BUYING VS. LEASING Essay Example | Topics and Well Written Essays - 500 words

BUYING VS. LEASING - Essay Example The car that has been selected for this discussion is 2015 Accord Sedan LX. Whether to buy a car through the method of loan financing or obtaining a car on the basis of lease is dependent on various reasons. One of the reasons that help in deciding whether to buy or lease a car is dependent on how long does an individual wants to use and own the car. If the person wants to own a car for a shorter period of time and aims at changing the car in a limited time period, then the person should opt for obtaining the car on lease. If the person wants to keep the car for a longer period of time, then the person should obtain it on the basis of a loan. For example, table 1 suggests that if a person wants to keep the car after the lease period is over the total cost of obtaining the car will be $26,712 and this cost will include the residual value as well as the lease payments that a person will make for 3 years for a 2015 Accord Sedan LX. On the other hand table 2 suggests that if the person obtains the car on the basis of an auto loan, he has to pay a total amount o f $25,596 and this amount will include the 2.9% APR that a person pays on the Manufacturer’s suggested retail price. This means that purchasing a 2015 Accord Sedan LX for the long-term on the basis of loan is less expensive as it costs $1,126 less to obtain a car on the basis of a loan instead of obtaining it on lease basis. On the other hand if a person choses to keep the 2015 Accord Sedan LX for a shorter period of time then he/she should opt for the leasing option because the person will only have to pay $15,012 to enjoy the car for 3 years and then he/she can switch to another car. In my opinion, I would obtain 2015 Accord Sedan LX on the basis of a lease as I believe that owning a car for a shorter period of time is better than owning it for a longer period of time. Since I want to keep the car for a shorter time period, I would prefer to pay only $15,012