Vinh Thu Lieu Organizer

1
Team 2

• Vinh Thu Lieu Organizer
• Qi Xu Summarizer
• Manuel Gutierrez Techie

2
Scenarios

• Buying Vs. Leasing a Vehicle.
• BMW 3-Series 325Ci Convertible
• Good Entry Level Sport Car
• Reliable
• Good Resale Value (approx.
• Depending on the Used Cars
• Comfortable and Great Looking Car
• MSRP 40,295
• Selling Price 36,750
• What should he do?

3
Course of Action 1

• Buying a Car
• Down Payment 2500
• Excellent Credit ARP at 6.65
• - 3 Year fixed APR Performance Loan
• Monthly Payment 1139

4
Course of Action 2

• Leasing a Car
• Annual mileage 12,000 miles/year
• - 3 Year Terms
• Down Payment 2500
• Monthly Payment 494

5
Annual Worth Analysis
BMW 3-Series 325Ci Convertible
Buy Cash Flow Diagram
Lease Cash Flow Diagram
6
Sensitivity Analysis

• Varies Down Payment
• Varies the Financial Period (Terms)
• Over Mileages Cost
• Buying vs. Leasing

7
Down Payment Analysis
8
Financial Period and Mileage Analysis
9
Decision

• Down payment 2500 (Selling Price 36750)
• 3 years financing
• Keep the Car
• Total Cost 40,999.10 (Buy)
• Total Cost 42,763.70 (Lease)
• Dont Keep the Car
• Total Cost 14924.22 (Buy)
• Total Cost 17780.80 (Lease)
• Difference 2856.60
• Buying is the best choice here

10
Advantages and Disadvantages of Buying

• Advantages can modify your car in whatever
  manner you choose , there are no mileage
  restrictions, You can drive as many miles, you
  have the flexibility of selling the car whenever
  you want
• Disadvantages As warranty expires and you
  experience mechanical problems with the vehicle,
  you're responsible for the repair costs. As
  vehicle gets older, you can expect to incur
  repair and maintenance costs , Cars depreciate in
  value while depleting your liquid cash in the
  process

11
Advantages and Disadvantages of Leasing

• Advantages leasing provides an opportunity for
  people to drive more expensive vehicles for less
  money each month, leasing allows consumers to
  drive a new vehicle every few years, Leasing
  helps consumers avoid the hassles often
  associated with selling their used car to an
  independent third party or trading in their
  vehicle to a local dealer
• Disadvantages most vehicle leasing programs have
  a yearly mileage limit, leased vehicles usually
  require higher insurance limits, Lease contracts
  can be difficult

12
Resources

• http//www.nada.com/ ( Vehicles pricing, Tip and
  advising about lease vs. buy )
• www.bmwusa.com ( vehicles about the chosen car )
• http//forums.mwerks.com/zerothread?cmdprintid7
  94813 ( formula for lease )
• Text Books (Present Worth Analysis)