4. The lease versus purchase analysis - Part 1 which is better to lease or to buy? A car buyer has two financing alternatives to lease or to purchase. Each has operational as well as financial advantages and disadvantages. Therefore, it is critical that you be able to compare them for yourself and make your own decision. Remember, a dealer will recommend the strategy that is most advantageous to him or her. You must protect your own interests. Read each statement that follows and indicate whether it identifies an advantage or disadvantage of a lease or a purchase transaction to acquire a new or previously owned vehicle More Closely Associated with a Lease Transaction Purchase Transaction Statement Generally requires lower monthly payments and allows you to get more car for your money As you repay the loan, you develop equity or trade-in value on the vehicle How should you decide whether to buy or to lease a vehicle? Check all that apply. Accept the financing alternative suggested by the dealer. Accept the financing alternative suggested by your friends Relate the advantages and disadvantages of leasing and purchasing to your personal situation and decide which financing alternative is better for you at the current time. Use a lease-versus purchase worksheet to identify and compare the total costs of leasing and purchasing and select the method that minimtes both your total cash outlay and your opportunity costs