Advanced Engineering Economics
The skyrocketing gas prices, environmental impact, and reducing long term dependence on oil are some of the few issues which have really pushed both the consumers and the vehicle makers to consider vehicles powered with alternate sources of energy such Hydrogen Gas, Fuel cell, Hybrid Battery and Gasoline powered, and finally Battery only powered or also known as Electric vehicle. Of the above mentioned options Electric Vehicles are widely popular (trending) in the current vehicle purchase market. In this report an attempt has been made to explore both lease and buy options and make a recommendation as to which one would be a better alternative for the consumer in said vehicle. The results of economic analysis show that, it is generally better to lease the vehicle at lower APR and when the lease period is shorter. On the other hand, it is better to buy the vehicle at a higher APR than to lease it, since leasing will make one pay almost as high in interest as the one buying the vehicle. It was also shown that since the market fluctuation for used vehicles is uncertain, it is more risky to buy the vehicle if one intends to use it for a shorter period, since vehicles generally depreciate quicker in the first few years -‐ being able to sell it for an anticipated market value might be difficult.
Sie, Felix; Chintala, Pratheek; Chhatre, Purva; Viswanatha, Raghunath; and Kancherla, Yasaswi Deepak, "Economic Evaluation of
Lease vs Buy Option For Electric Vehicles
(EV)" (2015). Engineering and Technology Management Student Projects. 199.