Advantages of Leasing - CTFA Exam Question

D

Leasing a car is a popular alternative to buying one outright. With a lease, you essentially rent a car for a set period of time, typically two to four years, and make monthly payments. At the end of the lease term, you can return the car or purchase it for a predetermined price.

Each of the options listed in the question represents a potential advantage of leasing, except for one. Here's a breakdown of each answer:

A. Better car for less money: One of the primary advantages of leasing is that it can allow you to drive a more expensive car for less money than if you were to purchase it outright. This is because lease payments are typically lower than loan payments. So, option A is an advantage of leasing.

B. A new car every few years: Another advantage of leasing is that you can upgrade to a new car every few years, which means you'll always be driving a newer car with the latest features. This can be especially appealing if you like to stay up-to-date with the latest technology and safety features. So, option B is an advantage of leasing.

C. No trade in hassle at the end of the lease: When you lease a car, you don't have to worry about selling or trading it in at the end of the lease term. Instead, you simply return the car to the dealership and walk away. This can be convenient and hassle-free. So, option C is an advantage of leasing.

D. No mileage penalty: This option is the exception as it is not an advantage of leasing. In fact, one of the drawbacks of leasing is that there are typically restrictions on how many miles you can drive the car without incurring additional fees. If you exceed the mileage limit, you may be charged a penalty at the end of the lease term. So, option D is not an advantage of leasing.

In summary, options A, B, and C are all potential advantages of leasing, while option D is not.