The word “fair” is often asked to do heavy lifting.
On hearing it, we expect transparency, honesty, and certainty.
And yet, the term Fair Market Value (FMV) can create uncertainty, making it misleading for businesses exploring their tech leasing options.
Many lease providers give businesses the option to buy their devices at the end of a lease period based on the equipment’s FMV at that moment.
On the surface, this sounds reasonable.
In reality, you don’t know what the FMV of the device will be three years from now – and neither does the lease provider.
Lease Loop adopts a different approach.
If you’re minded to keep the equipment – which 93% of our customers do – we believe you should know the full cost at the outset.
What is Fair Market Value (FMV)?
When a device leasing term comes to an end, the customer often has the option to buy the assets for what they’re worth on the open market at that time.
This is known as fair market value.
How is Fair Market Value (FMV) calculated?
FMV is calculated according to what the devices would sell for in an open market place to any willing buyer at the end of the lease.
A device’s fair market value can be significantly impacted by:
- Supply and demand – Greater demand can impact device resale value
- Component availability – Component shortages, such as the lack of SSDs, can influence prices
- Age and condition – Wear and tear and overall poor condition can drive the price down
- New technology releases – With new releases, older devices can become obsolete technology
- Appraisal methods – Various device valuation approaches can be used to assess an asset’s value
These factors are exactly why businesses entering a multi-year device lease need to pay close attention to their end-of-term options.
Why is FMV unknown at the start of a lease?
Crucially, FMV is based around what that device is worth at the end of the lease – rather than what it’s worth today.
Given device leasing periods typically last anywhere between one and five years, it’s practically impossible to predict what market conditions will look like by the end of a lease term.
Between new models being released, major economic changes, and shifts in consumer demand, nobody entering a lease today can tell you exactly what it’ll be worth several years down the line.
It’s this unpredictability that has a knock-on effect on business planning, because how you can prepare your business to buy the devices if you don’t know how much it’ll cost?
What does the data say?
Exactly how fair is FMV?
Well, the below table outlines several models released in 2023, their original prices, and what they are worth in the second-hand market today.
| Device Model | Original retail market value (including VAT) | Age | Current used-market value (including VAT)* | % of original price |
| 15-inch MacBook Air: Apple M2 chip with 8-core CPU and 10-core GPU, 512GB – Midnight | £1399.00 | 3 years | £829 | 60% |
| 16-inch MacBook Pro: Apple M3 Pro chip with 12‑core CPU and 18‑core GPU, 512GB SSD – Space Grey | £2699.00 | 3 years | £2099 | 78% |
| 24-inch iMac with Retina 4.5K display: Apple M3 chip with 8‑core CPU and 10‑core GPU, 256GB – Silver | £1599.00 | 3 years | £936 | 59% |
| Mac Studio: Apple M2 Max chip with 12‑core CPU, 30‑core GPU, 512GB SSD | £2099.00 | 3 years | £2008 | 96% |
*NB. These figures are based on current BlackMarket pricing and are based on machines that are either in excellent or good condition. They are accurate at the time of writing (October 2026). Prices can change over time and may vary according to device condition and specification.
Seeing a pattern in these Apple device depreciation rates? They don’t depreciate anywhere near as much as PC would do.
So, whilst the approach to determine FMV is fair, the price it arrives at feels anything but.
Could you imagine leasing a M2 Max Mac Studio for 3 years and then being told you need to find in excess of 95% of the original RRP to keep it? That doesn’t seem fair at all.
What happens if a business wants to keep its devices?
Keen to keep your devices?
This is common scenario – especially with high-performance technology like MacBooks that are still functioning brilliantly after a couple of years.
Businesses are often reluctant to send these devices back. That means many business that have entered into a device leasing arrangement with the end-of-term option to buy the devices for FMV, have just two options:
- Pay the calculated FMV
- Extend the lease
Both options, however, can present financial challenges.
The first might be unaffordable in the short-term, particularly for business with cash flow concerns, while the second can be more expensive in the long run.
What happens if the FMV is unaffordable?
As the table above highlights, it’s not uncommon for FMV to be unaffordable or impractical for businesses.
Over the device leasing period, almost anything and everything can change – from the business’ cash flow and credit position to their overall circumstances.
This leaves some businesses stuck.
Unable to afford to pay elevated fair market value prices due to a lack of cash flow but equally unable to return the equipment due to their credit position, often, their only option is to extend the lease into a rolling contract.
In essence, they end up continuing to pay for older technology.
This is where the total cost of the device lease starts to outweigh the initial lower monthly payments.
Case study: When fair market value goes wrong
We’ve seen the tangible, real-world impact this can have on businesses.
One customer who entered into a fair market value arrangement expecting to be able to retain their devices at the end of the lease term were left with a sour taste when they discovered the FMV was significantly higher than they had anticipated.
With no cash flow available to buy the equipment outright, their only alternative – without causing more disruption to the business – was to continue paying for old equipment on a rolling monthly contract.
This meant they’d paid almost twice over for the same equipment.
But what if they had known the cost of keeping their devices from day one? That’s where the Lease Loop solution can help.
Are there circumstances in which ‘Fair Market Value’ is a good thing for businesses?
Yes, for the 7% of customers who genuinely intend to return the devices at the end of the lease, fair market value’ can make sense.
This type of leasing can also a good model for bigger businesses that have the structure and resources in place to hand back devices without disruption.
However, if your business and objectives don’t fit into these criteria, you’ll want to hear more about Lease Loop’s anti-FMV position.
Lease Loop’s anti-fair market value position
We believe the issue with fair market value lies in the lack of honesty, communication, transparency, and certainty for smaller businesses.
That’s why we created Flexscription.
This solution provides customers upfront with four fully-costed, transparent end-of-lease options.
These are binding, appear in every customer quote, and are included in lease documents, offering complete cost certainty so customers know exactly where they are.
The four choices:
- Return the equipment
- Enter a rolling monthly contract
We would only recommend this in situations like: Apple is about to release a new model in the coming months, and you want to take advantage.
- Extend the lease for 12 or 24 months
Alternatively, you can choose to extend the lease at a reduced rate for another 12 or 24 months, then retain the devices at the end of this secondary leasing period for no extra fee.
- Pay a one-off final payment
Clearly defined at quote stage, this option allows you to retain full use of the equipment. No nasty surprises, or inflated Fair Market Value.
Don’t hesitate to give our helpful team a call today on 01952 876928.
Alternatively, you can also get in touch via:
Email: sales@leaseloop.co
Online: contact form