Michael is considering getting a closed-end lease on a car for 48 months. The car dealer quotes him a monthly payment of $349. ?

If Michael were to buy the car with the same down payment, his monthly payment would be $465 a month. Michael's lease payment is lower because

Update:

 

 

he is not paying for the residual value of the car at the end of four years. 

 

car dealers make a lower profit on leased cars. 

 

leased cars do not come with a manufacturer's warranty. 

 

he is paying finance charges only on the amount of the car that will be depreciated over four years. 

 

One of these are the answers to the question above.

6 Answers

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  • 3 weeks ago

    Uvuvyvycyvyuvyvuv

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  • Anonymous
    1 month ago

    Do your own homework. And never lease.

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  • 1 month ago

    The lease price is lower as, unlike with a purchase, the payments provide ZERO equity.

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  • Rick
    Lv 4
    1 month ago

    The payment is based on a smaller amount in total. The monthly length of terms on a loan can be limited by the miles on the vehicle. 

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  • 1 month ago

    He is renting, not buying. At the end of the lease he owns nothing. If he buys, he owns the vehicle as long as he pays for it.

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  • Bill
    Lv 7
    1 month ago

    He isn't paying interest, and the dealer gets the car back at the end of the lease.

    • nascar88gyrl
      Lv 7
      1 month agoReport

      You do pay interest on a lease.

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