53. Put off by the high monthly car payments of Exercises 15–17, you might be attracted to leasing a car instead of buying one. With the “college grad discount,” in May 2014 in Rhode Island you could lease a 2014 Toyota Corolla LE A4 for $65 per month for 24 months (plus tax, tag, title, registration, and “dealer documentation fee” of $200). You would also get no-cost maintenance and 24-hour roadside assistance during the 24 months. Because this was a lease, not a loan, the dealer does not have to disclose anything about interest rates. However, the “capitalized cost” was the buy-it price of $15,490 minus the required down payment of $1900, so $13,590. You would have the option at the end of the lease to purchase the car for $13,542. So in effect, your monthly payments would have paid for the difference in value of the car of . However, those payments would have totaled only .

The purchase price, if you had bought instead of leased, would have been $15,490, with (after the down payment) financing needed for $13,590.