ABA Family Legal Guide

Automobiles

Buying, Renting, and Leasing a Car

Car Leasing and Renting

What is an "open-end" car lease?

An open-end lease involves lower payments. However, you gamble that the car will be worth a stated price, the estimated residual value, at the end of the lease. If the car's appraised value at the end of the term equals or exceeds the specified residual value, you owe nothing. You may receive a refund of any excess value, if your contract provides for a refund. The downside: If the car is worth less at the end of the term, you pay some or all of the difference, often called an end-of-lease payment.