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Lease or Buy, Options when Acquiring a Car

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. Goal.

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Lease or Buy, Options when Acquiring a Car

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  1. 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

  2. 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

  3. 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

  4. 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

  5. Any Questions?

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