Fair Market Value Lease Buyout Calculator

How it is calculated

Two steps: residual = original value × residual% ÷ 100, then buyout = residual + purchase fee. The original value is the starting figure the lessor uses (often the capitalized cost of the equipment), the residual percent is the share of it still assumed to be left at lease end, and the purchase fee is a flat amount in the same currency. If you leave the fee empty it is treated as zero. The tool rejects negative values and needs both the original value and the residual percent. It shows the buyout, the residual part and the fee separately. It does not add sales tax, title or registration charges, or discount for time value, so add those yourself if your contract has them.

Common mistakes

• Typing the residual as a decimal (0.22) instead of a percent (22); the result would be about one hundredth of the right value.
• Using the monthly payment or the current market value as the original value; the field expects the starting or capitalized figure the residual percent applies to.
• Forgetting that taxes, title and registration costs are not included, so the real cash needed at closing is higher.
• Assuming the residual percent is a guaranteed price: on a fair market value lease the actual price is set near lease end and can differ from the contract estimate.