Assume you are offered a lease for a car with $227 monthly payments for 36 months after a $2,540 up front (down) payment. The alternative is that you can buy the car for $31,000 and make a $3,200 down payment with 60 payments at 2.49% interest. At the end of the 36 months you would be able to sell the car for $22,750. Assume that at the end of 36 months you will make the decision to give the car up. Further, assume the car dealership requires $0.15 per mile over 20,000 on the car. If you expect to drive the car for 22,319 miles, what is the Net Advantage to Leasing?

Answer rating: 100% (QA)

To calculate the net advantage of leasing we need to calculate the total cost of leasing and the total cost of buying the car including the value of t... View the full answer