To analyze the main disadvantage of leasing a vehicle compared to buying a vehicle, we need to examine the various aspects involved in both leasing and buying:
1. Up-front cost:
- Option A (Buy new): [tex]$2,500
- Option B (Lease new): $[/tex]3,925
- Option C (Buy used): [tex]$2,000
2. Monthly payments:
- Option A (Buy new): $[/tex]338 for 60 months
- Option B (Lease new): [tex]$229 for 36 months
- Option C (Buy used): $[/tex]250 for 36 months
3. Length of payments:
- Option A (Buy new): 60 months
- Option B (Lease new): 36 months
- Option C (Buy used): 36 months
4. Cost of insurance and gas:
- Option A (Buy new): [tex]$275 a month
- Option B (Lease new): $[/tex]275 a month
- Option C (Buy used): [tex]$225 a month
Based on these comparisons:
- The upfront cost for leasing a new vehicle (Option B) is $[/tex]3,925, which is higher than both buying new ([tex]$2,500) and buying used ($[/tex]2,000).
- The monthly payments for leasing a new vehicle are [tex]$229 for 36 months, which is lower than buying new and buying used.
- The length of payments for leasing a new vehicle is 36 months, which matches the period for buying used but is shorter than the 60 months for buying new.
- The cost of insurance and gas for leasing a new vehicle is $[/tex]275 per month, which is the same as for buying new and higher than for buying used ($225 a month).
Therefore, the main disadvantage of leasing a vehicle compared to buying a vehicle is the up-front cost. The upfront cost for leasing a new vehicle is significantly higher than both buying new and buying used.
