When it’s time to purchase a car you have many choices to make.

Should you buy a new or used car? Can you afford

to pay cash or should you get a car loan? Some people lease their cars. Which option is right for you?

Before you buy or lease a car, do your homework. Once you buy a car you cannot bring it back because you found a
better deal. You can re-sell it, but for a much lower price because of depreciation. Once you sign a lease agreement
you cannot return the car without fulfilling the agreement or paying a heavy fine.

In this web quest you will explore advantages and disadvantages of buying versus leasing a car and present your
findings. ​Do not give out your personal information during your research!

1. Write a paragraph about your dream car. How much do you think this car will cost? (2 points)

2. What are the top five things most important to you in a car? (2 points)

3. Visit the website ​http://www.bankrate.com/calculators/auto/lease-buy-car.aspx​ and enter the

following information (we will omit some information to simplify calculations):

Vehicle Information:
● The estimated vehicle price
● Downpayment (should be about 15% of the total car price)
● Sales Tax – 7%

Buy Option:
● APR – 3.5%
● Loan Term: 36 months
● Interest Rate: 3.5%
● Annual Depreciation 15%

Lease Option:
● Lease Term: 36 months
● Interest Rate: 3.5%
● Residual Percent: 60%
● Security Deposit: $500

Module 4 – Performance Based Assessment

Make a screen shot of the information entered and calculated monthly payment for each option. Insert your
screenshot below. Which is a better deal best on your calculations? (6 points)

4. The calculations above can give you a rough idea of how the cost of leasing compares to buying a car.
We had to make many assumptions and omit some information. Visit a few websites (see resources at
the end of the worksheet) and identify 3 additional factors that we did not consider in our calculations
but are very important to understand before you make a decision. Explain, why they are important. (6
points). Must include your 3 sources.

5. What personal factors can help you decide to lease or to buy? Identify at least 2 factors. (2 points)

Resources

Below are some resources from credible resources. You can use your own resources as well. To receive full
credit you have to use and list more than 3 sources.

http://www.themoneyalert.com/leasingvsbuyingacar.html

http://www.ehow.com/about_5387246_leasing-car-vs-buying-car.html

http://www.money-zine.com/Financial-Planning/Leasing-or-Buying-a-Car/Lease-vs.-Buying-a-Car/

http://www.consumerreports.org/cro/2012/12/buying-vs-leasing-basics/index.htm

Module 4 – Performance Based Assessment