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Buy vs. lease. You have found the right car. You have told the dealer that you want to purchase the car. It will cost you $45,000 out the door.
Buy vs. lease. You have found the right car. You have told the dealer that you want to purchase the car. It will cost you $45,000 out the door. You will put down 25% and take a 4 year car loan out for the rest. The interest rate for the loan is 2.99% for 48 months. You made the deal but the dealer also offers you an opportunity to lease the car and save money every month. Here are the terms:
-capitalized cost $4500
-lease payments $399
-security deposit is 2 lease payments
-lease term is 48 months
-mileage cap is 10,000
-mileage charge if over is $0.25/mile
-residual value: $22,500
Your savings account pays you 0.80% per year. You typically drive 13,000 miles/year. You plan on bringing the car back in perfect condition.
1-if you buy the car what are your monthly payments?
2-what is the cost of the leasing the car over the entire lease terms?
Please use formulas not excel.
