Samuel and Grace Paganelli want to replace their 1996 pickup, which Samuel drive

Question

Samuel and Grace Paganelli want to replace their 1996 pickup, which Samuel drives for work. They already own two vehicles, but they need to replace Samuel’s truck because it has nearly 225,000 miles on the odometer. The replacement must be a vehicle that fits his job as a selfemployed electrician. Samuel knows that he drives a lot on the job and is worried about the high-mileage penalty on many leases, as well as the fees for excessive wear and tear. However, Grace is more concerned about the depreciation loss on a new truck purchase than the mileage penalty and would rather lease the new vehicle. She also likes the idea of having a new, safer truck every few years without the hassle of resale. Samuel also does not like the fact that, if they lease, they would not own the vehicle he will use for work. Warranty protection to insure the truck remains in service is very important.

They feel that they can afford to spend $550 per month over 4 years for a new vehicle, as long as their other associated expenses such as insurance, gas, and maintenance are not too high. The Paganellis also do not know where to start looking for a vehicle without the hassle of negotiating with dealerships.

For all the information available, what specific information about the different makes and models is the most relevant to Samuel and Grace in making their purchasing decision?

Explanation / Answer

The specific information that is important to Samuel and Grace are

Ideally they should collect these data from the website of the vehicle manufacturers, insurance companies and independent review sites. Next, they should provide a weight to each of these information as per their importance. The lease option and the purchase option must be handled separately and compared the annual and total cost incurred. Next the same must be done for each of their shortlisted models and then calculate the weighted average score of each vehicle.

Based on this weighted average score, Samuel and Grace should make their decision.

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