There are two basic types of automobile leases: open- and closed-end (the most popular). Although there are variations, this is how the two compare: Closed-End Lease

In a closed-end lease, the consumer pays a predetermined monthly payment (usually higher than the rate charged on open-end leases) over the term of the contract. Beyond the monthly payments, says Gary Gold, area leasing manager, "The only other item the lessee generally can be charged for is mileage over the amount contracted for."

Closed-end contracts contain a miles-per-year ceiling; the exceeded mileage is charged at a specific rate, ranging from about 4 cents to 10 cents per mile.

"The closed-end lease seems to protect the consumer more than the leasing company," says Gold. "More leasing companies are encouraging the closed-end leases, but not because of a need to protect the lessee. Rather it is because the leasing firms strongly feel that the vehicle at lease-end represents a very strong profit potential (as a potential used-car sale)." Open-End Lease

An expected "end" or "residual" value--on which monthly payments are partially determined--is put on the car at the time it is leased. (Generally, the lower the residual value, the higher the monthly payments.)

At the end of the lease term, the car is appraised to set its actual wholesale value. If the appraised value is at least equal to the residual value stated in the contract, the lessee is free of further obligation.

Should the appraised value be less than the residual valuation, the lessee can be--if the car was leased for business use--responsible for the entire difference.

If leased for personal use, the consumer can be held liable for an amount equivalent to three additional monthly payments.

"The open-end lease," claims Gold, "gives the greater advantage to the lessor."