Leasing a Car

A term that describes an alternative to car buying where monthly payments are paid for a specific period of time, after which the vehicle is returned to the dealership or bought, is:

• car financing
• car ownership
• car maintenance
• car leasing

Breanna completed her lease term, and decided to turn the car in instead of purchasing it.  Upon inspection, the dealership noted that the windshield was cracked.  
What fee will Breanna be required to pay as a result?

• Cash Fee
• Acquisition Fee
• Lease Penalty
• Depreciation Fee

Josyln completed her lease term, and decided to turn the car in instead of purchasing it.  Upon inspection, the dealership noted that she drove 5000 miles over the mileage allowance.  
What fee will Josyln be required to pay as a result?

• Cash Fee
• Acquisition Fee
• Lease Penalty
• Depreciation Fee

What are good reasons to purchase a used car over a new car? (hint: choose 2 correct answers)

• New cars depreciate faster than used cars

• Insurance is generally cheaper on a used car

• There are typically better financing options on a new car

• You can get more car for your money when buying used

A disadvantage of buying a new car is it loses value faster than a used car. This is called

• Capital gain

• Inflation

• Depreciation

• Amortization

Paying full-price for a car in cash has many benefits. This is a better option for someone who...(hint: choose 3 correct answers)

• Has the money saved up and can afford to pay in full

• Does not have a steady source of income

• Wants to get a great price from a private party

• Wants to build their credit score

Financing a vehicle has advantages & disadvantages. Which is a disadvantage?

• You need a small amount of money upfront compared to buying the car

• You pay interest and fees on borrowed money

• Your credit score is not taken into consideration

• You have more flexibility to pay the car off over time

All of the following are advantages of leasing a vehicle EXCEPT

• Your monthly payment is typically cheaper

• Your auto insurance is typically cheaper

• You get a new vehicle more frequently

• Standard maintenance is typically included

Financing an auto loan over a longer period of time...(hint: choose 2 correct answers)

• Increases your monthly payment

• Decreases your monthly payment

• Increases the amount you pay in interest

• Decreases the amount you pay in interest

It is important to comparison shop when purchasing a car. What does comparison shop mean?

• Always buy from a local dealership

• Take several photos to use for comparison

• Compare the true market value of every vehicle

• Compare the price & quality from different vendors