Glossary of Lease Terms

Lessee
Designates the person or the company who leases the vehicle; also referred to as the Hirer.

Lessor
Designates the Leasing Company

Full Maintenance Lease
A Lease where the Lessor assumes responsibility for service and maintenance of the vehicle for a specified fee.

Non-Maintenance Lease
Where the Lessee/Hirer assumes responsibility to service and maintain the vehicle in accordance with the vehicle manufacturers specifications.

Closed End Lease
A lease where the Lessee/Hirer is not responsible for market valuation of the vehicle upon completion of the lease term other than being accountable for damage that is in excess or normal wear and tear, as well as excess kilometers incurred.

Net or Open End Lease
A Lease where the Lessee assumes responsibility for the depreciated contract value of the vehicle upon completion of the lease term.

Consumer or Retail Lease
This type of lease is most often associated with lease programs originating and regulated by Automobile Manufacturers through their Dealer Networks and certain Financial Institutions.

Option to Purchase
Applies to certain leases where there is an agreed upon purchase price the Lessee/Hirer may exercise upon completion of the lease term.

In-House Lease
A lease provided by the Dealer or Independent Lease Company that is not structured or regulated by a Vehicle Manufacturer or secondary financial institution.

Agreed Value
The price of the vehicle negotiated between the Lessor and the Lessee upon which the lease is calculated.

Residual Value
Applies to Open End and or Net leases.  The predetermined value (amount owing) of the vehicle as calculated in the Lease Agreement.

Depreciation Schedule
Applies to Open End and or Net leases.  That portion of the monthly lease payment which is applied to reduce the original agreed value of the vehicle thereby resulting in the residual value.