Closed-end vs open-end structure, standard terms, and how residual values actually get set.
Nearly all consumer auto leases are closed-end: the residual value is fixed in advance, and you walk away at term end owing nothing extra for depreciation (only for excess mileage or wear). Open-end leases — common in commercial fleet leasing — leave you responsible for the gap if the asset's actual market value comes in below the projected residual, which is why they're rare for individual consumers.
Most consumer auto leases run 24, 36, or 39 months. Mileage allowances are commonly offered in tiers of 10,000, 12,000, or 15,000 miles per year — a lower tier lowers the monthly payment by projecting a higher residual value, so picking a tier below your real driving pattern just shifts the cost to an excess-mileage bill at the end instead.
Residuals are set by the leasing company (often the automaker's captive finance arm) using third-party depreciation guides — the Automotive Lease Guide (ALG) is the industry-standard source most captives reference, alongside Black Book data. This is not something you negotiate directly; it's set before you ever see the offer.