Answer :
Answer:
leasing a car provides flexibility and lower initial costs compared to buying, but it means you do not own the vehicle and must return it or buy it at the end of the lease term.
Explanation:
That's correct. When you lease a car, you essentially enter into a long-term rental agreement with the leasing company or dealership. Here are the key points:
1. **Ownership**: The leasing company retains ownership of the vehicle throughout the lease period. You do not own the car, but you have the right to use it according to the terms of the lease agreement.
2. **Usage**: You can use the leased car for a specified period, typically 2-4 years, depending on the lease terms.
3. **Payments**: You make monthly lease payments, which are usually lower than loan payments for buying a car outright, because you are paying for the depreciation of the vehicle during the lease term, plus interest and fees.
4. **Responsibilities**: You are responsible for maintaining the leased car as specified by the leasing agreement, including regular maintenance and keeping the vehicle in good condition.
5. **End of Lease**: At the end of the lease term, you have several options:
- Return the car to the leasing company, pay any fees for excess wear and mileage beyond what's allowed in the lease agreement, and walk away.
- Purchase the car from the leasing company at the residual value specified in the lease agreement. This is often referred to as a buyout option.
- Some leases may also offer the option to extend the lease for a further period.
6. **Advantages**: Leasing can be advantageous for those who prefer driving newer cars with lower monthly payments and who don't want the hassle of selling or trading in a car. It also provides flexibility at the end of the lease term.
7. **Disadvantages**: Leasing typically has mileage restrictions and fees for excess wear and tear. It may also be more expensive in the long run compared to buying a car outright, especially if you intend to keep the car for a long time.
In summary, leasing a car provides flexibility and lower initial costs compared to buying, but it means you do not own the vehicle and must return it or buy it at the end of the lease term.
