Fair Market Value Lease: How It Works
No residual value guess upfront. The truck's actual value at lease-end decides your options.
Fair Market Value Lease
No residual value is locked in upfront
Unlike a TRAC lease, a fair market value lease doesn't set an agreed residual at signing, which can mean a lower monthly payment with the tradeoff decided later.
You typically get a choice at lease-end
At the end of the term, a lessee usually can buy the truck at its actual market value, return it, or in some structures extend the lease.
Monthly payments can run lower than a TRAC or purchase loan
Because the lease isn't built around a guaranteed residual, the structure can sometimes produce a lower monthly payment than other lease types for the same truck.
Fair Market Value Lease: Everything You Need to Know
Reviewed by the TruckMars Editorial Team against FMCSA, IFTA Inc., EIA, and NMFTA source data. See our editorial standards →
A fair market value lease skips setting a residual value upfront. Instead, you get real options when the lease ends, buy the truck at whatever it's actually worth then, return it, or sometimes extend, which shifts the uncertainty to the end of the term instead of baking it into the payment.
How It Differs From a TRAC Lease
A TRAC lease locks in an estimated residual value at signing and settles the gap at the end. A fair market value lease skips that upfront estimate entirely, leaving the end-of-term value to be determined by the actual market when the time comes.
Your Options When the Term Ends
Most fair market value leases let you purchase the truck at its then-current market value, return it, or in some cases negotiate an extension. Which option makes sense depends heavily on freight conditions and truck values at that specific moment.
Comparing It to Buying Outright
A fair market value lease can mean lower payments during the term in exchange for not building guaranteed equity. Compare the full picture, not just the monthly payment, using the Lease-Purchase vs Ownership Calculator.
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