Lease or Buy a Vehicle

LEASE OR BUY A VEHICLE

Abstract

It is time for me to acquire a new vehicle, and a decision must be made whether this new vehicle should be leased or purchased. In this paper the issue of leasing versus purchasing a new vehicle will be examined, and taking in the factors that affect the decision making process. It is a decision that will be partially based on upfront costs, total monthly payments and the impact on my monthly budget. The analysis will identify many of the advantages and disadvantages with respect to the value of the vehicle, return of investment, depreciation, and vehicle disposition at the end of the loans. In addition there will be an evaluation of the decision with respect to the implicit costs associated with my lifestyle, future considerations regarding the family and other utility benefits.

The assessment clearly shows that the monthly payment, economic savings, and other personal choices leasing still may be a favorable a decision as it had been in the past.

Executive Summary

A decision has been made to acquire a new vehicle. My initial research had determined that the vehicle will be a 2012 model, and the subsequent acquisition of this new vehicle will either be purchased or leased. The monthly payment will be a major consideration with respect to the impact it will have on my budget. My research will determine the pros and cons of both scenarios and take into account the following issues;

• Cost advantages and disadvantages of leasing versus buying a vehicle.

• Advantages and disadvantages of ownership.

• Utility benefits

• Return of Investment.

Introduction

In our daily lives we are forced to make decisions about many things. Some times the resolution to these issues is fairly straight forward, and easy. While other times the decisions are more complex, and require gathering information, and a step by step approach. (Dietrich, 2010) When it comes...