Residual Value

Residual value is the estimated worth of a vehicle at the end of a lease term, as predetermined at the lease’s start.

It is a critical factor in calculating lease payments: a higher residual value means lower depreciation cost and typically lower monthly payments. Canadian dealerships rely on residual value guides (often provided by manufacturers or lessors) to structure competitive lease deals, ensuring the residual reflects realistic future market value to avoid losses when the vehicle is returned.