Car Project - MBF3C and MAP4C



Part 2: Purchasing a Car (Worth 6% of the Task)

Based on the career you chose in Part 1) and your annual salary, choose a car that you can AFFORD to make payments on. The vehicle you choose should be practical and affordable, but it should still be something you like, that is important too (

Part A: Costs associated with owning a vehicle

Look at some websites of different car dealerships. Choose a new vehicle that you might like to own in the near future (not a used vehicle or one that you already own). You should try to be realistic (don’t get carried away). It should be the current model year of the car, or possibly last year’s model, but not used.

Make: _ Model: __________ Year:

Additional Features:

Insurance

Go to the website . Follow the links to get an insurance quote. Use the information based on the car you selected. Use your own personal information as much as possible. Example: If you don’t have a license, pretend you do! You may pick whatever coverage you would like. Assume you are the only driver on the car. It will ask you at the end to provide an email address so they can send you the quote. You can put in a fake address and calculate the quote then close your browser and nothing will be sent to you.

a) What are some of the major factors they consider when giving an insurance quote?

b) What was your quote?

c) Based on the factors that are considered, describe a scenario of someone who might have a very high insurance quote.

Gasoline

The price of gas and the fuel economy of a vehicle are important things to consider when choosing a car.

a) Estimate the price of gas per litre today (Try )

b) What size gas tank does the car you have chosen have? (You may have to look it up)

c) How much would it cost to fill this tank, based on today’s price?

d) Look up the fuel consumption for your car. It will be given as litres per 100km. There should be a value for city, and for highway driving.

In the city: _____________

On the highway: ______________

e) Suggest why you might get better fuel efficiency on the highway.

f) Choose a destination in Canada that you would like to drive to.

Use to determine the distance in km to get there.

Final Destination: Distance:

g) If the whole way was highway driving, how many litres of gas would you need to get there?

h) How much would this cost, based on today’s price of gas?

Other Expenses

1. There are other expenses associated with owning a car, other than the payment, gas and insurance. What about maintenance, repairs, oil changes?

a) How often is it recommended to get an oil change?

b) Use the internet or ask someone who may know the price for a basic oil change. Be sure to include tax. You can choose any place that does them.

c) If you drive and average of 25000km per year, how much will you spend on oil changes?

2. You also need to insure your license plate sticker and license are up to date.

a) When and how often do you need to purchase a license plate sticker?

b) How much does it cost?

c) Where can you get it from?

d) How often do you have to get a drive clean emissions test?

e) How much does it cost?

Part B: Financing the Car

1. Make a bill for the car you choose on page 1. Most of this information should be available on the dealer website. If you are having any trouble finding the information, please ask (

Base price: $ _______________

Cost of all options: $ ____________

Other costs (freight, PDI) $ ___________ (estimate if you don’t know or come ask)

HST 13%: $___________

Total: $_____________

2. Suppose you have $5000 to use as a down payment on the car you are financing.

a) Find the amount you will need to finance by subtracting the down payment from the total price of your car.

b) Use the interest rate for financing that the car company is offering at this time. If you are unable to find it on their website, please let me know ( Assume it is compounded monthly, and you will pay it off over a 5 year term. Use the TVM solver on the graphing calculator to determine what your monthly payments will be.

N

I%

PV

PMT (this is what you are finding)

FV

P/Y

C/Y

PMT: END

The monthly payment for my vehicle will be:

c) At the end of the 5 year term, how much will you have paid in total? (Don’t forget to include the $5000 down payment.)

d) How much have you paid in interest?

Understanding Depreciation:

A car depreciates in value the most during its first year. Here is a chart that shows the typical depreciation rate of a car.

|Time |Depreciation (% of previous year’s value) |

|1st year |30% |

|2nd year |15% |

|3rd year |15% |

|4th year |10% |

|5th year |8% |

Use this chart to figure out how much your car would be worth after each of the first five years. Fill your answers in at the bottom and make sure you show your work!

|After… |1 year |2 years |3 years |4 years |5 years |

|Worth | | | | | |

Tips about Purchasing a Car

Using online sources, as well as your own knowledge, make a list of 10 important things you should consider when purchasing a car. Your list can be point form, but each point should be detailed.

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