Lease or Buy, Options when Acquiring a Car

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Lease or Buy,Options when Acquiring a Car

• Group 4 Members
• Jason Baughman Organizer / PowerPoint
• Juan Sauceda Lease and Purchase Terms Ford
• Jared Shimizu - Lease and Purchase Terms BMW
  Hung Ton Worth Analysis

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Goal

• Analytically compare the lease and buy options on
  two types of cars.
• Ford Focus (Low Cost)
• Poor resale value
• BMW (High Cost)
• High resale value

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Analysis

• Present Worth of each case
• 5 year lease at dealer interest rate
• 5 year purchase at dealer interest rate
• Vehicle resold to dealer at end of 5 years
• Four cases total
• Maintenance costs for all cases are equal
• Oil changes
• Basic Maintenance
• No catastrophic failures within 5 year period
• Fuel Costs are Variable between cars
• Manufacturer Ave (H/C) MPG
• 15000 mi/year
• 2.00 /gallon

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Comparisons

• Difference in Present Worth Lease Buy for two
  vehicle classes
• Compares Purchase options for Ford and BMW
  Individually
• Normalized PW PW / Initial Vehicle Price
• Allows the comparison of BMW to Ford Directly
• Compares the total purchase cost of BMW to Ford

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Any Questions?