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Lease with Residual Value 2026
What is residual value in a lease?
Residual value (also called a balloon payment) is the portion of the car's value that you defer to the end of the contract. Instead of paying the full price of the car through monthly instalments, the bank sets a certain percentage (usually 15–40% of the car's price) that you pay only when the lease contract ends. As a result, the monthly payment can be €100–200 lower than with a standard lease.
Residual-value lease vs financial lease
The main difference is what you pay each month. With a financial lease you pay the full price of the car in instalments (the car becomes yours automatically). With a lease with residual value you pay only part of the price, and at the end of the contract you have three options: buy out the car by paying the residual amount, return the car to the bank, or refinance the residual value with a new contract. In 2026, the average residual value in Lithuania ranges from 20% (4–5 year contracts) to 35% (2–3 year contracts).
Who is a lease with residual value suitable for?
- Those who want a lower monthly payment and are able to pay a larger sum at the end of the contract
- Business clients who change cars every 3–4 years and want to optimise cash flow
- Buyers planning to sell or return the car at the end of the contract (when the market value exceeds the residual)
- Those who want a newer or more expensive model than they could afford with a standard lease
Which banks offer leasing with residual value in 2026?
In Lithuania, leasing with residual value is offered by SEB (operating lease with residual), Swedbank (Auto lease with residual value), Citadele and Inbank. Interest rates range from 3.5% to 6.5%, depending on the age of the car, the size of the down payment and the length of the contract. Business clients are often offered more favourable terms – interest from 3.2%.
→ Read the full guide: comparison of 6 banks, BMW/Audi examples, common mistakes
Leasing with Residual Value 2026
Comprehensive information about leasing with residual value: what it is, how it works, advantages and disadvantages. Learn how residual value reduces monthly payments and when it's worth choosing.
Residual value is a pre-agreed amount you pay at the end of the leasing contract if you want to become the car owner. It's the projected value of the car at contract end.
For example, if a car costs EUR 25,000 and you set 30% residual value, at contract end you'll need to pay EUR 7,500 for the car to become your property. Until then, you only pay for the depreciation portion.
Residual value is the main feature of leasing that distinguishes it from a regular loan. It allows you to reduce monthly payments because you finance not the full car price, but only the difference between initial and residual value.
Choose car price
Set the car price and down payment (usually 10-30%).
Set residual value
Choose what portion of the price will remain unpaid until contract end (0-50%).
Pay monthly installments
Throughout the leasing term, you pay only for the financed amount (price - down payment - residual).
Make decision at end
You can: 1) buy out by paying residual value, 2) return the car, 3) extend or exchange.
Let's see how residual value affects monthly payment under the same conditions:
With 30% residual value
- Car price:25 000 €
- Down payment:2 500 € (10%)
- Residual value:7 500 € (30%)
- Financed amount:15 000 €
- Lease term:48 mėn.
- Monthly payment:~350 €
Without residual value (0%)
- Car price:25 000 €
- Down payment:2 500 € (10%)
- Residual value:0 €
- Financed amount:22 500 €
- Lease term:48 mėn.
- Monthly payment:~520 €
Difference: ~EUR 170/month lower payment with residual value!
• Significantly lower monthly payments (up to 30-40% lower)
• Ability to acquire a more expensive/newer car for the same budget
• Flexibility at contract end - buy out, return, or exchange
• Lower financial burden each month
• Suitable for those planning to change cars every 3-5 years
• At contract end, you'll need to pay residual value (if you want to buy out)
• Total amount paid may be higher than without residual value
• If car market value drops below residual - you may lose money
• Exceeding mileage may reduce car value below residual
• Car must be in good condition when returning to leasing company
Optimal residual value depends on your goals, car type, and leasing term. Here are indicative recommendations:
Conservative - safe option, car will definitely be worth more
Most popular - good balance between lower payments and residual risk
Aggressive - lowest payments, but higher risk at end
Premium class and electric cars usually retain value better, so higher residual value can be chosen. For popular brand used cars - safer to choose 20-30%.
Frequently asked questions
Everything you need to know about residual value in leasing
No, you don't have to. At contract end you have three options: 1) buy out by paying residual value, 2) return the car to the leasing company, 3) extend the contract or exchange for another car. The choice is yours.
If car market value drops below residual, you have two options: 1) buy out at agreed residual value (paying more than car is worth), 2) return the car - some companies may apply additional fees if car doesn't maintain expected value.
Residual value is usually proposed by the leasing company based on car make, model, expected depreciation, and term. You can negotiate - higher residual = lower payments, lower residual = higher payments, but safer.
Yes, residual value applies to both business and private leasing. For business leasing, residual value has tax implications - consult with an accountant about the optimal option.
For 3-year (36 month) term, 30-40% residual value is usually recommended, depending on the car. Premium cars can maintain 40-50%, while cheaper class cars - better to choose 25-35%.
Usually residual value is set at contract signing and cannot be changed. Some companies allow refinancing the contract with new terms, but this rarely pays off.
Exceeding mileage reduces car value. If you return the car, additional fees may apply (usually EUR 0.05-0.15/km). If you buy out - exceeded mileage doesn't matter, but car is worth less.
No, interest is calculated only on the financed amount (price - down payment - residual). Therefore, with higher residual value, you pay less interest over the entire term, even though the percentage rate is the same.