Automobile leases come in two varieties: closed-end and open-end. Federal regulations require that the type of lease be clearly indicated on all lease contracts.

Closed-end leases, sometimes called "walk-away" leases, are most common for consumer leases today. This type of lease allows you to simply return your vehicle at the end of the lease and have no other responsibilities.

At the time you lease, the leasing company estimates the vehicle's lease-end residual value and, if the vehicle is actually worth less than the residual when you turn it in, the leasing company takes the hit, not you. On the other hand, if the vehicle is worth more than the residual, and you have the option to purchase, you may want to buy it, then sell it and make a profit. This happens frequently.

Open-end leases are used primarily for commercial business leasing. In this case you, not the leasing company, take all the risks. You are responsible for paying any difference between the estimated lease-end value and the actual market value at the end of the lease. This could amount to a significant sum of money if the market value of your vehicle has dropped.

Make sure you only agree to a closed-end consumer lease. Even though most non-business leases you'll encounter will be of this type, read your contract closely just to be certain.

Open-end leases seem to be more popular in Canada, although it's not clear why. Be sure to decide which you need, and check your contract before you sign.