Open-end Lease

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What is an open-end lease?

Open-end Lease

An open-end lease is one in which the amount you owe at lease termination (assuming you are not terminating early) is based on the difference between the residual value of the leased car and its realized value. While this might sound like a great deal, the reality is that this lease type is geared more to business leasing and should be avoided by consumers.

If you end up with an open-end lease and the realized value is higher than expected, the consumer may receive a refund of any excess if the realized value is greater than the residual value (FYI, the residual value is considered unreasonable if it exceeds the realized value by more than three times the base monthly payment). This rule assumes that you have met the mileage and wear stipulations of the lease.

*If you believe the residual value is unreasonable at the end of the lease, you can refuse to pay, but you may have to deal with the dealership in court should it decide to pursue the matter further.



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