Michael is considering getting a closed-end lease on a car for 48 months. The car dealer quotes him a monthly payment of $349. If Michael were to buy the car with the same down payment, his monthly payment would be $465 a month. Michael's lease payment is lower because

1-he is paying finance charges only on the amount of the car that will be depreciated over four years.

2-car dealers make a lower profit on leased cars.

3-leased cars do not come with a manufacturer's warranty.

4-he is not paying for the residual value of the car at the end of four years.