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FINANCE

Residual Value

A leased car's projected value at lease end. Set by the leasing company; affects monthly payment.

// Why it matters

Residual value is the leasing company's prediction of what your car will be worth at lease end (e.g., 60% of MSRP after 36 months). Higher residual = lower monthly payment because you're paying for less depreciation. Residual values are set by the leasing company and not really negotiable, but you can shop different leasing companies for the same car — some have higher residuals than others.

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