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Simply put, the residual value or salvageable value in a lease contract is the anticipated value of the vehicle at the end of the lease period, and lessors use it to set your monthly lease payments.
The residual value derives its calculation from a base price, calculated after depreciation. Residual values are calculated using a number of factors, generally a vehicles market value for the term and mileage required is the start point for the calculation, followed by seasonality, monthly adjustment, lifecycle, and disposal performance.
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Closed-end leases are so called because they run for a fixed term, and the lessor and lessee agree in the lease contract what the residual value of the property being leased will be. In most cases (particularly in retail motor vehicle leases), the lessee has an option to purchase the property for the agreed residual value at the end of the ...
Vehicle leasing is the leasing (or the use) of a motor vehicle for a fixed period of time at an agreed amount of money for the lease. It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a method of acquiring (or having the use of) vehicles for business, without the usually needed cash outlay.
Even if you paid the sales tax on your monthly lease payments, you'll still have to pay tax on the vehicle's residual value. A few states charge sales tax on the car's full purchase price at the ...