Should Clancy lease or purchase?

Clancy is considering the purchase of a Ford F$-150$ Pickup and has negotiated a final price of $$27,690.$ He's trying to decide whether to

lease or purchase the vehicle.

If he leases, he'll have to pay a $$600$ security deposit, a capital cost reduction $($down payment$)$ equal to $10\%$ of the vehicle's

cost$,$ and monthly payments of $$491$ over the three$-$year term of the closed$-$end lease. The truck will have a residual value of

$$11,076.$

On the other hand, if he buys the truck, he'll have to make a $10\%$ down payment, pay sales tax equal to $8\%$ of the vehicle's

price, and make monthly payments of $$736$ on a three$-$year loan that charges $4\%$ interest.

Be aware that funds used as down payments and security deposits incur an opportunity cost of $5\%,$ as they could have earned

interest for Clancy over the period of the lease or loan.