Whats the difference between a closed-end and an open-end lease?
Closed-End Lease: At the beginning of the lease, the leasing company estimates the vehicle’s residual value at the end of the lease. If the vehicle is actually worth less than the residual when you turn it in, the leasing company is responsible for the loss, not you. On the other hand, if the vehicle is worth more than the residual value, if you have the option to purchase, you may want to buy the vehicle. It would be a great investment. Most consumer car leases are closed-end. Open-End Lease: You are responsible for paying any difference between the vehicles residual value and the actual market value at the end of the lease. If you drove many more miles than expected or the market value of the vehicle is lower than expected, you could owe a significant amount of money.
