Open-end Lease Definition

A lease that requires the lessee to purchase the leased asset at the conclusion of the lease period is called an open-end lease. Open-end leases are fairly common with automobile leases. The lessee leases and uses the automobile during a certain period and then must purchase the automobile for a prearranged price, usually derived from expected market value, at the conclusion of the lease period. If the automobile’s actual market value varies from the prearranged amount, the lessee either enjoys a good purchase price or must deal with an unfavorable purchase price.