Question

evaluating an alternative: buying option a
savings: $2,500
discretionary spending: $450 per month

compare the costs of buying and leasing a new vehicle.
what are the advantages of buying the car? check all that apply.
□ i have enough saved for the down payment.
□ there are no mileage restrictions.
□ the price of the car is less.
□ the monthly payment is less.
□ i will own the car in five years.

	option a (buy)	option b (lease)
up - front cost	$2,500	$3,925
monthly payment	$338 for 60 months	$229 for 36 months
mileage restriction	none	10,000 per year

Explanation:

1. "I have enough saved for the down payment": The up - front cost (down payment - like) for buying (Option A) is $2,500, and if one has savings of $2,500, this is an advantage.
2. "There are no mileage restrictions": From the table, Option A (Buy) has "None" for mileage restriction, while Option B (Lease) has 10,000 per year. So this is an advantage of buying.
3. "The price of the car is less": The total cost of buying is $22,780 and leasing is $12,169, so this is not an advantage.
4. "The monthly payment is less": The monthly payment for buying is $338 and for leasing is $229, so this is not an advantage.
5. "I will own the car in five years": Option A is a 60 - month (5 - year) buy, so at the end of 5 years, the buyer will own the car, which is an advantage.

Answer:

• I have enough saved for the down payment.
• There are no mileage restrictions.
• I will own the car in five years.