The residual value is their best guess as to what the car will be worth at the end of the lease. They base their projections on data from past models and a prediction of what consumer tastes will be.
Residual value (“residuals”), in car leasing, refers to the estimated — repeat, estimated — wholesale value of a leased vehicle at the end of the scheduled lease term. The longer the lease, the lower the residual value, as compared to the original MSRP sticker price.
At the end of your lease, the residual value is determined to be $10,000. During your lease, the car will lose 50% of its value. That 50%—in this case, $10,000 —will be spread out through your monthly lease payments.
A lease residual value is also known as lease-end value. Or, an estimate of what the leased car will be worth at the termination of the lease. It takes into account the original value of the vehicle as well how it is affected by depreciation.
The residual value is simply an estimate of the wholesale value of the car at the end of the lease term. Understanding where it comes from, and how it affects the price you will pay for a lease, is a bit more complicated.
(Residual value refers to the value of the vehicle at the end of the lease). Leasing a car is similar to renting a car on a long-term basis. Unlike renting a house or apartment, cars lose their value while you drive them, and so you need to pay the cost of this depreciation as part of your lease .
The residual value is what the leasing company believes the car will be worth at the end of your lease. It has a huge impact on your monthly payments and could also be important if you decide to purchase the car at the end of the lease.
A lower residual value means higher monthly payments. Example: A $15,000 residual value on a $25,000 car would mean your lease payments would have to cover the $10,000 difference.
What Is the Residual Value of Cars? In order to better understand what residual value means with cars, it is important to take a look at each word's definition. A residual is the part that is left after some has been taken away.
Standard Commercial Vehicle Lease Residuals - access the residual values for CULA's standard commercial lease which is a standard vehicle with a GVWR of less than 12,500 that is being leased to a business.
Related posts to lease residual value
The residual value of your vehicle is extremely important to your lease payments and buyout price. Know the facts on residual value before entering into a lease contract..
Here is the complete list of residual values on new car leases here in the USA .
The residual value is the estimated value of a fixed asset at the end of its lease or at the end of its useful life. The lessor uses residual value as one of its primary methods for determining .
When you lease a vehicle, you might hear the term residual value mentioned by the salesperson. What is residual value? And what effect does it have on your lease payment? The residual value is the .