To determine whether buying or leasing is less expensive, we need to calculate the total costs of both options over the three-year period and compare them. Let's break this into steps:

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1. Buying the Car

• Purchase price: $33,100
• Residual value (sale price after 3 years): $20,600
• Total cost for buying: $\text{Total Cost} = \text{Purchase Price} - \text{Residual Value}$ $\text{Total Cost} = 33,100 - 20,600 = 12,500$

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2. Leasing the Car

• Down payment: $3,000
• Monthly payments: $380 for 36 months (3 years): $\text{Total Lease Payments} = 380 \times 36 = 13,680$
• Residual value (to purchase at the end of the lease): $20,600

Case A: Not Buying the Leased Car at the End

• Total lease cost: $\text{Total Cost} = \text{Down Payment} + \text{Total Lease Payments}$ $\text{Total Cost} = 3,000 + 13,680 = 16,680$

Case B: Buying the Leased Car at the End

• Total cost if you purchase at the end: $\text{Total Cost} = \text{Down Payment} + \text{Total Lease Payments} + \text{Residual Value}$ $\text{Total Cost} = 3,000 + 13,680 + 20,600 = 37,280$

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Comparison

1. Buying: $12,500
2. Leasing (not buying the car at the end): $16,680
3. Leasing (buying the car at the end): $37,280

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Conclusion

• Cheapest Option: Buying the car outright is less expensive at $12,500.
• Leasing (even without buying the car at the end) is more costly, at $16,680.

If your goal is to minimize costs, buying the car outright is the better choice.

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Do you have any questions, or would you like further details?

Here are five related questions to expand this analysis:

1. How do interest rates affect the cost of financing the purchase?
2. What are the potential maintenance costs of buying versus leasing a car?
3. How does depreciation impact the car's resale value over time?
4. Can leasing provide benefits beyond costs, such as flexibility or warranty coverage?
5. What factors should you consider in deciding whether to keep or sell a car after three years?

Tip: When comparing long-term costs, always consider hidden costs like insurance and maintenance!