To address this question, we need to compare the total costs associated with each option provided: buying new, leasing new, and buying used. We will break down the costs for each option:
### Option A: Buy New
- Monthly Payment: \[tex]$338 for 60 months
- Total Monthly Payments: \(338 \times 60 = 20,280\)
- Upfront Cost: \$[/tex]2,500
- Insurance and Gas: \[tex]$275 per month for 60 months
- Total Insurance and Gas Cost: \(275 \times 60 = 16,500\)
Total Cost (Option A):
\[ 20,280 (\text{total monthly payments}) + 2,500 (\text{upfront cost}) + 16,500 (\text{insurance and gas}) = 39,280 \]
### Option B: Lease New
- Monthly Payment: \$[/tex]229 for 36 months
- Total Monthly Payments: [tex]\(229 \times 36 = 8,244\)[/tex]
- Upfront Cost: \[tex]$3,925
- Insurance and Gas: \$[/tex]275 per month for 36 months
- Total Insurance and Gas Cost: [tex]\(275 \times 36 = 9,900\)[/tex]
Total Cost (Option B):
[tex]\[ 8,244 (\text{total monthly payments}) + 3,925 (\text{upfront cost}) + 9,900 (\text{insurance and gas}) = 22,069 \][/tex]
### Option C: Buy Used
- Monthly Payment: \[tex]$250 for 36 months
- Total Monthly Payments: \(250 \times 36 = 9,000\)
- Upfront Cost: \$[/tex]2,000
- Insurance and Gas: \[tex]$225 per month for 36 months
- Total Insurance and Gas Cost: \(225 \times 36 = 8,100\)
Total Cost (Option C):
\[ 9,000 (\text{total monthly payments}) + 2,000 (\text{upfront cost}) + 8,100 (\text{insurance and gas}) = 19,100 \]
Given these calculations, let's determine the main disadvantage of leasing a vehicle compared to buying one:
- Upfront Cost: The upfront cost for leasing (\$[/tex]3,925) is higher than buying used (\[tex]$2,000) and buying new (\$[/tex]2,500).
- Monthly Payments: The monthly payment for leasing (\[tex]$229) is lower than buying new (\$[/tex]338) and close to buying used (\[tex]$250).
- Length of Payments: Leasing payments (36 months) are shorter than buying new (60 months) but equal to buying used (36 months).
- Cost of Insurance and Gas: The insurance and gas cost for leasing and buying new are the same (\$[/tex]275 per month), and both are higher than buying used (\$225 per month).
Conclusion: The main disadvantage of leasing a vehicle compared to buying (either new or used) is the up-front cost.
