A contract between a consumer and an auto dealer or financial institution that allows the consumer to drive a vehicle for a set time — usually 24, 36 or 48 months — in return for payments that cover the vehicle’s depreciation during that time, plus interest, taxes and other fees. Depreciation, which is the main factor in the determining the cost of a lease, is the difference between the vehicle’s established value at the start of the lease and its estimated lease-end value, called the residual value. The agreed-on price for the leased vehicle at the start is referred to as the capitalized cost, or cap cost, and ideally is much less than the sticker price (Manufacturer’s Suggested Retail Price). Down payments can also reduce the amount of the cap cost and thus the monthly payment. And the higher the residual value, the lower the monthly payment. There are closed-end and open-end leases. At the end of a closed-end lease, the borrower can buy the car or return it and walk away (after paying any excessive damage or mileage charges). Open-end leases require the lessee to pay any difference between the estimated lease-end value and the actual market value at the end of the lease.