Unit 10: Owning & Operating a Vehicle

Weekly Agenda In class Monday: Purchasing a Vehicle Tuesday: Identifying Operating Costs Research Assignment in the Lab Wednesday: Part A – Creating a Budget Thursday: Part B – Selecting a Vehicle Friday: Part C – Final Report (budget, cost, etc.)

Today’s Learning Goals: Research and calculate the tax on new and used vehicles. Calculate the cost of a vehicle loan using the compound interest formula. Calculate the total and monthly cost of leasing a vehicles. Comparing used vs. new vehicles.

What I know … Before we begin, I would like for us to get an idea of where we stand as a class as far the knowledge we are bringing in with us to this unit: 1. Take out your cell phones (this is NOT a trick) 2. Open a web browser. → If you do not have a phone, follow along with a neighbour. 3. Go to kahoot.itkahoot.it 4. Enter the game pin and press enter.

Researching the TAX New Vehicles New cars are taxed at 13% of the invoiced price. Used Vehicles When the Harmonized Sales Tax activated in Ontario July 1, 2010, the tax on ALL car purchases changed from 8% to 13%. Used cars are taxed at 13% of the higher of: The purchase amount. The Canadian Red Book Value.Canadian Red Book This should be written on the bill of sale on the last page of the Used Vehicle Information Package (UVIP) before signed.Used Vehicle Information Package (UVIP) This can be found on the first page of the UVIP. Recall: To calculate just the tax …. To calculate the total with tax …. TOTAL X 0.13 TOTAL X 1.13

Calculating the TAX on a Used Vehicle Example: Julia just purchased a 2008 Honda Civic from her friend Melissa for $4000 cash. The following day she goes to a Service Ontario building to register her ownership of the car. She is expecting to pay tax on the $4000 she paid for the vehicle. a) How much tax would Julia have to pay on $4000? $520 b)When Julia arrives at Service Ontario she finds out that the Canadian Red Book Value for the Civic is $8500. How much tax will Julia actually have to pay? $1105

Calculating the Cost of a Car Loan Example: A local dealership is selling a new car for $ plus tax. The dealership offers financing at 4.8% annual interest, compounded monthly, over 4 years. You have a $3000 down payment and will finance the rest. a) How much will you pay with tax for the vehicle? b) Calculate the amount of the loan after 4 years. c) Calculate the total interest paid. $20, = $17, = $3,661.13

Calculating the Cost of Leasing a New Vehicle Example: To lease a new car selling for $24,000, a customer agrees to pay a $1000 down payment and to make 48 monthly payments of $369. a) Calculate the total cost of leasing the vehicle. b) Calculate the cost per month over the lease. Leasing a vehicle is basically entering into a long-term rental agreement. You drive the car but you don’t own it. Total cost = down payment + monthly payments

Used vs. New Vehicles Cars depreciate at a rate of 15-20% per year. Buying a 1-2 year old model of a car often costs thousands of dollars less than buying a new model. The savings on the car usually far out ways the cost difference in repairs.

By the end of today … I can determine the taxable amount of a vehicle. I can calculate the tax on a new and used vehicle. I can calculate the total amount of a car loan and the interest paid. I understand what it means to lease a vehicle. I can calculate the total cost of leasing a vehicle and the average cost per month. I understand the advantages of buying a used car.