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$1 buyout vs fair market value lease calculator

See both lease payments side by side, and what each one really costs if you keep the equipment at the end. Change the numbers and the answer updates as you type.

Enter the equipment price, the term in months, the lease rate and the fair market value at the end. The starting rate is only an example, so put in the rate you were quoted. Your rate depends on your credit, time in business and the equipment. A guess at what it will be worth, as a percent of the price. On a true FMV lease nobody knows the real number until the term ends.

Your estimate: $100,000 over 60 months at an example 10%, 15% end value

$1 buyout

$2,124.69 a month, $127,481 in payments, $1 to buy it, $127,482 if you keep it

FMV lease

$1,931.00 a month, $115,860 in payments, $15,000 to buy it, $130,860 if you keep it

If you keep it at that price, the FMV route costs $3,377 more than the $1 buyout, and you do not know the final price until the end.

If you hand it back, you pay $115,860 and own nothing. The $1 buyout costs $11,623 more, and the equipment is yours.

The two come out even if the end price is $11,623. Above that, the $1 buyout wins if you keep it.

An estimate with level payments at the end of each month. Many leases take the first payment, or the first and last, up front. Fees and sales tax are not included.

Free, soft pull only.

The lower payment is not a lower price

These examples use $100,000 over 60 months at an example rate of 10%. At a 15% end value, the FMV lease saves $194 a month, then costs $3,377 more in all if you buy the equipment at the end.

• 10%, $10,000: $2,125 a month on the $1 buyout, $1,996 a month on the FMV lease, $129 saved a month, $2,252 extra if you keep it
• 15%, $15,000: $2,125 a month on the $1 buyout, $1,931 a month on the FMV lease, $194 saved a month, $3,377 extra if you keep it
• 25%, $25,000: $2,125 a month on the $1 buyout, $1,802 a month on the FMV lease, $323 saved a month, $5,629 extra if you keep it

What you are really choosing

A $1 buyout lease pays off the whole machine during the term. An FMV lease pays off only the part you use up, and leaves the rest as a decision for the end: buy it, renew, or hand it back. So the question to ask first is whether you want to keep the equipment.

Why keeping it costs more on an FMV lease

The money you did not pay during the term still earned the lender interest, so paying it at the end costs more than paying it along the way. The gap shrinks if the equipment turns out to be worth less than you guessed, and grows if it holds its value better.

Buyout questions, answered

What is the difference between a $1 buyout lease and an FMV lease?
A $1 buyout lease has you pay for the whole machine over the term, then buy it for a dollar. A fair market value (FMV) lease has a lower payment because you pay for only part of its value, and at the end you buy it at what it is worth then, renew, or hand it back.

Which one costs less?
It depends on whether you keep the equipment. If you keep it, the $1 buyout usually costs less overall at the same rate. If you hand it back, the FMV lease costs less cash, but you end the term owning nothing.

What end value should I enter?
Your best guess at what the equipment will sell for when the term ends, as a percent of today's price. Look at what similar used equipment sells for now. Try a few values, because nobody knows the real number on a true FMV lease until the end.

Does this calculator include taxes?
No. A $1 buyout lease is generally treated as a purchase and a true FMV lease as rent, and sales tax can differ too. Ask your CPA how each one works for your business, with the actual lease in hand.

Does EFN set the rate or offer these leases?
No. EFN is a match and routing service, not a lender. The lender you are matched with decides which structures it offers and sets the rate and terms. EFN is free for you.

See which lenders fit your deal.

One short application, soft pull only, and free for you. A person reviews your file and matches it with a lender that does deals like yours. That lender sets the rate and terms, and it can tell you which structures it offers.

$1 buyout or FMV lease: the guide · Equipment lease vs buy calculator · Equipment loan payment calculator

This calculator gives estimates only. It is not a quote, an offer or a pre-approval, and nothing you type here is saved or sent anywhere. It is not tax advice. Equipment Funding Network is a match and routing service, not a lender. The lender sets the rate and terms.