Residual Value

Residual value is the estimated worth of an asset, such as a vehicle or equipment, at the end of a lease or financing term. It represents how much the asset will still be worth after being used for a set period, reflecting depreciation over time. This value helps determine lease payments or financing options, as it indicates the expected remaining value that the owner or leasing company can recover or sell later. Essentially, residual value is a forecast of an asset's future worth, based on factors like age, usage, and market conditions.