Financing method that permits potential buyers to lease property for a period with an option to buy.
A financing arrangement in which an asset (e.g., a tractor) is leased for a period of time and then purchased at a price specified in the lease-purchase contract.
A method of acquiring ownership of property whereby all or a portion of rent payments made under terms of a lease may be subsequently applied to the purchase price.... read full article
an optional form of acquiring ownership of merchandise by renting an item for a specified period of time without incurring debt or continuing obligation. Also known as rent-to-own or rental-purchase.
The lease purchase contract sets the closing date and provides remedies to the seller if the buyer defaults. (a type of delayed closing)
The least popular form of financing. With a lease-purchase, the seller agrees to lease the property for a short period of time and at the end of the period the buyer may purchase the property at a specified price. Usually, the buyer makes a deposit which may later be used as part of the down payment. Depending upon the contract, all or a portion of the lease payments may also apply to the purchase price. A lease-purchase may also be called a “lease with option to buy.” In addition to the terms above, in an option the buyer would have the “right of first refusal” if the seller decided to sell the property prior to the time the option matures.