Impact of Today’s Economy on Lease-Term Lengths
April 2025 dealer poll, 42 U.S. respondents

Executive Summary

An April 2025 survey of 42 U.S. dealer and branch salespeople shows that lease-term expectations have settled into longer durations than two decades ago. Today, nearly 80 percent of A3 copier leases run 60 months, and more than 60 percent of A4 device leases run 48 months. While dealers once favored 36- to 48-month deals, higher equipment prices and steeper borrowing costs have pushed term lengths upward. Over the past two years, term lengths haven’t shifted appreciably—suggesting the market has embraced these longer structures for now. For office equipment resellers and their leasing-company partners, extended terms offer lower monthly payments for customers but require new approaches to residual management and service-agreement planning.

Survey Methodology

• Timing: Poll conducted April 2025
• Respondents: 42 salespeople (90 percent dealer channels, 10 percent branches)
• Geography: The study encompassed the greater U.S., covering both large and small markets
• Brands in Sample:
  • A3 copiers: Kyocera (21.4 %), Sharp (21.4 %), Canon (16.7 %), Toshiba (11.9 %), Konica Minolta (9.5 %), Ricoh (9.5 %), HP (4.8 %), Xerox (4.8 %)
  • A4 devices: Kyocera (28.6 %), Lexmark (21.4 %), Brother (11.9 %), HP (11.9 %), Canon (9.5 %), Sharp (4.8 %), Epson/Ricoh/Konica Minolta/Toshiba (combined 9.5 %)

Key Findings

A3 Copier Leases

• Term change vs. two years ago:
  • Longer: 9.5 % (4)
  • Shorter: 7.1 % (3)
  • Unchanged: 83.4 % (35)

A4 Device Leases

• Term change vs. two years ago:
  • Longer: 7.1 % (3)
  • Shorter: 9.5 % (4)
  • Unchanged: 83.4 % (35)

What’s Driving Longer Terms

1. Higher Equipment List Prices
   • Supply-chain constraints and material costs have nudged list prices upward. Dealers spread these higher costs over longer terms so monthly payments stay within customer budgets. With a looming recession and ongoing tariff discussions, office equipment prices are expected to increase for most, if not all OEMs in 2025.
2. Elevated Borrowing Costs
   • As benchmark interest rates rose in 2024 and early 2025, financing rates climbed. Extending lease durations softens the impact of higher finance charges by lowering each payment. Rates are not expected to come down in the near future.
3. Customer Preference for Predictable Cash Flow
   • End users in corporate and education markets often operate under tight capital budgets. A 60-month lease better aligns with budget cycles and keeps payments steady year to year.

Implications for Dealers and Leasing Partners

• Proposal Strategies
  • Lead with “five-year low-payment” messaging for A3 deals and “four-year plans” for A4 devices. Highlight total cost of ownership over term rather than just rate.
• Residual-Value Management
  • Longer terms mean residuals must be forecast farther out. Work closely with leasing-company sponsors to set realistic end-of-term values and plan upgrade cycles.
• Service and Parts Planning
  • With service-agreement revenue locked in for 48–60 months, adjust staffing and inventory models to cover mid- and late-term maintenance peaks. This is nothing new to office equipment resellers.
• Month to Month Impact
  • A rising trend in month to month leases, where the customer does not execute the buyout at the end and simply continues with their monthly payment, is concerning for resellers and the industry. Dealers should keep an eye on this and perhaps develop strategies that focus on converting month to month customers to new equipment.

The Two-Year Stability Check

Despite ongoing rate hikes and equipment-price shifts, 83 percent of dealers report no change in their preferred terms over the past two years. This suggests that 60 months for A3 and 48 months for A4 have become the new baseline. Unless we see a reversal in rates or a pricing correction, those durations are likely to stick. It’s interesting to note that higher pricing and rates have not pushed dealers to sell 72 month contracts.

Outlook

• Rate Plateau or Decline? If the Federal Reserve signals rate cuts later in 2025, dealers may reconsider 48- or 36-month terms to stay competitive—but only if list prices stabilize. Even with a rate cut, it is doubtful customers will migrate back to shorter term contracts.
• Emerging Tech Refresh Cycles: As A3 devices continue to take on more scanning and workflow functions, dealers may find opportunity in customer need for more devices throughout their offices. As print continues its decline, scanning and workflow are critical.
• Ongoing Partner Collaboration: Lean on your leasing-company partners for program design. Their ability to balance rate, residual and term will shape what end users choose.

Conclusion
Longer terms are no longer an outlier—they’re the expectation. Dealers and leasing partners must fine-tune proposals, residual planning and service models around 60-month A3 leases and 48-month A4 leases. As interest rates and equipment costs stabilize, term-length education will remain a core part of your sales playbook. By partnering closely with your leasing partners, you can keep monthly payments manageable for customers while securing reliable equipment-and-service revenue streams well into the future.

SOURCE Industry Analysts Inc.