1 / 12

Team 2

Team 2. Vinh Thu Lieu – Organizer Qi Xu – Summarizer Manuel Gutierrez – Techie. Scenarios. Buying Vs. Leasing a Vehicle . BMW 3-Series 325Ci Convertible Good Entry Level Sport Car Reliable Good Resale Value (approx. <= 70% ) Depending on the Used Cars

delilah
Download Presentation

Team 2

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Team 2 Vinh Thu Lieu – Organizer Qi Xu – Summarizer Manuel Gutierrez – Techie

  2. Scenarios Buying Vs. Leasing a Vehicle. • BMW 3-Series 325Ci Convertible • Good Entry Level Sport Car • Reliable • Good Resale Value (approx. <= 70% ) Depending on the Used Cars • Comfortable and Great Looking Car • MSRP: = $40,295 • Selling Price: = $36,750 What should he do?

  3. Course of Action 1 • Buying a Car: • Down Payment: $2500 • Excellent Credit: ARP at 6.65% - 3 Year fixed APR Performance Loan • Monthly Payment: $1139

  4. Course of Action 2 • Leasing a Car: • Annual mileage: 12,000 miles/year - 3 Year Terms • Down Payment: $2500 • Monthly Payment: $494

  5. S = $0 S =$24177 n = 36 A = $494 n = 36 $ 2500 A = $1139 $ 2500 Annual Worth Analysis BMW 3-Series 325Ci Convertible Buy Cash Flow Diagram Lease Cash Flow Diagram

  6. Sensitivity Analysis • Varies Down Payment • Varies the Financial Period (Terms) • Over Mileages Cost • Buying vs. Leasing

  7. Down Payment Analysis

  8. Financial Period and Mileage Analysis

  9. Decision • Down payment: $2500 (Selling Price: $36750) • 3 years financing • Keep the Car Total Cost: $40,999.10 (Buy) Total Cost: $42,763.70 (Lease) • Don’t Keep the Car Total Cost: $14924.22 (Buy) Total Cost: $17780.80 (Lease) • Difference: $2856.60 • Buying is the best choice here

  10. Advantages and Disadvantages of Buying • Advantages: can modify your car in whatever manner you choose , there are no mileage restrictions, You can drive as many miles, you have the flexibility of selling the car whenever you want • Disadvantages: As warranty expires and you experience mechanical problems with the vehicle, you're responsible for the repair costs. As vehicle gets older, you can expect to incur repair and maintenance costs , Cars depreciate in value while depleting your liquid cash in the process

  11. Advantages and Disadvantages of Leasing • Advantages: leasing provides an opportunity for people to drive more expensive vehicles for less money each month, leasing allows consumers to drive a new vehicle every few years, Leasing helps consumers avoid the hassles often associated with selling their used car to an independent third party or trading in their vehicle to a local dealer • Disadvantages: most vehicle leasing programs have a yearly mileage limit, leased vehicles usually require higher insurance limits, Lease contracts can be difficult

  12. Resources • http://www.nada.com/ ( Vehicles pricing, Tip and advising about lease vs. buy ) • www.bmwusa.com ( vehicles about the chosen car ) • http://forums.mwerks.com/zerothread?cmd=print&id=794813 ( formula for lease ) • Text Books (Present Worth Analysis)

More Related