Your liability under most open-end leases may be affected by the amount of wear to the vehicle. If you return the vehicle, excessive wear-and-tear charges may be assessed only to the extent that the deficiency between the actual vehicle value and the residual value is greater than the sum of three base monthly payments. The three-payment rule may limit the lessor's ability to collect residual deficiency charges without bringing legal action. See glossary entry Open-end lease for information on the three-payment rule.

Excessive wear and tear is wear that exceeds the standards stated in your lease agreement. Many leases state wear-and-tear standards in specific terms. Any standards must be reasonable. Just like excess mileage, excess wear and tear usually decreases the value of the vehicle, whether it is leased or purchased.

The residual value in your lease assumes that your vehicle is returned in a certain condition. You should be aware of the lessor's wear-and-tear standards and follow them if you want to return the vehicle at scheduled lease termination without paying an excessive wear charge. Examples of excessive wear and tear include

• Broken or missing parts
• Dented or damaged body panels or trim
• Cuts, tears, burns, or permanent stains in the fabric or carpet
• Excessively worn tires (often 1/8" tread at the shallowest point)
• Cracked or broken glass
• Poor-quality repairs or repairs that do not meet the lessors standards.

Most lessors require the vehicle to be maintained according to the manufacturer's recommendations. This requirement does not mean that the vehicle has to be serviced by one of the manufacturer's franchise dealerships, although some lessors may require it. If you do not use the franchise dealership for service, you should be prepared to document that an auto service professional provided the service. You are responsible for any deficiency caused by failing to properly maintain the vehicle, subject to the three-payment rule. The three-payment rule may limit the lessor's ability to collect these charges without bringing legal action. See glossary entry Open-end lease for information on the three-payment rule. State law may limit the charges that the lessor assesses for returning the vehicle to the condition stated in your lease.