Leasing vs. Buying a Car

Question 4 • 2025-2026 GSP Mathematical Reasoning for Decision Making

Which of the following statements explains the difference between a lease and a loan?

Answer

At the end of a loan the car belongs to you, but at the end of a lease, the car still belongs to the lease company.

At the end of a loan, the car still belongs to the lease company, but at the end of a lease the car belongs to you.

A loan requires a large down payment at the beginning while a lease does not.

A lease requires a large down payment at the beginning while a loan does not.

Explanation

When you buy a car with a loan, you pay off the amount borrowed and own the car. With a lease, you pay to use the car for a set period, and it generally remains the leasing company’s property when the lease ends. So the statement that a loan ends with you owning the car, while a lease ends with the car belonging to the lease company, is correct.

AI-written and checked against the verified answer.

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