What are "end-of-lease options"?

"End-of-lease options" refer specifically to the choices available to the lessee at the conclusion of a lease term. These options can typically include the ability to purchase the leased asset at a predetermined price, extend the lease for an additional period, or return the asset to the lessor without any further obligations. This framework provides lessees with flexibility in their decision-making as they approach the end of the lease, allowing them to assess their needs and financial situations.

Understanding these options is critical for lessees, as choosing the most advantageous one can influence their future financial commitments and equipment management strategies. The nature of these options can vary based on the lease agreement and the asset in question, but they serve to empower lessees with control over their leased resources when the lease reaches its conclusion.