With a lower residual valuation you “own more” of the vehicle at the end of the lease.
but then you would pay more for a lease. if you have a car you like with low residuals buy it used as the person before you who was leasing it would have done most of the dirty work on the lease.
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A low residual also means a higher lease payment. It’s a balancing act.
The ideal situation would be a high residual with a low lease payment. Then when the lease is up, negotiate the buyout to whatever market rate is. Worst case scenario, if you loved the car, just find another used CPO one and pay less to buy that one. You’ll get a car that’s been cleaned up with an extended warranty for less.
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The bigger picture is that if you plan to buy the car at the end of the lease, you’d be better off buying it day one.
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+1. In theory, the best combination would be low residual and a ton of lease cash to offset the low residual, resulting in low payment and low buyout.
It’s just a commodity, other than the hassle of switching vehicles, the one you buy thats a 3yr old off lease is no more or less likely to be higher quality than the one you leased. The real benefit of leasing is to try out the vehicle for 2-3 years to determine if its one you want long term (and do that on a heavily subsidized lease, preferably with a high residual), turn in your vehicle at end of lease, then buy another for 60 cents on the dollar because the manufacturer/leasing company mis-judged the market when they set residuals. I’m about to do that on a plug-in hybrid. Turned in awhile back. Residual was $20.5K, it sold at auction for $12.9K. I plan to buy someone’s lease turn in over the next few months - just trying to sort out which model…