auto

What is an open-end lease?

 

What is an open-end lease?

The Bankrate.com financial term of the day is: "open-end lease."

An open-end lease, sometimes called a finance lease, is a bet that can pay off in a lower expense when you lease a car. Your monthly payments are reduced, but there's a risk that you'll have to come up with more money when the lease runs out and it's time to turn in the car. With your payments, you're wagering that the company leasing the vehicle to you will be able to get X amount of money for it when you're done with it. But if an appraisal comes up with a lower value at the end of the lease, you'll have to make up the difference.

With an open-end lease, you roll the dice on a lower monthly payment for a new vehicle. Your gamble can pay off -- or backfire.

For all you need to get yourself rolling in a new set of wheels, visit the Auto section at Bankrate.com.

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