Vehicle Transportation Chapter 9

Background Info on Vehicles Make: The company that makes the vehicle Model: The specific name of the car EX: Make is Dodge, Model is Charger Pre-owned: A used vehicle MSRP: Manufacturer’s suggested retail price

9.1 – Purchasing a New Vehicle The sticker price is the total price of the vehicle from the dealership. This includes…. Base Price: price of the engine, chassis (vehicles frame), any other piece of standard equipment for a particular model Options: extras for convenience, safety, or appearance Destination Charge: cost of shipping the vehicle from the factory to the dealer

Purchasing a New Vehicle Sticker Price = Base Price + Options + Destination Charge

Scott Hubsch is shopping for a sports car Scott Hubsch is shopping for a sports car. A portion of the sticker for a convertible is shown below. What is the sticker price for this vehicle? Convertible Vehicle Base Price $23,140 Optional Equipment Description Anti-Lock Brakes 730 Automatic Transmission 815 Destination Charge 499 Sticker Price = Base Price + Options + Destination Charge Sticker Price = $23,140 + ($730 + $815) + $499 Sticker Price = $25,184

Open Pontiac Sunfire Sticker

9.2 – Dealer’s Cost Vehicle Dealers pay less than the sticker price for both the basic vehicle and the options The dealer’s cost is the price actually paid for a vehicle by a dealer, usually expressed as a percent

What’s the Dealer’s Cost? Dealer’s Cost = Percent of Base Price + Percent of Options Price + Destination Charge Percent of Base Price = Base Price x Percent of Dealer’s Cost on Base Price Percent of the Options Price = Total Price Options x % of Dealer’s Cost on Options

Want to purchase a new car with base price $12,905, options totaling $2,010, and destination charge of $360. The dealer’s cost for the car is about 95% of the base price and 89% of the options price. What should they estimate as the dealer’s cost? Find Percent of Base Price $12,905.00 x 95% = $12,259.75 Find Percent of Options Price $2,010 x 89% = $1,788.90 Find Dealer’s Cost $12,259.75 + $1,788.90 + $360 = $14,408.65

Classwork Section 9.1 Pg. 316 #5-13 Section 9.2 Pg. 319 #6-11

9.3 – Purchasing a Used Vehicle Used Vehicle Guide – gives the average prices for vehicles that were purchased from dealers during the previous month Published monthly KBB.com Dealers advertise used vehicles for prices that are higher than what they expect you to pay

Purchasing a Used Vehicle Average Retail Price = Average Retail Value + Additional Options - Options Deductions - Mileage Deductions

Want to purchase a V8 4-door that’s advertised for $14,675 Want to purchase a V8 4-door that’s advertised for $14,675. Has no air conditioning ($800). Has power seats ($125), sound system ($200), leather seats ($340), and a power sunroof ($450). It’s been driven 51,760 miles and the used-vehicle guide states that $575 should be subtracted if mileage is from 45,001 to 52,500 miles. What average retail price should we keep in mind when making an offer? ARV + Add. Opt. – Opt. Ded. – Mi. Ded. $14,675 + ($125 + 200 + 340 + 450) – $800 – $575 $14,675 + $1,115 – $800 – $575 $14,415 average retail price

9.4 – Vehicle Insurance Liability Insurance – Financial protection against accidents that cause bodily injury and property damage Insurance company may offer bodily injury limits of 25/100 Insurance will pay up to $25,000 to any one person injured, and will pay up to $100,000 if more than one person is injured

9.4 – Vehicle Insurance Comprehensive Insurance – Protects you from losses due to fire, vandalism, theft, etc Collision Insurance – Pays to repair your vehicle if it’s in an accident Each kind of insurance may have a deductible clause, which is the amount you’re required to pay for any repair bill

The cost of your insurance depends on 3 factors… (annual base premium) The amount of insurance you want How old your vehicle is The insurance-rating group The amount you pay each year for insurance coverage (annual premium) depends on… Annual-base premium Driver-rating factor (age, marital status, amount you drive each week…)

Annual Base Premium = Liability Premium + Comprehensive Premium + Collision Premium Annual Premium = Annual Base Premium x Driver-rating Factor

Bodily injury 25/100 and $100,000 property damage Bodily injury 25/100 and $100,000 property damage. Car is in age group C and insurance-rating group 10 (or C, 10). A $50-deductible comprehensive and a $50-deductible collision. Driver-rating factor is 1.50. What’s the annual base premium and annual premium? (use table 9.3 on pg 324) ABP= Liability Prem. + Comp. Prem. + Coll. Prem. = 233.20 + 62 + 204 = $499.20 annual base premium AP = ABP x DRF = $499.20 x 1.5 = $748.80 annual premium

Pg. 322 # 3-8 Pg. 326 #3-8

9.5 – Operating and Maintaining a Vehicle There are many costs when operating and maintaining a vehicle Variable Costs – gasoline, tires, etc. Increase the more you drive Fixed Costs – vehicle insurance, registration fees, depreciation Remain about the same Depreciation – a decrease in the value of your vehicle because of its age and condition

How do I find cost per mile? (Annual Variable Cost) + (Annual Fixed Cost) (Number of Miles Driven)

Jeff drove his luxury car 10,300 miles this year Jeff drove his luxury car 10,300 miles this year. Fixed costs totaled $3,858. Variable costs totaled $1,480. What was the total annual cost? What was the cost per mile? Annual Cost = Fixed Cost + Variable Cost = $3,858 + $1,480 = $5,338 Cost per mile = (Ann. Cost)/(number of miles) = ($5,338)/(10,300) = $0.52 per mile

Last year you drove your sports car 10,000 miles Last year you drove your sports car 10,000 miles. You kept track of al your expenses for the year. Your fixed expenses included insurance ($1,260), license and registration ($98), and depreciation ($1,190). Your variable expenses included gas ($731), oil changes ($86), parking ($273), and repairs ($142). What were your total expenses for one year? What was your cost per mile to drive your car? Expenses = Variable Exp. + Fixed Exp. = 1260 + 98 + 1190 + 731 + 86 + 273 + 142 = $3,780 Cost Per Mile = ($3,780/10,000) = $0.38 per mile

Luke Perry purchased a new four-door car 2 years ago at a price of $21,750. It is now estimated to be worth $13,920 today. Compute the depreciation. ***Remember, depreciation is the decrease in the value of your car, PER YEAR Purchase Price–Today’s Worth = $21,750 – 13,920 Number of Years Owned 2 years = $3,915.00

Practice Problems Page 329, #4 - 13

9.6 – Leasing a Vehicle If you do not want to buy a vehicle, you can lease one Make monthly payments for usually 2-5 years Essentially, you are borrowing the car Closed-End Lease At the end of the lease, you owe nothing (other than payment for any damage/ mileage limit) Open-End Lease Have the option of purchasing the vehicle at the end of the lease for its residual value

9.6 – Leasing a Vehicle Residual Value is the expected value of your vehicle at the end of the lease period Often established at the signing of the lease For both types of leases, you must pay… All monthly payments Security Deposit Title Fee License Fee

9.6 – Leasing a Vehicle Total Lease Cost = (# of Payments) x (Amount of Payment) + Deposit +Title Fee +License Fee

Ralph Machio leased a pickup truck for use in his lawn car business Ralph Machio leased a pickup truck for use in his lawn car business. He pays $199 per month for 60 months. His deposit was $2,500. He paid an $80 title fee and a $45 license fee. What is his total lease cost? (60 x $199) + $2,500 + $80 + 45 $11,940 + $2,500 + $80 + 45 = $14,565 total lease cost

Megan leased a vehicle for 48 months Megan leased a vehicle for 48 months. She made a deposit of $2,000, paid a $90 title fee and a $30 license fee. At the end of the 48 months, Megan’s total lease cost was $14,120. What was the amount that Megan paid each month? (hint: USE ALGEBRA!) $14,120 = (48 x MP) + $2,000 + $90 + $30 $14,120 = 48MP + $2,120 $12,000 = 48MP $250 = Monthly Payment

Bradley Scooper leases a vehicle for $200 a month for 72 months Bradley Scooper leases a vehicle for $200 a month for 72 months. He pays a $3,000 deposit, $100 title fee, and $50 license fee. There is a stipulation that there would be a $0.05 per mile charge for all miles over 60,000. He drove the vehicle 65,421 miles. What’s the cost of leasing the vehicle? (72 x $200) + $3000 + $100 + $50 $14,400 + $3000 + $100 +$50 = $17,550 Miles: (65,421 – 60,000)x($0.05) = (5,421)x($0.05) = $271.05 So $17,550 + $271.05 = $17,821.05 total lease cost

Practice Problems Page 332, #4-15 There will be NO homework other than finishing these problems and CHECKING YOUR ANSWERS before you leave

9.7 – Renting a Vehicle Sometimes you may need to rent a vehicle Some rental agencies charge a daily rate plus a per-mile rate Some charge just a daily rate In all cases, you pay for the gasoline used May also have to pay for insurance

9.7 – Renting a Vehicle Reasons for renting a vehicle Repairs on your regular car Family vacation Make an impression Moving vehicle

9.7 – Renting a Vehicle In order to figure out how much we are paying per mile…. Cost Per Mile = Total Cost # of Miles Driven

Joe rented a car for 3 days at 39. 95/day plus $0. 20 per mile Joe rented a car for 3 days at 39.95/day plus $0.20 per mile. He purchased the collision waiver for $10.00 per day. He drove 468 miles and paid $21.70 for gas. What was the total cost of renting the car? What was the total cost per mile to rent the car? 3 days x $39.95 = $119.85 renting 468 miles x $0.20 = $93.60 for miles 3 days x $10.00 = $30 for insurance $21.70 + 119.85 + 93.60 +30 = $265.15 total cost Cost per Mile = ($265.15)/(468)= =$0.57 per mile

Extra Practice Pg 335, #11-16