A dollar buyout copier lease lets you own the machine for a single dollar at the end of the term. The monthly costs more than an FMV lease, but you walk away with a paid off copier. Here is exactly how it works, what it really costs, and when it is the smart pick.
What a Dollar Buyout Lease Is
A dollar buyout lease, also called a $1 buyout or sometimes a $1 out, is a financing structure where you make monthly payments over a fixed term and the final option to buy is one dollar. The IRS and most accountants treat it as a purchase with financing, not a true lease. You list the copier as an asset on your books and depreciate it over time.
That asset treatment is the main reason small businesses pick it. You get to claim Section 179 in the year you sign, often writing off most of the cost in year one.
Real Monthly Cost on a Dollar Buyout
Because you are buying the machine on installments, the monthly is higher than an FMV lease. Typical 2026 ranges. A 35 ppm color copier on a $1 buyout, $135 to $265 a month over 60 months. Total cost over the term, $8,100 to $15,900. A 55 ppm office copier on a $1 buyout, $265 to $475 a month over 60 months. Total cost, $15,900 to $28,500. A 75 ppm high volume color copier on a $1 buyout, $475 to $945 a month over 60 months. Total cost, $28,500 to $56,700.
Those totals include the financing cost. The actual hardware retail price on a 55 ppm copier is around $9,000 to $14,000, so you are paying $6,000 to $14,500 in interest over five years. The cost feels high until you remember you own the machine free and clear at month 61.
How the Tax Side Works
Most small businesses on a $1 buyout claim Section 179 to write off the full hardware cost in the year they sign. Section 179 for 2026 lets you deduct up to $1,160,000 in equipment purchases, more than enough for a copier. That can mean a $3,500 to $6,000 tax savings in the first year on a typical office copier.
An FMV lease is treated as an operating expense. You deduct each month's payment as you go, no Section 179. Over five years the total deduction comes out close, but the timing is different. A $1 buyout front loads the tax benefit. Talk to your accountant before you pick.
What Most Guides Miss
The dollar buyout monthly often hides the interest rate. Dealers quote you a flat monthly without telling you what the implied annual percentage rate is. On a 55 ppm copier with a $12,000 hardware cost financed at $325 a month over 60 months, the implied APR is around 12 to 14 percent. That is well above what you would pay on a bank line of credit. If you have access to cheaper financing, you can save 4 to 8 percent of the total cost by paying cash and skipping the buyout structure. Always ask for the financing rate in writing before you sign. If the dealer will not put it on paper, that is a red flag.
When a Dollar Buyout Makes Sense
A $1 buyout fits if you plan to keep the copier for 7 to 10 years, want the Section 179 deduction up front, have steady cash flow that can handle a higher monthly, and want a clear paid off date on your books. A $1 buyout does not fit if you upgrade your copier every 3 years anyway, want the lowest possible monthly, or do not care about ownership.
Service and Toner Are Usually Separate
A $1 buyout covers the hardware financing only. Service, parts, and toner are usually a separate cost per page contract. Expect $0.008 to $0.015 a page for black and white, $0.04 to $0.09 a page for color. Read that contract as carefully as you read the lease. The service contract often costs more over five years than the hardware lease itself, especially on heavy color use.
Watch the Total Cost Over the Term
Run the math before you sign. Multiply the monthly by the number of months. Add the service contract cost based on your real volume. Compare that total to a quote on a $1 buyout from another dealer. Then compare it to an FMV lease quote on the same machine, plus the FMV at end of term. Pick the structure with the lowest all in cost for the way you actually use the copier.
For more on lease structure choices, read our Copier Lease vs Buy in 2026 guide and our copier lease pricing guide.
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