2007-03-09 08:43:30 · 5 answers · asked by Inquisitive-me 1 in Cars & Transportation ➔ Buying & Selling
Yes. You are paying for the depreciation of the car plus the interest on the depreciation. If you lease a car for 5 years you are getting a loan for the difference between the value of the car today and its projected value in 5 years.
2007-03-09 08:52:35 · answer #1 · answered by The man 7 · 0⤊ 0⤋
Yes, leasing a car is like paying an interest only loan. Plus, you are paying for the expected depreciation on the car. Leasing builds no equity in the vehicle, though at the end of the lease term, the bank will generally offer for you to buy it for less than the Book Value. This saves them from having to auction it for a potentially even lower value.
2007-03-09 10:14:42 · answer #2 · answered by greatrussian 1 · 0⤊ 0⤋
yes, you are paying interest on the time you have the car. leasing a vehicle is a great way to go. don't lease anymore than 48mon. most leases are 36mo. you can ask the dealer what the interest is. on leases they're called money factors and it looks something like .00185 or .00360. you yourself can change it into the interest rate by timeing whatever money factor they give you by 24. .00360 x 24 will equal .0864 which is 8%.
but leasing is a great way to go if you need to keep you monthly payments down, your fully warranteed, you're doing an average of 15k miles a year or under, though you can have them calculate higher miles. Toyota and Honda are great co. to lease with.
2007-03-09 09:58:51 · answer #3 · answered by Melissa T 3 · 1⤊ 0⤋
Yes, and it's almost like buying a car.....if you turn it in too early, then you may owe more than the car is worth. If you try to buy or lease another one, then they'll add the difference to that next vehicle....that is called negative equity. Make sure that you read your lease agreement fully, and understand it fully. Sometimes they require a "balloon payment" at the end of a cycle.....which could be several thousand dollars. It's far more better to just buy it. Best of luck to you.
2007-03-09 08:50:22 · answer #4 · answered by cajunrescuemedic 6 · 0⤊ 1⤋
Yup. Do your homework. Compare similar models from different places. Get a quote from each and then go to the second best price and ask if they'll match the best one. Forget the highest price all together.
2007-03-09 08:52:23 · answer #5 · answered by PuckDat 7 · 0⤊ 0⤋
Yes, you pay interest on your payment every month.
2007-03-09 08:49:38 · answer #6 · answered by wheresthevowels 2 · 0⤊ 0⤋