royal Mail website.

The Royal Mail Franking Scheme covers usage and protects all parties against misuse and compliance. The Franking scheme is followed and implemented by your chosen franking machine supplier. All Franking Machine suppliers have to be approved by Royal Mail as a capable and complaint company in monitoring and enforcing any breaches of the rules. Interestingly, Franking Sense was the first independent (non manufacturer) company in the UK to be awarded this authority and was instrumental in developing the process to allow 3rd party maintainers to enter the franking and mail processing market place.

This historical record provides UK business the comfort they need when making a new purchasing decision.

There are 3 options available from Franking Sense to acquire your franking machine and the choice you make will depend on what best suits your budget and your current and future needs. With Franking Sense, you can:

• Lease your franking machine on a flexible lease plan (most common option);
• Rent your franking machine on a short-term rental plan.
• Purchase your franking machine;

The most common options are leasing or renting your franking machine as this avoids up-front outlay and favours better cash flow as you are able to spread the cost. Leasing a franking machine also allows you to take advantage of changing market trends, allowing for regular upgrades without losing capital invested in redundant hardware. Let’s take a look at these payment options in more detail:

Leasing a franking machine

Through our sister company, Nationwide Capital Finance Limited, Franking Sense is able to offer flexible lease plans to finance your franking machine. Although a separate business, the knowledge of capital equipment leasing built over time gives Nationwide Capital Finance Limited the ability to be agile and offer quick decision-making and better customer support in the event of changes over the life of the contract. So getting your Franking machine is simple, co-ordinated and hassle-free.

What is a franking machine lease? A franking machine lease is a contractual arrangement whereby Franking Sense licenses and supplies the franking machine to you with no up-front cost in return for regular fixed price quarterly, monthly or yearly payments. As the lessee, you agree to abide by various conditions regarding the use of the franking machine.

Ownership of the franking machine remains with Franking Sense at the end of the contract, at which time the machine can be renewed, retained or returned.

Leasing a franking machine from Franking Sense for your business has several benefits:

• Allows you to take advantage of the immediate savings on your postal costs without the need for up-front investment; you pay as you go and the savings on postage you make can offset the acquisition costs making it a very efficient way of obtaining your franking machine. This is the main reason over 90% of all new franking machine installs are supplied on a fixed price lease agreement;
• As you pay regular quarterly rentals, you can plan cash flow accurately;
• Service and Support agreements can be collected by direct debit at the same time as the lease agreement. The service element is then paid over to the supplier after collection to reduce paperwork for the customer. This makes it very simple for the customer to have peace of mind as everything is taken care of in one transaction.
• Gives you flexibility to upgrade or right-size your machine during the agreement. Thanks to our in-house finance, if your business changes, we can arrange for any agreement to be cancelled and renewed internally with no 3rd parties involved, creating a smooth and professional transition between contracts.

Leasing is by far the most popular, flexible and cost-effective way of getting a franking machine. Thousands of Franking Sense customers lease their franking machine from us. If you are a Limited Company or LLP with more than one set of accounts published and a Franking Sense customer, you are guaranteed acceptance for finance on the equipment you have chosen.

Renting a franking machine

If you are a new start-up company or a sole trader without a trading history, don’t worry as we can still help. We are happy to offer you a short term all-inclusive rental arrangement in order to get you started with your franking machine. The all-inclusive agreement includes the machine and a fully comprehensive service and maintenance agreement. Rental Plans would be typically 12 – 24 months long but can vary dependant on the application and needs of the customer. Rental plans are normally starter franking solutions that allow customers to test the water and try the technology before making a more formal commitment on a lease.

As with leasing, we will license and supply a franking machine in return for a regular one-off rental payment. Title of the equipment always stays with Franking Sense and when the agreement expires the hardware will come back to us. If your mailing volumes increase or change to requiring a combined mailing and shipping solution or a higher capacity franking machine becomes necessary, then we can normally offer varied lease terms for a better suited machine.

A quick word of warning about low cost renting solutions - Beware of some of the ‘too good to be true’ rentals you may see advertised. These offers tend to frequently involve second user or refurbished franking machines. These teaser offers are designed to hook new customers in with low headline pricing but come with expensive extra over charges.

These costs are not very often disclosed at point of sale and cause distress to customers if they find out about them over time. We have discovered that when you when you add back all the overcharges and expensive consumable costs, you are in most cases better off converting to a more professional or traditional franking machine agreement.

Buying a franking machine

Purchasing a franking machine is less common in this market as the equipment changes periodically and in some cases new software and technology advances mean customers have to get brand new hardware. An example of this recently was the introduction of the new Royal Mail Mailmark indicia upgrade and pricing scheme. This new technology introduction meant customers needed to buy a new franking machine to take advantage of the lower pricing structure. Depending on the size of machine and the type of features you need, this may be a few hundred pounds or several thousand pounds. If you’ve got an office equipment budget to clear, this might be an attractive option. However, whilst the purchase option avoids the need to commit to a financial agreement, if the franking machine was leased or rented it could be simply swapped out with no capital losses on the equipment if the asset had not been depreciated fully.

It is important to note again at this stage that franking machines are licensed by Royal Mail. As such, the licence, by its nature, can be revoked if any breaches are made or conditions of supply are not adhered too even though you have acquired the equipment. For this reason amongst the others discussed, we find nearly all of our clients historically prefer and have chosen to lease the Franking Machine in a simple all in one finance agreement and purchase ink, post, envelopes, labels etc. on demand as required.

Ready to lease, rent or buy your franking machine?

Get a franking machine quote from Franking Sense now. Request a franking machine quote.