Question

1. your lease payment is typically covering...

a. insurance on the vehicle plus interest
b. the depreciation of the vehicle (loss of value) plus interest
c. the principal of your loan plus interest
d. only the interest on the loan

Explanation:

Vehicle lease payments are structured to compensate the lessor for the vehicle's value lost during the lease term (depreciation) plus interest on the capital tied up in the vehicle. Insurance is a separate cost, and principal repayment applies to loans, not leases.

Answer:

b. The depreciation of the vehicle (loss of value) plus interest