Able to negotiate a price

Reference no: EM13251813

You are able to negotiate a price for a 2014 Ford Fusion Hybrid including tax, title and registration for $20,000. The dealer is willing to lease the car at $220 per month for 60 months ($3,000 due at signing). Your current 2004 Acura TL can be sold for $6,000. You have several options – Stay with the current car (which will be worth $2,500 at the end of five years); Buy a new one with cash by liquidating stock investments that were earning an effective return of 7% per year; Borrow from Ford credit at 1% per year for five years; Lease from Ford as specified above. Assume Ford Fusion has a value of $15,000 at the end of five years. Which of these options is better if you want to minimize the monthly cash outflow? The average maintenance cost for the 2004 Acura TL is $300 per month and Ford Fusion Hybrid is $100 per month.

Reference no: EM13251813

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