To determine the main disadvantage of leasing a vehicle compared to buying a vehicle, let's analyze the given data step-by-step and compare the different transportation options:
### Option A: Buying a New Car
- Monthly Payment: \[tex]$338 for 60 months
- Upfront Cost: \$[/tex]2,500
- Insurance and Gas: \[tex]$275 per month
- Duration: 60 months (5 years)
### Option B: Leasing a New Car
- Monthly Payment: \$[/tex]229 for 36 months
- Upfront Cost: \[tex]$3,925
- Insurance and Gas: \$[/tex]275 per month
- Duration: 36 months (3 years)
### Option C: Buying a Used Car
- Monthly Payment: \[tex]$250 for 36 months
- Upfront Cost: \$[/tex]2,000
- Insurance and Gas: \[tex]$225 per month
- Duration: 36 months (3 years)
### Costs Summary from the Full Payment Term Considered
From the calculations provided:
- Option A: Total Cost: \$[/tex]39,280 (for 60 months)
- Option B: Total Cost: \[tex]$22,069 (for 36 months)
- Option C: Total Cost: \$[/tex]19,100 (for 36 months)
### Analysis of Disadvantages
1. Upfront Cost:
- Option A (Buying New): \[tex]$2,500
- Option B (Leasing New): \$[/tex]3,925
- Option C (Buying Used): \[tex]$2,000
- Disadvantage: Leasing has a higher upfront cost compared to both buying new and buying used cars.
2. Monthly Payments:
- Option A (Buying New): \$[/tex]338
- Option B (Leasing New): \[tex]$229
- Option C (Buying Used): \$[/tex]250
- Disadvantage: Leasing has a lower monthly payment compared to buying new and is cheaper than buying used, hence not a disadvantage in this context.
3. Length of Payments:
- Option A (Buying New): 60 months
- Option B (Leasing New): 36 months
- Option C (Buying Used): 36 months
- Disadvantage: Leasing requires payments for a shorter duration, hence not a disadvantage in this context.
4. Cost of Insurance and Gas:
- Option A (Buying New): \[tex]$275 per month
- Option B (Leasing New): \$[/tex]275 per month
- Option C (Buying Used): \[tex]$225 per month
- Disadvantage: The cost of insurance and gas is the same for leasing and buying new, and higher than buying used. However, this is not specific to leasing versus buying new but reflects a general difference between new and used cars.
### Conclusion
The main disadvantage of leasing a new vehicle compared to buying a vehicle, whether new or used, is:
the up-front cost
Leasing a vehicle incurs a higher upfront cost (\$[/tex]3,925) compared to buying a new car (\[tex]$2,500) or a used car (\$[/tex]2,000).
