Question: Case #1: Leasing vs. Buying (10 marks) Based on the following data: Prepare a financial comparison of buying and leasing a motor vehicle with a

Case #1: Leasing vs. Buying (10 marks)

Based on the following data:

  1. Prepare a financial comparison of buying and leasing a motor vehicle with a $30,000 cash price.

Down payment (to finance vehicle), $5,000

Down payment for lease, $1,500

Borrowing cost is 12%

Monthly loan payment, $610

Monthly lease payment, $505

Length of loan, 48 months

Length of lease, 48 months

Value of vehicle at end of loan, $8,300

End-of-lease charges, $450

  1. What other factors should a person consider when choosing between buying or leasing?
  2. Is leasing better than buying?

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