Question

Identify the decision-making factors in lease versus buy.

Answer 1

Decision making factors in Lease vs Buy are as follows-

1. Cost is an important factor in decising making between leasing or buying as people often want to pay less and mostly select the option which requires the minimum payout.Lease require minimum initial payment so less costly.

2.Life plans are an important factor while decision making as There are persons who always want to buy because they are more intended towards ownership and they buy than lease.

3.Risk reward:Risk and rewards are important factor while decision making between lease and buying.There are always high risk takers who wants higher rewards and go for buying than leasing.

4.Term:It is always important to know wheather capital investment is made for short term or long term.Duration becomes an important factor while deciding between wheather to lease or buy.

5.Tax benefits:Tax benefits associated with leasing and buying are different for different duration.Lease payments are tax deductible ,while Buying is not provided with tax deduction.