Difference Between FMV and $1 Buyout Lease
You are about ready to sign your copier documents. You have the option to buy the copier or to lease the copier and the odd part about the lease is that you see the letters FMV on the lease. FMV in leasing terminology means that you have to physically send a copier back to the leasing company or pay what they believe the “fair market value” is at the end of the lease term. So how do the numbers work on a 5 year lease?
If you are looking to lease a $10,000 copier, your monthly payment is calculated by multiplying the base price of the copier to a lease rate factor.
Current lease rate factors for decent credit are about .02 for a FMV lease or .022 for a $1 buyout.
What this means is that for the equipment portion of the equipment portion of your lease, you would pay $200 for FMV or $220 for a $1 Buyout lease ($10,000 X .02 and $10,000 X .022)
With the $1 buyout, you would simply pay $1 at the end of the term and the copier is yours. You are also paying an extra $1200 for this. If you went with the FMV, you would likely get a buyout amount of about $2,000. So, deciding you want to keep it up front will be a better deal. Hope this explains the differences in copier leasing better. Feel free to call us if your Charlotte office needs a copier!