How does the residual value plays into the monthly payment of a car lease?

surferdudehb

Is the residual value set by the leasing company? As I understand it's not negotiable correct? If so, what value does it have in term of the financing of the car?

kyfdx

surferdudehb said:

Is the residual value set by the leasing company? As I understand it's not negotiable correct? If so, what value does it have in term of the financing of the car?

The higher the residual, the less depreciation you have to pay for over the lease term, resulting in a lower payment.

All other things being equal, a higher residual gives you a lower payment.