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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:________.

a) he is not paying for the residual value of the car at the end of four years.b) he is paying finance charges only on the amount of the car that will be depreciated over four years.c) car dealers make a lower profit on leased cars.d) leased cars do not come with a manufacturer's warranty.

Respuesta :

Answer:

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

Explanation:

According to Investopedia dot com, the term closed-end lease refers to a rental agreement that doesn't put obligation on the lessee, the person making the payments periodically, to purchase the leased assed at the end of the  agreement. Other terms are true lease, walkaway lease, or net lease. Due to this, the correct answer is letter B.

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