1. Vehicle Transportation
Chapter 9

2. 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

3. 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

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

5. 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

6. Open Pontiac Sunfire Sticker

7. 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

8. 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

9. 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, x 95% = $12,259.75
Find Percent of Options Price
$2,010 x 89% = $1,788.90
Find Dealer’s Cost
$12, $1, $360 = $14,408.65

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

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

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

13. 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.
$14, ($ ) – $800 – $575
$14, $1, – $ – $575
$14,415 average retail price

14. 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

15. 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

16. 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…)

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

18. 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 What’s the annual base premium and annual premium? (use table 9.3 on pg 324)
ABP= Liability Prem Comp. Prem. + Coll. Prem. =
= $ annual base premium
AP = ABP x DRF = $ x 1.5
= $ annual premium

19. Pg # 3-8
Pg. 326 #3-8

20. 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

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

22. 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, $1,480
= $5,338
Cost per mile = (Ann. Cost)/(number of miles)
= ($5,338)/(10,300)
= $0.52 per mile

23. 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. =
= $3,780
Cost Per Mile = ($3,780/10,000)
= $0.38 per mile

24. 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 years
= $3,915.00

25. Practice Problems
Page 329, #4 - 13

26. 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

27. 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

28. 9.6 – Leasing a Vehicle Total Lease Cost =
(# of Payments) x (Amount of Payment)
+ Deposit
+Title Fee
+License Fee

29. 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 + $
$11, $2,500 + $
= $14,565 total lease cost

30. 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

31. 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) + $ $100 + $50
$14,400 + $ $100 +$50
= $17,550
Miles: (65,421 – 60,000)x($0.05)
= (5,421)x($0.05) = $271.05
So $17,550 + $ = $17, total lease cost

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

33. 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

34. 9.7 – Renting a Vehicle Reasons for renting a vehicle
Repairs on your regular car
Family vacation
Make an impression
Moving vehicle

35. 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

36. 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 = $ renting
468 miles x $0.20 = $93.60 for miles
3 days x $10.00 = $30 for insurance
$ = $ total cost
Cost per Mile = ($265.15)/(468)=
=$0.57 per mile

37. Extra Practice
Pg 335, #11-16