[R121]

RVI (residual value insurance)

A type of business risk faced by leasing parties which involves the property being returned at the end of a lease having less market value than assumed when the agreement was written. Example: A car leasing agreement assumed that, after one year, the vehicle would be worth $10,000 but it ends up with a value of $7,200. Residual value insurance protects a lessor against such value shortfalls.