Dollar buy out leases give you the option of purchasing the equipment you lease at the end of the agreement. Over the course of the contract, you’ll make a fixed monthly payment on the dollar buy out lease and then have the ability of paying a nominal fee for the equipment in order to own it.
With dollar buy out leasing, you’ll pay more than a true lease. With a true lease, you pay the fair market value of the equipment and don’t receive a buy out option at the end of the contract. Although you pay more on lease buy out loans, you’ll have the ability to record the equipment as assets.
1. Locate the equipment you wish to lease with a dollar buy out option. Find a supplier with the equipment you want to lease and get an estimate on the value of the pieces.
2. Apply for a dollar buy out lease. After selecting your equipment, you can get information about dollar buy out leases and start the application process through a financial institution.
3. Make payments on the lease buy out loan. After you’re finished with the contract, pay the dollar fee and ownership transfers to you.
Find out about the buy out of leased equipment processBefore you start the application process on a dollar buy out lease, you'll need to find a supplier that permits this type of financing. Go through an equipment leasing company prior to applying for any lease buy out loans.
Compare costs of a lease buy out loan versus a true lease loanOnce you decide on the equipment that you wish to buy, you'll want to get cost estimates on dollar buy out leasing services against true leasing loans. The financial institution can let you know the best option for your budget and the type of equipment you're leasing.
Send in an application online for lease buy out loansAfter settling on the dollar buy out option, you'll want to get the application process on its way. Processing of your information may take several weeks and if you need the equipment quickly, you'll want to move the process along.
- With dollar buy out leasing, for tax purposes, you're considered the owner of the equipment. Therefore, you maintain control over its value and may have the ability to list it as a deduction when you file your taxes.