© WG & Associates 2014 Made with Xara LEASING TERMINOLOGY Open-end Lease Refers to a lease where at the end of the term the customer can purchase the vehicle for the pre-determined Residual Value. If the customer chooses not to buy the car, the leasing company will sell the vehicle with any gain or loss from the stated Residual Value charged to or paid back to the customer. Closed-End Lease Refers to a lease where the customer is obliged to return the vehicle to the leasing company at the end of the term in the same physical condition (minus normal wear and tear) as when it was received and within the kilometre restriction called for in the lease. This type of lease removes any responsibility the customer has for any deficit should the vehicle be worth less than the Residual Value. Lease Term This refers to the length of time, expressed in months, from when the vehicle is delivered to the customer until the Termination Date (the date the vehicle is to be returned to the lessor, or bought out). Lease terms typically range from 24 months to 60 months. Residual Value (Buy Out) This is the estimated future value of your vehicle at the end of the lease term. With an open-end lease you can buy the car for this amount at the end of the term. In a closed end lease, you may purchase the vehicle or return the car to the lessor. Excess Kilometer Charge (Mileage or Distance Restriction) The additional cost for exceeding the agreed to amount of kilometers during the lease term. This charge is included because the leasing company takes into account your estimate of the kilometers you will drive to set the Residual Value of the lease. In open-end leases the charge will be waived if the car is purchased by the customer. back