Fair Market Value Purchase Option
Definition of 'Fair Market Value Purchase Option'The right but not the obligation to buy a leased asset at the end of the lease term for a price that represents the item's then-current worth. The Fair Market Value Purchase Option does not provide the purchase price in advance, but as long as the assessed fair market value is accurate, the consumer will not overpay for the asset and the lessor will not receive less than the asset is worth. |
|
Investopedia explains 'Fair Market Value Purchase Option'Types of assets that may come with a fair market value purchase option include automobiles, real estate and heavy equipment.A common alternative to the fair market value purchase option is the fixed price purchase option, which allows the lessee to know for certain what the cost to purchase the property at the end of the lease term will be. Because it is impossible to determine an item's fair market value in advance of the item's purchase date, a purchase price cannot be established in advance with a fair market value purchase option. |
Related Definitions
Articles Of Interest
-
Top 10 Ways To Get Top Dollar For Your Car
Find out what steps you can take to reduce the depreciation of your vehicle. -
12 Car Insurance Cost-Cutters
If car costs are dragging you down, find out how to free yourself from some of the extra weight. -
Wheels Of A Future Fortune
Buy a quality car without driving your expenses through the roof. -
New Wheels: Lease Or Buy?
These two major ways to obtain a car have very different advantages and drawbacks. Find out which is best for you. -
Beginner's Guide To Auto Insurance
Find the perfect policy that suits both your coverage and budgetary needs. -
The True Cost Of Owning A Car
Driving is often the most convenient way to get around, but it'll cost you. -
Your Car: Fixer-Upper Or Scrap Metal?
Sometimes buying a new car can be cheaper than shelling out for repairs. -
The Auction Method: How NYSE Stock Prices are Set
The New York Stock Exchange (NYSE), sometimes referred to as “the big board,” is the oldest and largest stock exchange in the United States. NYSE is the place investors think of when ... -
The Closing Cross: How Nasdaq Stock Prices Are Set
When you hear that your favorite stock closed at a record high price, have you ever considered how that price was reached? The calculation effort is far more complex than you might expect. To ... -
The Opening Cross: How Nasdaq Stock Prices Are Set
The National Association of Securities Dealers Automated Quotations, commonly referred to as Nasdaq, is a computerized marketplace where stocks are traded from 9:30am to 4pm Eastern Standard ...
Free Annual Reports