CONSUMER PURCHASING



CONSUMER PURCHASING

“The Four Phases in Buying a Car”

(25 Competency Points)

Phase 1: Before You Shop (3 points)

What car classification?

|Hybrid |Truck/SUV |Luxury |Family Sedan |Sports Car |Other? |

|List the other here: |

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Please list 3 cars below you may consider to purchase. The three cars you choose to compare must be similar in class—meaning—if you wished to buy a truck, you could look at the Chevy Silverado 1500, Ford 150, and Dodge 1500.

|Make: |Make: |Make: |

|Model: |Model: |Model: |

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|Year: |Year: |Year: |

Phase 2: Weighing the Alternatives (10 points)

Price:

Options: (Compare/Explore | Compare Cars)

(New Cars | Compare)

Ratings: (Ratings are out of 5)

(Car Reviews, Consumer Ratings—ratings are out of 10)

|Car(s): |Options: (at least 10 options) |Price: |Rating: |

|Example |6.0 V8 Engine, 4x4 |MSRP=37,500 |9.3 Consumer Rating |

|2007 Chevy Silverado |6 Speed Automatic Transmission, Tow/Haul Mode |Invoice=32,500 |Could be out of 5 as|

|2500 HD Crew |Dual Climate Zones | |well…just indicate |

| |OnStar and XM Radio | |that. |

| |Folding/Heated Mirrors | | |

| |Bedliner | | |

| |Premium Sound w/CD Player and remote | | |

| |Power Windows, Power Locks, Power Mirrors | | |

| |Integrated Trailer Brake | | |

| |100,000 miles or 5 year power train warranty | | |

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Phase 3: Making the Purchase (7 points)

What Car Will You Buy? Why? (at least two sentences)

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What will be Your Settling Price on This Car? (3 percent above invoice—show me your math!)

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How Much Money Will You Put Down? (Take the settling price and multiply it by 20 percent)

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How Much Money Will You Have to Borrow? (Take the settling price and subtract the down payment)

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What are Your Monthly Payments? (Google search a car loan calculator--60 payments/5 years--use 7 percent as your interest rate, use the amount borrowed)

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How much will your loan really cost you IN INTEREST? (Show your math...payment amount multiplied by 60—take the original amount you borrowed and subtract it from the payments multiplied by 60 sum)

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Phase 4: After the Purchase (5 points)

What will be the Maintenance Costs for Your Car. Please specify whether it is a monthly and or yearly cost. ( | 5-Year Cost to Own | Add Repairs & Maintenance)

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What will be the cost for monthly fuel consumption? (1,000 miles per month is average | miles driven per month divided by miles per gallon times current price per gallon—show me your math!)

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Do You Think Your Car Will Hold It’s Value? Research your car’s Blue Book value if it’s 5 years old—compare it to your other two choices. Which one is worth the most at the end of 5 years? Show your math. Please follow the below example and recreate the chart and explain what vehicle held its value the best.

Example:

|Item |Description |Chevy 2500 |Ram 2500 |Ford 250 | | |

|New Price |Settling Price of New | $ 46,500 | $ 46,200 | $ 48,500 | | |

|5 Year Old Price |Suggested Retail of Old | $ 31,250 | $ 32,300 | $ 29,780 | | |

|Depreciation |New minus Old | $ 15,250 | $ 13,900 | $ 18,720 | | |

|Depreciation Percentage |Depreciation divided by New |33% |30% |39% | | |

|**The Dodge Ram held its value the best over a 5 year period because it has the lowest rate of depreciation. The worst choice as far |

|as depreciation is concerned is the Ford 250. The Chevy 2500 was near the Dodge but lost just 3 percent more in a 5 year span. |

|Item |Description | | | | | |

|New Price |Settling Price of New | | | | | |

|5 Year Old Price |Suggested Retail of Old | | | | | |

|Depreciation |New minus Old | | | | | |

|Depreciation Percentage |Depreciation divided by New | | | | | |

|Explanation: |

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