Truth in Lending: 13.5.3.2.1 Reading the formula
Leases specify that the consumer owes any past due lease payments that have not been made, plus any late fees, taxes, and the like. The consumer also owes an early termination charge that typically will be expressed either in terms of an adjusted lease balance or in terms of the remaining lease payments plus the residual value of the leased item. In either case, the lessor will deduct from the consumer’s resulting liability the car’s realized value at early termination.