You are going to 'Buy' a new car
You are going to "Buy" a new car (not used). You will go through the entire process from choosing a car, getting rid of your old car, researching your decision, and closing the sale.Your budget (10-15% of monthly income) is $344-516Highlight each of the following in a different color if it is extremely important to you in your car purchase. Auto Transmission2 door 4 doorGas EfficiencyCargo CapacitySeating CapacityTowing CapacityLeather SeatsPower SeatHeated SeatsEngine Size Anti-lock BrakesCruise ControlAir ConditioningRemote Keyless StartRear Wheel DriveFront Wheel DriveFour-Wheel DriveCD PlayerMP3Integrated Bluetooth Phone Navigation SystemDVD SystemAlloy WheelsDual AirbagsSide Curtain AirbagsAnti-theft SystemSun Roof/Moon RoofPower Exterior MirrorsWarrantyAdd other important options here:Find two cars that are within your budget, and meet all or most of your important features listed above. They should be the same TYPE of car, made by competing companies! I suggest using Car #1: 2014 Jeep Patriot- $256/mo.Car #2: 2014 FIAT 500L-$296/moBased on your own personal preferences, which of these two cars would you buy? Why?I would pick Car #1 the 2014 Jeep Patriot. It’s safe how I like, gas efficient, has air conditioning and heating, remote keyless start and anti-theft system.Read at least 5 reviews found online for each car. Reviews are written by people who already own the car or by expert car reviewers. Find at least 5 of these types of reviews for each of your two cars. Write a short reflection based on what you read in the reviews below: (Don't make your decision yet; you still have some number crunching to do.) Good Website: click on Car Reviews at the top and choose consumer reviews. Based only on what you read in the product reviews, which of the two cars would you buy? Why?I’d pick Car #2 because it had higher reviews than the Jeep Patriot.Use to find the answers to the following questions about the two cars you have chosen to compare. Click on the Car Values link at the top and choose What Should I Pay for a New Car. Look up your two cars. Choose the newest year, the correct style, and the options you would like.What is the Fair Purchase Price including options? Car #1: $19,167Car #2: $19,045Now take the Fair Purchase Price times 5% state sales tax. Use the formula at the right to find these figures.-22860023495Cost of Car #1 to you$20,12500Cost of Car #1 to you$20,125171450023495Cost of Car #2 to you$19,99700Cost of Car #2 to you$19,997Fair Purchase price X 1.05 sales taxesCost of Car to youYou will follow the instructions on the next page to find out how much you will spend TOTAL on owning this vehicle over the next 5 years.Click on the link on the left side of the screen that says 5-Year-Cost-to-Own.Customize the Car’s 5-Year-Cost-to-Own, by imputing your average miles driven per year. For example, I drive only about 10,000 miles per year. Set the % APR at 5% for 60 months with a $0 down payment.What is the 5-Year-Cost-to-Own?Car #1: 5 year = $31,492 / Per Mile = $0.42Car #2: There was no 5 year owning price listed on the websiteWhat is your old car? Year: 2001Make: BuickModel: RegalMileage: 35,000Explain the condition of your old car:It’s a nice car, it’s had work done to the starter, and the leather seats have stains on them but no cuts.Let's assume that your old car is paid off. Use (click on Car Values tab at top, and choose what’s My Current Car Worth?) to find the following answers. out how much it is worth for trade in $ $1,772Find out how much it is worth if you attempt to sell it yourself (private-party value) $2,384From the previous page, take the cost of each car to you, and deduct the amount of your trade in to find out how much you will owe on each car. 2286000160020Cost of Car to You minus Trade in for Car #2$19,997-$1772=$18,22500Cost of Car to You minus Trade in for Car #2$19,997-$1772=$18,2250160020Cost of Car to You minus Trade in for Car #1$20,125-$1772=$18,35300Cost of Car to You minus Trade in for Car #1$20,125-$1772=$18,353Based on Fair Cost only, which of the two cars would you buy? Why? I’d probably buy Car #2.Now, let's assume that you are going to get financing to pay for the balance, and you have no money to put down. You are able to obtain financing at 5% APR. Use any auto loan calculator (I like using the What Would My Auto Payments Be? Calculator) to find out how many your payments would be on each car over each period of time:# of PaymentsAfter Trade-In Payment amount of Car #1After Trade-In Payment amount of Car #224$14,102$14,004 36$9634$9,567 48$4937$4,903 60$0$072$0$0Which car do you choose based solely on monthly payments?I’d pick car two because its cheaper monthly$14,004How many payments are you able/willing to make on this car?Considering personal preference, price, 5-year-cost-to-own, monthly payments, and product reviews, which car do you choose to buy? Why? ................
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