What is something the customer should know about finance leases?

Study for the Specialist Automotive Finance Test. Use flashcards and multiple-choice questions with detailed explanations to get exam ready!

Multiple Choice

What is something the customer should know about finance leases?

When you take a finance lease, you don’t own the vehicle—the finance company does for the term. You’ll have the right to use it, but if you need to end the agreement early, you can terminate, and there will be charges. The important point is that those charges are defined in the contract and are typically substantial, reflecting the lender’s expected loss from the early end of the lease and the remaining payments. This is why the option stating you can terminate but with defined, often high charges disclosed in the agreement is the best answer. The other ideas—handing the car back without cost, or owning the vehicle—don’t fit the way finance leases work.

When you take a finance lease, you don’t own the vehicle—the finance company does for the term. You’ll have the right to use it, but if you need to end the agreement early, you can terminate, and there will be charges. The important point is that those charges are defined in the contract and are typically substantial, reflecting the lender’s expected loss from the early end of the lease and the remaining payments. This is why the option stating you can terminate but with defined, often high charges disclosed in the agreement is the best answer. The other ideas—handing the car back without cost, or owning the vehicle—don’t fit the way finance leases work.

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