Business and Personal Finance Dictionary

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• OPEN-END LEASE
  
  Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties. Because the lessee is taking on the risk of having to come up with this extra payment, the payments are lower than for a closed-end lease.
  
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