The residual value of a leased vehicle is the estimated value of the car at the end of the lease term. It is the amount youll pay to purchase the vehicle at the conclusion of its lease term. The residual value is a predetermined figure that leasing companies and dealerships calculate before you sign the lease contract. A higher residual value means the company expects the car to hold its value well and undergo less depreciation over the lease term, which can result in lower monthly lease payments. The residual value is based on several factors, including the cars reliability, past vehicle models, and consumer trends. The residual value percentage rate represents the amount the lessor expects the vehicle to be worth at the end of the lease, and most vehicles are about 50 to 60 percent of their original MSRPs at the end of the lease term. The residual value is necessary for calculating depreciation and amortization, and it affects your monthly payment. If you decide to buy your leased car, the price is the residual value plus any fees.