Can I set my residual lower than recommended?

This may be possible; however the Australia Taxation Office prescribes minimum and maximum amounts that the residual can be set at. These minimum and maximum amounts depend on the original purchase price of the vehicle so please see the table below on residual percentages.

Depending on the kilometres you travel per annum, in some cases travelling more than 30,000 kms per annum the residual can be set lower as agreed by the financier.

In order to minimise the chances of having to make up a shortfall, it may be beneficial to set the vehicle residual lower than the expected value at the end of the lease, rather than higher.

Residual amounts table:

Lease term
(in years)
Minimum residual

(% of vehicle value)

Maximum residual

(% of vehicle value)

1 65.63 75.00
2 56.25 65.00
3 46.88 55.00
4 37.50 50.00
5 28.13 40.00
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