I don’t understand why there is an interest rate quoted on car leases. How is leasing something different than renting something? If I get an apartment I just pay rent. So how does interest come into play.
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I’ll do my best to explain this because most of the responses here make my brain hurt.
When you buy a car, you make payments with the expectation that it will be paid off in a certain amount of time. Like 3-5 years. Then the car is yours.
When you lease a car you are basically renting it but you usually have an option to pay off the remaining balance and the car and keep it.
Reasons one might lease a car could be. The lease payment is cheaper than regular financing because you aren’t buying it. You won’t get to keep it and sell it. Or, if you are the type of person that wants a brand new car with no issues and not have to be bothered with the maintenance that comes with higher mileage cars, you return the and lease a new one.
Keep in mind that you will still pay interest/depreciation/ mileage if you lease. Most leases have a maximum mileage and you pay X amount for each mile over and it sometimes forces your hand to just pay the thing off and keep it.
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