This is the second of nine articles in our Blog Series Is Leasing Really Fleecing? In our previous article on How Leases Work, we stated that "interest" was one of the factors in determining the amount of the monthly lease payment. The time value of money is a significant factor in the pricing of leases. But, interest does not work the same way in leases that it does in car loans.
Perhaps the most frequent question asked of us by our friends and clients shopping for a new car is whether they should finance or lease their next vehicle. Car dealerships and manufacturers promote leases heavily in their advertisements, and some dealerships push lease deals pretty aggressively. They point out lease payments are lower than the car loan payments. But, is leasing really cheaper on a long term basis?