The open end lease is similar to the closed-end lease, with the major difference being that the consumer leasing the car will be financially responsible for the difference in value if the residual value of the vehicle is less than the actual market value at the end of the lease. This is why before leasing a car its important to learn how to calculate lease payments, along with an understanding of end of lease charges by the leasing company. If the market value if worth less at the end of the lease agreement, you’ll be responsible to pay the difference.
Conversely, if the market value of the car is worth more than the residual value, you may get a refund. It’s a high risk considering vehicles are known for their depreciating value, but may be appealing to someone who drives a lot as the open end lease typically has no mileage restrictions.
Open end auto leases are a more common type of lease for businesses as their employees tend to drive a lot, and the risk is less as if the business requires paying any fees for the difference, the costs can be written-off on taxes.