Question 25 • 26-27 Ignite Technical Math-Financial Math - MA2007
If a person wanted to purchase his or her dream car, and keep it for many years, is leasing or buying the better option? Why?
Answer
A
Buying would be the better option because the overall cost would be less. After the car is paid off, the owner gets much more value from the car, having already paid it off.
B
Leasing would be the better option, so the newest model could be driven every few years.
C
It wouldn't matter, as long as the person got to drive the dream car.
D
Leasing would be the better option because it would allow the person to customize the car and drive it as much as he or she wants.
Explanation
Buying is usually better if someone plans to keep the car for many years. Once the loan is paid off, the owner can continue driving the car without ongoing lease payments and gets more use from the money already spent. Leasing is generally better for changing cars every few years, and often limits customization or mileage.
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