Since nobody can truly predict the future, residuals are only educated guesses based on historical resale-value data for specific automobile makes and models. Leasing companies subscribe to services that provide this kind of industry data, and then use it to set their own residual numbers. Car manufacturers' leasing companies often temporarily boost residuals on slow selling vehicles so that they can offer better lease deals. These are called subvented deals. The actual value at the end of 36 months might be higher or lower.
Residual percentages decrease as the length of a lease, called the term , increases.
This is because the older a vehicle gets, the less it's worth. Residuals fall rapidly in the first 24 months, then more slowly in later months. This is why shorter term leases are more expensive than longer leases. Remember, the higher the residual, the lower the lease payments. This is not to say that cars with lower residuals cannot be good lease deals, it's just that you get more car for your dollar with the high-residual models.