Two types of car leases – Open and Closed:
Automobile leases come in two varieties: closed-end and open-end. There’s a difference between the two types and you should understand that difference.
In a Closed-End Lease, you make a set number of lease payments during the the term of your lease and return the vehicle to us at the end of the lease term. You are not required to make any additional payments unless there is physical damage to the vehicle such as Excess Wear and Tear, or the number of kilometers you have driven is higher than the kilometer limit set out in the lease. At the end of the lease, your options are:
- return the vehicle
- buy the vehicle
- extend your original lease
- lease a new vehicle
In an Open-End Lease you can drive unlimited kilometers as there are no over mileage costs. However, you, as the lessee, are responsible for the Guaranteed Residual Value of the vehicle as outlined in the lease contract. On disposal, if it is worth more, the excess will be returned to you. If it is worth less, or sold for less, then you will be responsible for any shortfall.