Walk-Away Lease
Categories: Real Estate
When you get a new car, you have two basic options: buy or lease. If you buy the car, once you pay the sticker price and all the add-ons and taxes, the car is yours. You keep it as long as you want it (or as long as you can keep it running, whichever comes first).
A lease acts more like a long-term rental. Once the lease reaches its end, the car dealer still owns the vehicle. If you have a walk-away lease, your obligations are over. You return the car to the dealership and (presumably) buy or lease something else. You don't owe any additional money on the car. The lease is done. You can walk away.
Another option is called an "open-end lease." It involves a balloon payment at the end of the leasing period. You can't just walk away. The payment here is based on the expected residual value of the car (how much the dealer can get for it when they resell it).