The computations below show that leasing a car for three years costs $14,000 and lasts only 3 years, while buying a car costs $12,800 and takes four years. Then, it would be informed to buy the car than to lease it.
A lease is a legal agreement that requires the user to pay the owner in exchange for using a particular asset. Common assets that are leased include real estate, construction projects, and vehicles.
According to the given information,
Down Payment = 0
Monthly Payment(EMI) = $350
Time= 48 months
End of the loan term worth = $4,000
Then, the purchase price of the car would be:
Purchase Price = EMI *Time – End of the loan term worth
Purchase Price = ($350 x 48) – 4,000
Purchase Price = $12,800
In the condition of Leasing of Car:
Monthly lease = $350
Time of Lease = 36 months
End of lease cost = $1,400
Then, the amount of leasing would be:
Lease = (Monthly lease x Time of Lease)+ End of lease cost
Lease = ($350 x 36) + $1,400
Lease = $14,000
According to the calculations above, purchasing a car costs $12,800 and takes 4 years, whereas leasing a car for 3 years costs $14,000 and lasts only 3 years.
Therefore, it would be wiser to buy the car than to lease it.
Learn more about the leasing, refer to:
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