End of Term Options
Nobody likes surprises when it comes to spending money and my guess is that you don’t either. When it comes to equipment financing and leasing, the costs to purchase that equipment at the end of the financing term can be staggering. It is extremely important to understand what type of agreement you are getting into from the start.
Some common end of term options that you might see include
As a general rule of thumb if you choose to use the dollar buyout you are choosing a capital lease. A fair market value will normally be used with an operating lease and a fixed buyout can be used with either. The flexibility of the end of term options is one of the things that makes equipment leasing so unique. By increasing the size of the end of term you can lower your monthly payment and vice-versa. It’s a good idea to explore each of these options to see what might work best for you.
