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An open-end lease is a type of rental agreement that obliges the lessee (the person making periodic lease payments) to make a balloon payment at the end of the lease agreement amounting to the difference between the residual and fair market value of the asset. Open-end leases are also called “finance leases.”
Very simply, in an open-end lease the lessee assumes the depreciation risk but has more flexible terms. In a closed-end lease, the lessor assumes the depreciation risk, but the terms are more restrictive.
An open-end lease is a type of rental agreement that obliges the lessee (the person making periodic lease payments) to make a balloon payment at the end of the lease agreement amounting to the difference between the residual and fair market value of the asset.
What is Closed-End Lease. A closed-end lease is a rental agreement that puts no obligation on the lessee (the person making periodic lease payments) to purchase the leased asset at the end of the agreement. Also called a “true lease,” “walkaway lease,” or “net lease.”
Also called a closed-end lease, a walk-away lease is usually a kind of car lease that allows the lessee to return the car at the end of a lease period.
The open-end lease is more often used by businesses and for commercial use. Open-end leases may also be called: Operating lease. Capital lease.
What is Closed-End Lease. A closed-end lease is a rental agreement that puts no obligation on the lessee (the person making periodic lease payments) to purchase the leased asset at the end of the agreement. Also called a “true lease,” “walkaway lease,” or “net lease.”
An open-end lease is a type of rental agreement that obliges the lessee (the person making periodic lease payments) to make a balloon payment at the end of the lease agreement amounting to the difference between the residual and fair market value of the asset. Open-end leases are also called “finance leases.”
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