Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only if:
A) fuel costs have been higher than expected.
B) the residual value is more than expected.
C) the mileage limits are exceeded.
D) the company upgrades the automobile.
E) your automobile insurance premiums increase.

Question

Quizplus · Accepted Answer

With a closed-end lease, the lessee is only responsible for paying for additional mileage charges if they exceed the predetermined mileage limit outlined in the lease agreement. Therefore, if the lessee has exceeded the mileage limit at the end of the lease term, they will need to pay additional money. Fuel costs, residual value, upgrades by the company, and automobile insurance are not factors that affect the end-of-lease charges for a closed-end lease.

Assume That You Have Taken a Car on a Closed-End