A lease agreement that provides for an additional payment at the expiration of the lease to adjust for any change in the value of the property.
An open-end lease is where a person may owe a balloon payment at the end of the lease depending on the condition of the property once it is turned back in.
A lease involving an additional payment, the amount of which will depend on the value of the vehicle when it is returned Also called a finance lease.
A lease structure in which the lessee guarantees the residual value of the vehicle at scheduled lease term. This is the opposite of a Closed End Lease and is typically utilized by businesses and not individuals due to potential financial liability.
(See also Closed -End Lease) A lease which includes a provision for extending payments under the lease on predetermined terms after a set period of time.
Agreement in which the amount owed at end of lease is based on the difference between the residual value of the leased property and its realized value. Also called a Finance Lease or a Participating Lease.
A lease that holds a lessee responsible for any difference between a car's residual value and its market value at the end of a lease. If, at the end of the lease, the car is worth less than the lease's residual value, the lessee must pay the difference. On the other hand, if the car is worth more, then the lessee should receive credit. An open-end lease also gives a lessee the option of purchasing the car at lease-end. This type of lease is generally more flexible than the Close-end Lease, but may cost more.
Type of lease where the buyer must pay the difference between the market value of the car and the residual value at the conclusion of the lease.
A conditional sale lease in which the lessee guarantees that the lessor will realize a minimum value from the sale of the asset at the end of the lease.
A type of lease that offers lowers payments, but more risk to the lessee because he or she must pay the difference between the residual value of the automobile as stated in the lease and the fair market value, if lower, at the end of the lease. The lessor pays for the appraisal that determines the automobile's the value. If the lessee does not agree with the value, he or she can pay for an independent appraisal by an impartial third party. All parties must agree to the selected appraiser. Also know as a finance lease.
A lease agreement in which the amount you owe at the end of the lease term is based on the difference between the residual value of the leased property and its realized value. Your lease agreement may provide for a refund of any excess if the realized value is greater than the residual value. In an open-end consumer lease, assuming you have met the mileage and wear standards, the residual value is considered unreasonable if it exceeds the realized value by more than three times the base monthly payment (sometimes called the "three-payment rule"). If you believe the amount owed at the end of the lease term is unreasonable and refuse to pay, the lessor may attempt to prove that the residual value was reasonable when it was set at the beginning of the lease. However, if you cannot reach a settlement with the lessor, you cannot be forced to pay the excess amount unless the lessor brings a successful court action and pays your reasonable attorney's fees.
A lease in which the lessee guarantees the amount of the future residual value to be realized by the lessor at the end of the lease. If the equipment is sold for less than the guaranteed value, the lessee must pay the amount of any deficiency to the lessor. This lease is referred to as open-end because the lessee does not know its actual cost until the equipment is sold at the end of the lease term.
A lease that requires a balloon payment based on the value of the leased property when the lease expires.
A type of lease in which the lessee is responsible for the difference between the residual value and the realized value at the end of the lease. The lessee may be entitled to a refund if the realized value is greater than the residual balance.
This is a lease in which the lessee's liability at the end of the lease term is based on the difference between the residual value of the leased vehicle and its realized value (the amount for which the car can be sold). This type of lease is not usually used for consumer leasing. It is used mostly by businesses when leasing a large number of vehicles at one time.
A lease where the consumer is liable for a shortfall between the vehicle's projected value (at lease inception) and its actual value (at lease end). (See Closed-End Lease.)
A lease that requires the consumer to pay the difference between the vehicle’s residual value and its actual value when the lease ends Read more
Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.
A lease term that requires the lessee to pay the difference between residual value and fair market value at the end of the lease term if the fair market value is lower.
A lease which may involve a balloon payment based on the value of the property when it is returned.
A lease that usually offers lower monthly payments, but specifies a value for the vehicle at the end of the lease term and requires the customer to make up the difference.
A lease that may involve a balloon payment based on the value of the property when it is surrendered.
Leases in which the lessee's financial obligation may exceed the negotiated monthly lease payment. In an open-end lease the residual value is set at the beginning of the lease term. The lessee is financially responsible if the actual value of the vehicle is less than the stated residual value.
A lease which requires the lessee to make up any shortfall between the actual value of the vehicle at lease end and the projected residual value stated in the lease. If the vehicle is worth less than the lease's residual value, the lessee must pay the difference. An open-end lease also gives a lessee the option of purchasing the vehicle at lease-end.
Another type of lease in which the lesee is responsible for the value of the car at the end of the lease. If the market price of the car is lower than the pre-determined residual, then the lessee has to pay the difference. If market value is higher, then you can buy the vehicle at the residual and re-sell it on the market. GAP may not be included. Residual/Option-to-Buy Price Percentage of the Leased Vehicle Amount or a set dollar value for how much the vehicle is worth at the end of the lease. The lessee has the option to purchase the vehicle at this specified price when the lease ends. One factor used the calculating the monthly payment of the lease.
a lease where no specific time limit is set for the vehicle to remain in service. In most cases, at the end of the lease, any gain or loss from the sale of the vehicle belongs to the lessee.
A lease contract providing for a final additional payment on the return of the property to the lessor, adjusted for any value change.
Also called a Finance or Equity Lease. The lessee is responsible for the difference between the agreed-upon residual value and the fair market value of the vehicle at the end of the lease, if the vehicle is worth less than anticipated. For example, if the vehicle has a market value of $8,000 at the end of the lease, and the residual value was set at $10,000, then the lessee owes the leasing company the difference of $2,000. The lessee has the right to an independent appraisal of the vehicle, at his or her own expense. The payments for an open-end lease are generally lower than those for a closed-end lease.
Also called a finance lease. Little used today, because consumers cannot be certain whether they will owe additional money at the end of the lease. In a closed-end lease, the leasing company sets the residual, or ending value, of the car upfront. But in an open-end lease, the residual value is the fair market value. If the car turns out to hold value well, the consumer has to fork over extra money to turn in the car.