MATH MODELS WITH APPLICATIONS



AQR - Weldon NAME ______________________ HOUR __________

CAR BUYING PROJECT

OBJECTIVE: Accumulate enough information to make an intelligent and fiscally prudent vehicle buying decision.

GRADES: This project will be two grades.

➢ 1 minor assessment grade

This packet completed with answers to project research and all calculations

➢ 1 major assessment grade

The major grade will be a typed paper including all of the tables and information gathered from the research.

DUE: Minor Assessment is due Tuesday April 29. Major assessment is due May 7.

STEP 1: VEHICLE SELECTION: So many selections, so little time (and money)

1. Make a list of at least two new vehicles; two used (between one and eight years old) vehicles, and a dream vehicle of your choice. The term “vehicle” includes car, truck, SUV, and mini-van. It does not include motorcycles or specialty vehicles. The first four choices must be what you can most realistically afford to buy in the next year. New vehicles will be limited to $60,000 retail price. Used vehicles will be limited to $35,000. Describe year, model, and option choices you would consider. You goal is to gather enough information to make an informed choice. If you already own a vehicle, use that vehicle as a choice to see if you did get the best possible value.

2. The objective is to compare the suggested retail price (msrp) against the invoice or wholesale price. You will create a table for each vehicle with all of the options and prices listed. You will find at least three sources of vehicle pricing information for the first four choices. Only one is required for the dream vehicle. Different web sites count as a source. For each new and used vehicle, find the retail (M.S.R.P.) and the wholesale (dealer invoice or trade-in) price. For your fifth choice, only one source is required. Calculate the mark-up and percent of markup. The comparisons will be for the vehicles most closely reflecting your choices. Note features, condition description, cost, and data source.

3. You will use your time most efficiently if you know what vehicles you want to research. Remember, you are looking for retail (MSRP, sticker, asking, market, going, etc) and wholesale (invoice, dealer cost, loan, trade in, etc) prices. This is not a “beauty contest. For new and used vehicles, my recommendation would be , and . All sites contain retail and wholesale prices. Do not use web sites where you must give personal information, will have a dealer call, or information will be delivered later by mail. This will especially be the case with new vehicles. Do not go to websites that have actual cars for sale or manufacturer’s websites. They will not give you enough information. You will first do research so you are better informed when you are ready to go shopping. These web sites will give you pretty much the same wholesale and retail pricing information for new vehicles. They will give you only a general idea of what a used vehicle would be worth in the wholesale and retail markers because the price is dependent on condition. Notice the features that decrease or increase a used vehicle’s worth. You will be better prepared to determine a vehicle’s true worth to you.

4. Fill in the tables provided. These are the recommended sites to use. There are others, but no dealerships.



➢ For new vehicles, next to “New” select “Research: Reviews and Information.”

➢ For used vehicles, next to Used, “Select “Prices, Reviews, and Inventory.” Select “Research.”



➢ For new vehicles, select “What should I pay for a new car.”

➢ For used vehicles, select “What should I pay for a used car.”



➢ For new and used, click on the Start Here button

RESEARCH Name ____________________________

New Vehicle 1: (less than $60,000) Date _________________Period ______

Year ________ Make _______________ Model ________________ Trim line _____________________

|Website used |Retail Price (MSRP) |Wholesale (trade-in Price) |

|1. | | |

|2. | | |

|3. | | |

New Vehicle 2: (less than $60,000)

Year ________ Make _______________ Model ________________ Trim line _____________________

|Website used |Retail Price (MSRP) |Wholesale (trade-in Price) |

|1. | | |

|2. | | |

|3. | | |

Used Vehicle 1: (less than $35,000)

Year ________ Make _______________ Model ________________ Trim line _____________________

|Website used |Retail Price (MSRP) |Wholesale (trade-in Price) |

|1. | | |

|2. | | |

|3. | | |

Used Vehicle 2: (less than $35,000)

Year ________ Make _______________ Model ________________ Trim line _____________________

|Website used |Retail Price (MSRP) |Wholesale (trade-in Price) |

|1. | | |

|2. | | |

|3. | | |

Dream Vehicle: (the sky is the limit)

Year ________ Make _______________ Model ________________ Trim line _____________________

|Website used |Retail Price (MSRP) |Wholesale (trade-in Price) |

|1. | | |

Fill in the table as follows. I have included an example.

| VEHICLE SELECTION |WHOLESALE COST |RETAIL COST |MARK-UP |PERCENT MARK-UP |

|1. Ford Taurus |$ 15,235.00 |$17,852.00 |$2,617.00 | |

|1. Dodge Ram Truck |$ 46,230.00 |$52,148.00 |$5,918.00 | |

1. Markup: difference between wholesale and retail cost.

2. Percent markup: markup divided by the wholesale cost. Calculate this to the nearest tenth of a percent.

MARK-UP AND PERCENT OF CHANGE

| |Vehicle Selection |Wholesale Cost |Retail Cost |Mark-Up |Mark-Up % |

|New Vehicle 1 | | | | | |

|New Vehicle 1 | | | | | |

|New Vehicle 1 | | | | | |

|New Vehicle 2 | | | | | |

|New Vehicle 2 | | | | | |

|New Vehicle 2 | | | | | |

|Used Vehicle 1 | | | | | |

|Used Vehicle 1 | | | | | |

|Used Vehicle 1 | | | | | |

|Used Vehicle 2 | | | | | |

|Used Vehicle 2 | | | | | |

|Used Vehicle 2 | | | | | |

|Dream Vehicle | | | | | |

Of all 12 pricings, which of your vehicles has the greatest percent of mark-up? ________________

Of all 12 pricings, which of your vehicles had the least percent of mark-up? _________________

Compare your research and pick one new, and one used vehicle. What is the retail cost of your final selection for each type vehicle?

Your final choice NEW ___________________________________ retail cost _______________________

Your final choice USED ___________________________________ retail cost _______________________

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