How is residual modelled?

As a fraction of MSRP retained at the end of the comparison period, applied as a credit against total cost.

Does a higher residual always mean a cheaper car to own?

All else equal, yes — a higher resale credit lowers 5-year TCO, but purchase price and running costs still dominate for many drivers.

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Residual value basics

How end-of-period resale assumptions swing 5-year totals.

Residual is modelled as a fraction of MSRP kept at the end of the period. Higher residual lowers TCO because it credits money back when you sell or trade.