Residual value — the number that decides what the car costs you
Residual value is what a car is expected to be worth at the end of a defined period; it drives leasing rates and is usually the largest single cost of ownership.
For anyone leasing, this figure sets the monthly payment more directly than the list price does, because the payment covers the gap between the two. For anyone buying, the same gap is paid at the end instead of monthly. Either way it is generally larger than fuel, insurance and servicing combined.
Why it matters when buying
New brands are structurally penalised here. Residual forecasts are produced by specialist firms from historical data, and a badge with no history is priced conservatively — which becomes self-fulfilling when it makes the lease expensive and the volumes small. Chinese brands entering Europe have carried this handicap, and it has narrowed as data accumulated rather than as a result of anything they did.
Three factors move it more than the badge. Battery health, which is why a documented state of health reading is worth obtaining and keeping. The local service network, because a car nobody nearby can service is worth less than a car anyone can. And discounting on new cars, since heavy incentives on the current model reprice every used one behind it overnight.
A discount that looks like a saving on the day of purchase can therefore cost more than it saved by the time the car is sold. This is the least visible cost in the whole transaction and the one buyers most reliably ignore.
Related: degradation · battery warranty · official importer
Updated Aug 21, 2026