Mr. Riley's Cabrillo CCR Page
How to Complete Activity 80 Transportation
1. Go to my website: cabrilloccr.
2. Hover your cursor over, “Helpful Class Links” and click on, “Transportation Links.”
3. You are to search for your next vehicle within the following parameters:
a. Vehicle must be priced under $21,000.
b. Vehicle can be either new or used.
c. Place the information about the car on your 10 Year Plan under Chapter 4, “Transportation p. 80.”
4. Utilize the Vehicle Loan Calculator under the, “Transportation Links” from my website to find out how much a car payment will cost you.
a. Place the total cost for your vehicle under the, “How much are you looking to borrow?” box.
b. Place, “60 Months” in the, “For how long?” box.
c. Indicate if it is a new or used car.
d. Place the number 6 in the box that says, “Interest Rate?”
e. The monthly payment will be underneath the, “Your estimated monthly payment” section to the right.
f. Place the number that appears below the, “What is the annual interest rate on the loan?” in your Portfolio book Activity 80 where it says, “Monthly car payments.”
5. To find the gasoline cost for your vehicle, you will need to determine how large your vehicle is.
a. If you have a mid to low sized sedan (Camry, Taurus, Altima, Sentra, Corolla, Fiesta, Prius, etc) you will have to multiply the number of miles you plan to drive by $0.120.
b. If you have a larger vehicle which tends to not get as good as gas mileage (Minivan, Escalade, Yukon, Expedition, Explorer, Suburban, Truck, etc) you will have to multiply the number of miles you plan to drive by $0.164.
c. Place this number next to the, “Gasoline” line on Activity 80.
6. To find the maintenance and insurance costs there is a three step process.
Step One
a. For mid or low sized sedans, multiply your total miles driven per month by $0.044.
b. For larger vehicles multiply your total miles driven per month by $0.050.
Step Two
a. Go to my website and click on the, “Auto Insurance Link.”
b. Scroll down until you see a table that has the price of insurance that states, “California Adding a Teen to your Policy Rates by Company.” Take the average number from your sex and divide it by 12.
Step Three
a. Add your total from step one to step two. Place this number on the, “Maintenance and Insurance” line.
7. Determine how much you will spend on public transportation. If you live in a big city, then your public transportation costs might be high. In a small town, the cost might be minimal. If you have to do a Google search for the cost, do so. (Especially if you plan to live in a place that you have no idea what the cost of public transportation is. Place this number under the, “Public Transportation” line on Activity 80.
8. Finally, add up all of the costs in Activity 80 and place them on the, “Transportation” line [2]. Then transfer this number to line [2] Transportation on Activity 92.
Turn to page 2 when finished!
How Much Money will a Car Payment Cost You Over the Next 30 Years?
1. Go to the, “Investing Calculator” link on my website.
2. Under, “How much have you saved for retirement” place a 0 (Zero) in this box.
3. We are going to assume that you put your money in the stock market and you potentially grow your money at the 12% rate (which is what the S&P has averaged since its beginnings.) Place 12 in the box that says, “What is the annual rate of return?”
4. In the box that says, “How much do you plan to contribute monthly?” put in your car payment from Activity 80. If you don’t have a car payment, you can use that money to put it into the stock market for your retirement (which most people unfortunately don’t do.)
5. In the, “How many years do you plan to contribute” box, place 30 (you will be about 45 years old by this time.
6. In the, “How much will the investment be worth in…” box, place 30 again.
• If you didn’t have a car payment, and instead you paid your car in cash, and contributed the monthly payment towards your retirement, you will be worth…….
• The total is found under the “30 year value” box at the top.
• Ask yourself, “Is that brand new car smell and shine worth the potential money you will lose by not investing it in the stock market for your future?”
• Try putting in new numbers in the “How many years do you plan to contribute” and How much will the investment be worth in….” box.
• How much will it be worth in 40 years? 50 years? When could you retire? (
LIVE LIKE NO ONE ELSE, SO LATER YOU CAN LIVE LIKE NO ONE ELSE –Dave Ramsey
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The best way to purchase a vehicle is to purchase a two year or older vehicle with low miles WITH CASH!!! However, to understand how much a payment will cost you in the long run, we will be finding out how much a car payment will be.
Let’s assume you are a typical (normal and broke) American who will keep a car payment their entire lives.
Place the amount you will make by investing the money rather than spending it on a car at the bottom of Activity 80 as a reminder of what a car payment will cost you!
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