Advantages of Buying
• Long-term investment
• Stability
• Pride of ownership
• Tax deductions
Advantages of Renting
• Location flexibility
• No down payment
• Less freedom to renovate
• Rent increases
Disadvantages of Buying
• Danger of eviction
• Repair and maintenance costs
• Property taxes
Disadvantages of Renting
• No long-term investment
• Lack of stability
• No pride of ownership
• No tax deductions
Here are some key components to consider when you are weighing your options to either rent or
buy a home. Fill in the chart by placing each of the following in the appropriate box: (11 marks)
• Danger of eviction
• Less freedom to renovate
• Location flexibility
• Long-term investment
• No down payment
• Stability
• Pride of ownership
• Property taxes
• Rent increases
• Repair and maintenance costs
• Tax deductions
Advantages of Buying Advantages of Renting
Disadvantages of Buying Disadvantages of Rentin
3 answers
If you plan to keep the car longer than 60 months, why would purchasing the car be a better
financial decision than leasing the car? Include a discussion of equity in your answer.
financial decision than leasing the car? Include a discussion of equity in your answer.
If you plan to keep the car longer than 60 months, purchasing the car would generally be a better financial decision than leasing. This is because when you purchase a car, you have the opportunity to build equity over time.
Equity refers to the value of an asset that you own outright, minus any outstanding debts or loans against that asset. When you finance a car purchase, each monthly payment you make goes towards paying off the principal amount of the loan. As you make these payments, the amount of equity you have in the car increases.
On the other hand, when you lease a car, you are essentially renting it for a fixed period of time, usually between 24 to 48 months. At the end of the lease term, you have no ownership stake in the vehicle. You have essentially made payments towards the use of the car, but you do not build any equity.
By purchasing the car instead of leasing, you have the potential to build equity over time. As you continue to make payments towards the principal amount of the loan, you gradually increase your ownership stake in the vehicle. This means that if you decide to sell the car in the future, you can potentially recover some of the money you paid for it, depending on its market value.
Additionally, owning a car allows you to use it as collateral for future loans or trade-ins. This can be particularly advantageous if you need to borrow money in the future or if you want to upgrade to a new vehicle.
Overall, if you plan to keep the car for longer than the lease term, purchasing the car allows you to build equity and potentially recover some of your investment when you decide to sell it. Leasing, on the other hand, does not give you the opportunity to build equity, as you are essentially renting the car for a fixed period of time.
Equity refers to the value of an asset that you own outright, minus any outstanding debts or loans against that asset. When you finance a car purchase, each monthly payment you make goes towards paying off the principal amount of the loan. As you make these payments, the amount of equity you have in the car increases.
On the other hand, when you lease a car, you are essentially renting it for a fixed period of time, usually between 24 to 48 months. At the end of the lease term, you have no ownership stake in the vehicle. You have essentially made payments towards the use of the car, but you do not build any equity.
By purchasing the car instead of leasing, you have the potential to build equity over time. As you continue to make payments towards the principal amount of the loan, you gradually increase your ownership stake in the vehicle. This means that if you decide to sell the car in the future, you can potentially recover some of the money you paid for it, depending on its market value.
Additionally, owning a car allows you to use it as collateral for future loans or trade-ins. This can be particularly advantageous if you need to borrow money in the future or if you want to upgrade to a new vehicle.
Overall, if you plan to keep the car for longer than the lease term, purchasing the car allows you to build equity and potentially recover some of your investment when you decide to sell it. Leasing, on the other hand, does not give you the opportunity to build equity, as you are essentially renting the car for a fixed period of time.
1 answer