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Costs of Buying a Car Part 1 (in the future)

Costs of Buying a Car Part 1 (in the future). Because you will likely need/want to drive places. How does buying a car Affect your personal Budget? What are some things About a car you might consider when buying a car?. Challenge:. What are some costs you might consider when buying a car?.

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Costs of Buying a Car Part 1 (in the future)

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  1. Costs of Buying a Car Part 1(in the future) Because you will likely need/want to drive places.

  2. How does buying a car Affect your personal Budget?What are some things About a car you might consider when buying a car?

  3. Challenge: What are some costs you might consider when buying a car?

  4. Costs of Owning & Operating a Car Ownership Fixed Costs Operating Variable Costs Paying Off Car (depends on original cost) Interest on Loan Insurance Registration Fee, License, Taxes Gas Oil & other fluids Tires Maintenance & Repairs Parking & Tolls How much do you think each of these costs actually cost? (estimate)

  5. For a Hyundai Accent?

  6. How much can you Afford? Follow the 20-10 Rule… • Never borrow more than 20% of your yearly net income. • Monthly payments should never exceed 10% of your monthly net income. Ex. What does this mean if you make $400 a month?

  7. Challenge: What are some questions you should ask yourself when buying a Used car?

  8. Where to Shop for a Used car… New Car Dealers: • Quality Used Vehicles • Service Dept. Available • Usually More Expensive Used Car Dealers: • Specialized in Used Vehicles • Limited Warranties (if any) • May be in Poor Condition Private Parties • Good Buy if Vehicle Well-Maintained • Few Consumer Protection Regulations Apply

  9. Things to Consider when shopping for a car… Before you shop: • Decide how much you can afford to spend • Decide on model and research reliability • Find out where repairs can happen and if parts are available • Shop for financing and determine costs/payments As you shop: • Find out reputation of the dealer • Find out about types of warranties and service deals

  10. Challenge: What do you have to find out about a loan?(What do you remember about calculating loans?)

  11. Shopping for a car loan Variables include: • Annual Percentage Rate (APR) • Length of Loan • Monthly Payments • Total Finance Charge • Total to be Repaid

  12. Estimating the Cost of a Loan Interest = Amount of Loan x APR x Number of Years Total Cost of Loan = Amount of Loan + Interest Ex. Estimate the total cost of a $10 000 loan at 10% APR for 5 years.

  13. Estimating the MONthly Payments Monthly Payments = Total Cost of Loan ∕ Total Number of Months Ex. Estimate the monthly payments for the previous loan Do you think these calculations are accurate? Why or why not?

  14. Assignment: Determining a BudgetWhat can Manuel Afford?What Can YOU afford?

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