Suppose that you are at the end of your automobile lease. The leasing company has just informed you that the car's market value is greater than its residual value and they will be sending you a refund. What type of lease did you have?

Question

Quizplus · Accepted Answer

This situation indicates an open-end lease. In an open-end lease, the lessee is responsible for covering the difference between the car's residual value and its market value at the end of the lease term. If the car's value is higher than the estimated residual value, the lessee may receive a refund. Closed-end leases have a predetermined residual value that the lessee pays for regardless of the vehicle's market value at the end of the lease. A walk-away lease is another term for a closed-end lease. There is no such thing as a residual lease.

Suppose That You Are at the End of Your Automobile