Presentation is loading. Please wait.

Presentation is loading. Please wait.

Brent GroomDavid Tran Luu Tran Presentation Topics Lease vs. Buy Comparison Sensitivity Analysis Decision Resources.

Similar presentations


Presentation on theme: "Brent GroomDavid Tran Luu Tran Presentation Topics Lease vs. Buy Comparison Sensitivity Analysis Decision Resources."— Presentation transcript:

1

2 Brent GroomDavid Tran Luu Tran

3 Presentation Topics Lease vs. Buy Comparison Sensitivity Analysis Decision Resources

4 Lease vs. Buy Comparison Basic Assumptions for 5 years: BuyingLeasing Car (2005)Camry LE V6 Down$5000 MilesN/A12,000 Credit720

5 Leasing vs. Buying Basic Research Results for the Toyota Camry V6 LE Price$22,500 Down Payment$4,700 Nominal interest6.07%

6 Leasing vs. Buying Basic Research Results: BuyingLeasing Monthly$387$252 Salvage$8,8000

7 Leasing vs. Buying Basic Calculated Results: BuyLease PMT$378$252 Future Value$32,815$25,015

8 Analysis BuyLease Re-paintYesNo PaymentHigherLower Mileage limitNoYes Salvage valueGet to keepno

9 Analysis Toyota Camry LE V6 Cash Flow Diagram Buying(cal) n = 60 $ 4,700 A = $378 S = $8,800 Leasing n = 60 $ 4,700 A = $252 S = $0

10 Sensitivity Analysis Variables: - Down Payment - Leasing term (n) - Mileage

11 Sensitivity Analysis Varying Down Payment Down Payment Buying PMT Leasing PMT 0$470$ $421$ $378$252

12 Sensitivity Analysis Varying term MonthBuyingLeasing 36$595$372 48$459$297 60$378$252

13 Sensitivity Analysis Varying the over mileages Mileages overCost/mileAdditional charge 1000$0.15$ $0.15$ $0.15$450

14 Decision Lease or buy, which one is better? - Lease allow lower monthly payment, always under warranty, and drive new car every 2 or 3 years. - Buy allow payment –free for a while, resale the car, and able to upgrade Secret price quote. Cost of the car that is below the dealer invoice

15 Decision Monthly cost analysis Using EUAC: Buying: $334 Leasing: $334 Another way of looking at it: BuyLeaseDifference Monthly Payment$378$252$126 Salvage$88000 In order to make $8800 in 60 months, need interest rate of % or the nominal interest rate of 6.07%, which is the same as buying.

16 Leasing Formulas Residual = 60% *(MSRP) Net cap cost = Negotiate price - down Depreciation = (Net cap cost – residual) / n Finance =(Net cap cost + residual) * money factor PMT = Depreciation + Finance + Tax

17 Resources For new/used car comparison For information how to lease or buy For the Secret Price Quote For Salvalge value and car price:

18 Car- Lease v.s Buy


Download ppt "Brent GroomDavid Tran Luu Tran Presentation Topics Lease vs. Buy Comparison Sensitivity Analysis Decision Resources."

Similar presentations


Ads by Google