What are my options at the end of the lease?
Fair Market Value One option is to purchase the equipment for its fair market value at the end of the lease term. Fair Market Value Leases are appropriate if you expect the value of the equipment to decrease quickly, or might be interested in updating your equipment at the end of the lease.
$1 Buyout Another option is to purchase the equipment for $1.00 at the end of the lease. This option allows the lease to be treated much as a conditional sales contract. A $1 Buyout is a good lease if you expect the equipment to retain its value over the life of the lease and will likely want to retain it at that time.
Fixed Purchase Options Fixed purchase options are appropriate if you prefer the flexibility of a FMV lease yet wish to cap the equipment buyout at a certain percentage of the equipment value. Common buyout options are 10-20% of original cost.