What is a $1 Purchase Option Lease?

A $1 Purchase Option Lease is one of the two most common leases that businesses use to acquire equipment today. The other is a Fair Market Value Lease . Each type of lease is useful, depending on the type of equipment and the type of anticipated use. A $1 Purchase Option Lease is often used by businesses or schools when they know they will still be using the equipment for an extended period after the end of the lease term.

Here are three things to know about a $1 Purchase Option Lease:

  1. Provides businesses the ability to purchase the equipment for a $1 at the end of the lease term.
  2. Monthly payments are higher than a Fair Market Value lease because the lessee is now financing 100% of the equipment cost.
  3. Provides additional financial benefits that may include depreciation and interest expense benefits for tax purposes.

Not sure which type is best for your business? Please contact us and we will walk through the options with you.

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