The following table shows the probability that the fair-market-value (FMV) purchase-option price will be greater than the residual value and the additional cost to you of purchasing the vehicle at lease-end compared with purchasing it initially. The probability and potential additional cost for the FMV purchase option is shown for 2 leases having different residual values.

		Loan	Lease A	Lease B
A	Purchase price (loan) or gross capitalized cost (lease)	$22,000	$22,000	$22,000
B	Residual value	n.a.	$11,500	$13,000
C	Depreciation paid over the term (A – B)	n.a.	$10,500	$9,000
D	Probability that guidebook purchase-option price will exceed residual value*	n.a.	75%*	25%*
E	Additional cost if guidebook value exceeds residual value*	n.a.	$1,000*	$500*
F	Potential added cost from lease purchase (D × E)	0	$750	$125

* Hypothetical value
n.a. Not applicable

To evaluate a lease fully, you should also consider the potential purchase savings and the potential added purchase costs shown above. A similar table could be developed showing the probability that the purchase price would be less than the residual value compared with purchasing the vehicle initially.