One difference between obtaining a car with a lease or a loan is that _____.

• A. with a loan, you are required to return the car at the end of the term, while with a lease, you keep the car.
• B. a loan never requires a down payment, but a lease always does.
• C. with a lease, you typically do not own the car at the end of the agreement, while with a loan, you own the car after the final payment.
• D. leasing always results in higher monthly payments than a loan for the same car.

Answer: (C)

Verified step by step guidance

1. Understand the key difference between leasing and loaning a car: Leasing involves paying for the use of the car over a specified period, while a loan involves borrowing money to purchase the car outright.
2. Recognize that with a lease, you typically do not own the car at the end of the agreement. Instead, you return the car to the leasing company unless you choose to buy it at its residual value.
3. Understand that with a loan, you make monthly payments to repay the borrowed amount plus interest. Once the loan is fully paid, you own the car outright.
4. Note that leasing often requires lower monthly payments compared to a loan for the same car, but you do not build equity in the car as you would with a loan.
5. Clarify that a down payment may be required for both leasing and loans, depending on the terms of the agreement, but this is not a universal rule for either option.