The requirement to purchase an asset at a particular time and at a predetermined price. In a lease transaction, this is a lessor’s right to require the lessee (or some third party) to purchase the asset at the end of the lease term. (U.S. Equipment Leasing Association)


[See also Bargain Purchase Option, Fair Market Purchase Option, Fixed Purchase Option]

A provision by which a lessee has the right to purchase the equipment at the end of the lease. The purchase option may be stated at a specified amount or at fair market value. (U.S. Equipment Leasing Association)


This is the interest rate applicable to determine the portion of lease payments that are treated as notional repayments of principal under the April 1989 income tax revisions. The rate is set monthly and is one point greater than the long-term Government of Canada bond rate of the month before the immediately preceding month. (Leasing in Canada [Third Edition], Ralph Selby, FCA, Butterworths, 1999)