Home/Resources/Glossary/Buyout (Purchase Option)
Glossary Term

Buyout (Purchase Option)

The amount you pay at lease-end to own the equipment for good.

All glossary terms

In short

A buyout — or purchase option — is the amount you pay at the end of a lease to own the equipment outright. It's commonly a nominal figure (like $10), a fixed dollar amount, or the equipment's fair market value, depending on the type of lease you signed.

The common buyout types

The buyout is set when you sign, and the type shapes both your monthly payment and your end-of-term cost:

  • $10 (nominal) buyout — you're effectively financing to own; ownership transfers for a token amount at the end.
  • Fixed / stated buyout — a set dollar figure agreed up front, known from day one.
  • Fair market value (FMV) buyout — you pay the equipment's market value at term-end, which keeps monthly payments lower but leaves the final price open.

Choosing the right option

If your goal is to own the equipment long-term, a $10 or fixed buyout gives certainty and usually the lowest total cost of ownership. If you upgrade often and may return the asset, an FMV lease lowers monthly payments and keeps your options open. The best choice depends on how long you plan to keep the equipment.

Common questions

Do I have to buy the equipment at the end?

Only on a $10 or fixed-buyout structure, where ownership is the intent. On an FMV lease you can buy, return, or sometimes renew.

Is the buyout amount negotiable?

The structure is agreed at signing. On an FMV lease the final figure depends on the asset's market value at term-end rather than a set number.

General information only. This page is educational and does not constitute financial, legal, or tax advice. All financing is subject to credit review and lender approval. Rates, terms, and eligibility vary by applicant, asset, and lender, and are not guaranteed. Any figures or examples are illustrative. Please speak with a qualified advisor about your specific situation.