In which of the following situations would it be most appropriate to opt for a car lease rather than purchasing a car?

• A. When you want to avoid any restrictions on vehicle customization and modifications.
• B. When you prefer to build equity in the vehicle over time.
• C. When you intend to keep the car for more than 10 years and drive high annual mileage.
• D. When you want lower monthly payments and plan to drive a new car every few years.

Answer: (D)

Verified step by step guidance

1. Understand the concept of car leasing: Leasing a car involves paying for the use of the vehicle over a specified period, typically 2-3 years, rather than purchasing it outright. Monthly payments are generally lower compared to financing a car purchase.
2. Compare leasing versus purchasing: Leasing is ideal for individuals who prefer lower monthly payments, do not want to commit to long-term ownership, and enjoy driving newer models every few years. Purchasing is better for those who want to build equity in the vehicle and plan to keep it for a long time.
3. Evaluate the given options: Analyze each scenario provided in the problem to determine which aligns with the benefits of leasing. For example, leasing is not suitable for high annual mileage or long-term ownership due to mileage restrictions and lack of equity.
4. Identify the correct situation: The most appropriate situation for leasing is when someone wants lower monthly payments and plans to drive a new car every few years, as this matches the advantages of leasing.
5. Conclude the reasoning: Leasing is a flexible option for short-term use and lower costs, while purchasing is better for long-term ownership and customization. The correct answer aligns with the benefits of leasing.