Lease or Buy?

Author
Ann M. Hackert, Idaho State University
Region
North America
Topic
Accounting & Finance
Length
3 pages
Keywords
finance
personal finance
Leasing
Copyright Holder
Society for Case Research
Student Price
$4.00
Target Audience
Undergraduate Students

This critical incident involves a lease versus a buy decision for a vehicle. Although the literature in personal finance often concludes that buying is a better decision, Evan Anderson decided to analyze the issue by comparing the financial outcomes, and considering technology and safety issues. Evan realized he also needed to discuss the qualitative aspects. The critical incident articulates the valuable safety technology currently available for automobiles. The literature regarding the personal finance leasing decision focuses on costs and does not incorporate the qualitative aspects of technology and safety in the decision facing Evan. This CI shows how common knowledge affecting decisions can change over time.

Learning Outcomes
  1. Examine why an individual would consider leasing a vehicle by considering the advantages and disadvantages
  2. Calculate the financial outcomes of a purchase using a loan as compared to a vehicle lease and analyze the alternatives
  3. Explain how uncertainty and other issues that are not quantifiable affect the decision to lease or purchase the vehicle
  4. Evaluate Evan’s options and make a decision