If the cost of a lease is directly related to depreciation, why does a short lease have higher monthly payments than a longer lease?
A.. The reason the shorter lease is more expensive is that a typical car (let’s use an Acura TL as an example) depreciates 35% in its first 24 months, 9% more in the next 12 months, and only 7% more in the next 12 months. So in a short lease, you’re paying primarily for the large initial depreciation that all new cars and trucks experience.
A. The reason the shorter lease is more expensive is that a typical car (let’s use an Acura TL as an example) depreciates 35% in its first 24 months, 9% more in the next 12 months, and only 7% more in the next 12 months. So in a short lease, you’re paying primarily for the large initial depreciation that all new cars and trucks experience.
