Much like a home mortgage, in a loan scenario, your monthly payment includes much more interest per payment at the beginning of the loan than at the end. A lease, however, charges the exact same amount of interest in each payment.
Because of this, you may find yourself “upside down” in a loan for the first couple years because you are not paying off enough of the principal cost of the car during the beginning of the term. Loans are designed to pay lenders “up front” because you are not obligated to continue the loan through the entire term. Leases, on the other hand, require you to pay a fixed amount for a fixed period of time, and therefore leasing companies can charge customers in a different manner.
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