You decided to get a Lexus (better than a lime green Civic) and have negotiated a price of $42,000 even

though the MSRP is 45,500. You are trying to decide between leasing it and buying it. In either case you will spend a

total of $10,000 at the time of delivery -- that's all you have right now so any up-front money has to come out of

that and not exceed that amount.

Lease it: Terms: 36 months, .64 residual, .00225 money factor, $250 lease processing fee (not taxable) due

at closing (time of purchase), a $300 security deposit (non-taxable and refundable at end of lease)

ii. Finance it: 5 years, monthly payments, 4.8%.

Let's assume, for whatever reason, you decided to purchase the Lexus above with the loan rather than

leasing it. The dealer offers you a choice of promotions. You can have 2.4% financing over the five years with

monthly payments or you can have $1500 cash back at time of closing, immediately after you complete the

purchase. (The deal is the same as described above but you get either the less expensive financing or a non-taxable

refund check for $1500 along with your new car.) Which of these two options is more attractive financially and

why?