Microeconomics: Decision on Buying a Car

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Microeconomics: Car Decision Whether to lease/finance a new/used luxury/economy car is a question that looms in the minds of many. The answer simply depends upon the current market conditions and the needs of the consumer. Financing can be prudent for some, while others may benefit from a leasing situation. Automobile market prices may still be out of reach for many who prefer luxury to an economy car. Additionally, factors and costs must be considered, such as return of investment, return on investment, interest rates, price to rent ratio, pros and cons of leasing, pros and cons of financing, insurance, gas consumption, and depreciation. In the end, car decisions have much to do with one's own interests and personality. The answer is rather relative as oppose to an absolute or universal decision. Hence, a strategy to lease/finance a new/used luxury/economy car for one person may not be a prudent strategy for another. New vs. Used Are new cars better than used cars? Well, it depends. The average used car costs less than half the average new car. Therefore, it is no surprise that used cars outsell new cars 3-to-1. Typically, used cars are a better value. Not only are they cheaper, but also depreciation is less of a factor (someone else had to lose 10% to 20% of the car's value when they drove it out of the dealership lot). However, now a perfect storm of events in the industry have put monthly payments for some new vehicles on par with (or, in some cases, even less
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