What is a guaranteed residual value and un-guaranteed residual value in lease?

A guaranteed residual value in a lease is the minimum value that the leasing company agrees the asset will be worth at the end of the lease term; this provides security for the lessee and can lower monthly payments. An un-guaranteed residual value, on the other hand, is not backed by a promise from the leasing company, meaning the lessee assumes the risk of the asset's actual market value at lease end. If the asset's value falls below the un-guaranteed amount, the lessee may face higher costs or obligations.