Business, 04.07.2019 05:30 iandadude

Has decided that he needs a new car. he has found the model and color he wants for a purchase price of $25,838. to buy the car, he must put 10 percent down, and his loan is for five years with an interest rate of 4.4 percent. his payments are $432.46. to lease the car, he can sign a three-year contract with payments of $290. he needs to provide $1,500 up front to pay initial fees and his first month's payment. his annual mileage cannot exceed 15,000 miles. what are the disadvantages if jamir decides to purchase the car? check all that apply. he will not get the model he wants. he will have to come up with a bigger down payment. his monthly payments will be higher. he will have to return the car when he is done making payments. the purchase price will be higher.

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Answer from: nkslsj

He will have to come up with a bigger down payment

His monthly payments will be higher.

If Jamir leases the car, his down payment will be $1500.

If he purchases the car, his down payment will be 10% of purchase price which will be $\frac{10}{100} *25,838 = $2583.80$ .

Hence his down payment will be higher if he purchases the car.

If Jamir leases the car, his monthly payments will be $290, as against the monthly payment of $432.46, which is higher.

Answer from: Mexicochan

If Jamir decides to purchase the car:

He will have to come up with a bigger down payment. His monthly payments will be higher.What is leasing and how does it differ from buying?

Leasing is an arrangement in which the owner of an asset allows the other person to use the asset in return for recurring payments. It is an acceptable option when the asset is expensive and the buyer intends to use it for a shorter period.

The monthly payments of the lease are less than the payments when buying. Indeed buying allows immediate ownership of the asset.

In the given case, if Jamir buys the car the downpayment will be 10 percent of the cost of the car which is approximately $2,584. On the other hand, if he leases the same, the downpayment will be $1,500.

Therefore, if he desires to purchase the asset, he has to pay a higher downpayment.

The monthly payment in case of purchase is $432.46 which is higher than that of in lease. Therefore, purchasing the car would result in higher monthly payments.

Hence the correct options are b and c.

Learn more about leasing here:

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Answer from: Quest

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