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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Something no one seemed to have touched on.
Rent, you pay monthly to the owner.
Lease, you (or the bank 99.9% of the time) pay for the full X years balance upfront. So for the $40k car a 3 year lease might cost 20k. At the end of the 3 years you return you car back (generally with an option to buy but not always). A lending bank lends you the 20k and pays the car dealership up front the 20k while charging you monthly with interest.
Companies often “lease” their equipment because they know they aren’t going to want to own it indefinitely and its easier from an accounting perspective to deal with. They will pay the full amount upfront often.
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