What is the residual value? Can the residual value be left at the end of the payment?

Definition of residual value

The residual value is a term associated with leasing operations and represents the value at which, at the moment of the lease contract expiration, after the last installment payment, the transfer of ownership rights over the asset is made to the user. ☝

When is the residual value paid?

The amount representing the residual value can be paid at the end of the leasing period. 📑

How is the residual value calculated?

The residual value does not represent an additional cost, but a part of the price of the good, usually expressed in percentages. The size of the residual value inversely influences the value of the monthly installments: for example, a high residual value is associated with reduced leasing rates. 📉

Usually, in the case of natural persons, contracts allow the choice of a higher residual value, so that the monthly leasing rate is reduced, while, in the case of legal entities, things are the opposite.

Can the residual value be 0%?

In the case of financial leasing offered by BT Leasing the residual value cannot be less than 1%. At the end of the leasing period, by paying the invoice for the residual value the asset will pass into the ownership of the user and thus the respective invoice cannot have a value of 0. ✅