A closed-end lease is a lease that doesn’t require the consumer to buy the vehicle at lease end or to pay any difference between the residual value and market value.
Closed-end leases, which are the most common type, usually allow lessees to buy the car if they so desire. To do so, the lessee may have to pay off the residual value, the market value or whichever is higher when the lease ends, depending on the contract. Though the buying price in the lease contract is supposed to be fixed, in some cases the leasing company will negotiate a lower price.
Information for this was taken from the Cars.com’s glossary, written by Joe Wiesenfelder.
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