1. COSTS OF BUYING A CAR PART 1 (IN THE FUTURE) Because you will likely need/want to drive places.

2. HOW DOES BUYING A CAR AFFECT YOUR PERSONAL BUDGET? WHAT ARE SOME THINGS ABOUT A CAR YOU MIGHT CONSIDER WHEN BUYING A CAR?

3. WHAT ARE SOME COSTS YOU MIGHT CONSIDER WHEN BUYING A CAR? Challenge:

4. COSTS OF OWNING & OPERATING A CAR Ownership Fixed CostsOperating Variable Costs  Paying Off Car (depends on original cost)  Interest on Loan  Insurance  Registration Fee, License, Taxes  Gas  Oil & other fluids  Tires  Maintenance & Repairs  Parking & Tolls How much do you think each of these costs actually cost? (estimate)

5. FOR A HYUNDAI ACCENT?

6. HOW MUCH CAN YOU AFFORD? Follow the 20-10 Rule…  Never borrow more than 20% of your yearly net income.  Monthly payments should never exceed 10% of your monthly net income. Ex. What does this mean if you make $400 a month?

7. WHAT ARE SOME QUESTIONS YOU SHOULD ASK YOURSELF WHEN BUYING A USED CAR? Challenge:

8. WHERE TO SHOP FOR A USED CAR… New Car Dealers:  Quality Used Vehicles  Service Dept. Available  Usually More Expensive Used Car Dealers:  Specialized in Used Vehicles  Limited Warranties (if any)  May be in Poor Condition Private Parties  Good Buy if Vehicle Well-Maintained  Few Consumer Protection Regulations Apply

9. THINGS TO CONSIDER WHEN SHOPPING FOR A CAR… Before you shop:  Decide how much you can afford to spend  Decide on model and research reliability  Find out where repairs can happen and if parts are available  Shop for financing and determine costs/payments As you shop:  Find out reputation of the dealer  Find out about types of warranties and service deals

10. WHAT DO YOU HAVE TO FIND OUT ABOUT A LOAN? (WHAT DO YOU REMEMBER ABOUT CALCULATING LOANS?) Challenge:

11. SHOPPING FOR A CAR LOAN Variables include:  Annual Percentage Rate (APR)  Length of Loan  Monthly Payments  Total Finance Charge  Total to be Repaid

12. ESTIMATING THE COST OF A LOAN Interest = Amount of Loan x APR x Number of Years Total Cost of Loan = Amount of Loan + Interest Ex. Estimate the total cost of a $10 000 loan at 10% APR for 5 years.

13. ESTIMATING THE MONTHLY PAYMENTS Monthly Payments = Total Cost of Loan ∕ Total Number of Months Ex. Estimate the monthly payments for the previous loan Do you think these calculations are accurate? Why or why not?

14. DETERMINING A BUDGET WHAT CAN MANUEL AFFORD? WHAT CAN YOU AFFORD? Assignment: