Car Leasing Secrets: Residual Values

The one of many car leasing secrets that you should come to understand is the importance of knowing lease-end residual values. These are used in calculating the monthly payments and are based on the difference of the residual value and the selling price of a leased car. To put it quite simply, the lease cost is much lower if the residual value is higher.

A residual value in all actuality is a percentage of the Manufacturers Suggested Retail Price (MSRP). These values reflect depreciation of vehicle values and are estimated based on all sorts of factors. These include the length of a lease, average mileage per year, the type of car and model, resale history, etc. It's a value that represents a guesstimate based on all the data that is collected on a car lease. Know the residual value of your car and you should have no trouble making your own calculations. This is one of the car leasing secrets you can stand to use in any showroom the next time you go out shopping.