Introduction

You are 33 and you love your old car. It has served you well, but unfortunately it doesn't meet your expectations any more. You wish you could buy a sports car, but you have to be realistic. You have an average job, so you cannot afford an expensive car. The only options that you have are a “small/compact car”, a “mid-size sedan” , a “minivan”, or a “small SUV”.

When buying a car you must keep in mind the gas prices as well. You also want to start a family in the near future.

 

You are certain that you will keep your new car for the following 5 to 6 years. Please think about choosing one of the above vehicles. Which one should you consider?

You equally like any one of these cars; therefore your decision will only be based on price. You checked out their prices and the dealers offer three types of purchase: cash, leasing and financing. You have no savings to buy the car, so your only possibilities will be either to lease or finance it. You should analyze the lease or the financing only as a price option (other arguments are not the purpose for our project).

A friend of yours bought a 4 year-old car at 70% of the market price. Buying a previously-owned car would also be an option, but you don't have the necessary cash. The only viable option is to borrow money from a bank, but bank interest rates are higher than any dealer's.

So do the necessary calculations and see which car would be the best fit for you.