Stated residual value

The stated residual value is usually the same as the end-of-lease purchase price. The higher the stated residual value of the car, the lower your monthly payments. Stated residual values are often higher or lower than the expected residual value for a car, the lessor can raise or lower the monthly payments and the net interest rate for the lease. Stated residual value also determines whether you should buy the vehicle at the end of the lease. If at the end of a lease, the vehicle's market value is less than the stated residual value, the lessee would be prudent not to purchase the car. On the other hand, if the actual market value were greater than the predetermined residual, then the lessee could buy the car, sell it, and pocket the difference.