1. The Dave Car…

2. The True Cost of Ownership – Pick a new car to research – Use a search engine to find the “true cost to own”. www.edmunds.com\tco.html www.edmunds.com\tco.html – Use the same car but 2 years older

3. The True Cost of Ownership Jeep Wrangler Unlimited New TCO=$49,572 Jeep Wrangler Unlimited 2-years old TCO=$47,966 Year 1Year 2Year 3Year 4Year 5 Depreciation59432339205818241635 Insurance21652241231924002484 Taxes/Fees2534180162147 Fuel24412514258926672747 Maintenance1697254221861374 Year 1Year 2Year 3Year 4Year 5 Depreciation74891730152213491211 Insurance19622031210221762252 Taxes/Fees1790127114103 Fuel24412514258926672747 Maintenance3581799361779505

4. The True Cost of Ownership Cost per mile to drive new – TCO = $49,572 – 5 years @ 15,000 miles = 75,000 miles – $49, 572  75,000 =.66 per mile Cost per mile to drive 2 year – TCO = $47,966 – 5 years @ 15,000 miles = 75,000 miles – $47,966  75,000 =.63 per mile

5. The True Cost of Ownership Savings on a two-years-older model – $49,572 - 47,966 = $1,606 savings Savings in percentage for each category Savings  new =.xx * 100 = xx% New2 YearSavingsPercentage Depreciation13,79913,3014983.6% Insurance11,60910,52310869.35% Taxes/Fees3,1702,23793329.43% Fuel12,958 00% Maintenance3,5513,802-251-7.06%

6. Chapter 4 Drive Free – Pick a goal car you would like to have in 20 months – Use a search engine to find used cars. www.cars.com works but you can use a different one.www.cars.com Start with a used car you could pay cash for $1,500, then a mid-priced about car and then the goal car. Assume you pay yourself and SAVE the $400-$450 you would have paid for financing a car. (450*10 months = $4,500) Sell each car for the same amount you purchased it for. Create a document/timeline of the entire 20 months. On this timeline, the following needs to be included for each car purchase: »» Purchase date(s) »» Picture of the cars(3) »» Purchase price(s) »» Number of months required for savings »» How you saved that much money

7. Drive Free?

8. Example Goal car – 2002 BMW Roadster Convertible will be $10,000 1 st car should cost about $1,500 Average car payments are $450 per month so that goes in savings (we won’t worry about interest but it would earn interest) Sell each car for the amount purchased in 10 months (we won’t calculate depreciation but it would depreciate)

9. 1 st car – 1994 Ford Mustang--$1,500 – Save $450 a month for 10 months= – $4,500 + 1,500 for selling the Mustang = $6,000

10. Example 2 nd car $5,000 Mazda Miata – (I had $6,000 to spend) – So I have $1,000 left in the car savings account

11. Example 2 nd car $5,000 Mazda Miata – (I had $6,000 to spend) Keep saving $450 per month for another 10 months: – $4,500 savings per month – 5,000 from selling the Miata – 1,000 left from before (didn’t spend all my profit) – 10,500 saved! Goal car – 2002 BMW Roadster Convertible!!!

12. Example Keep saving $450 per month for another 10 months: – $4,500 savings per month – 5,000 from selling the Miata – 1,000 left from before (didn’t spend all my profit) – 10,500 saved! – Now I can afford the Goal Car WITH CASH! Goal car – 2002 BMW Roadster Convertible!!!

13. Example Keep saving $450 per month for another 10 months: – $4,500 savings per month – 5,000 from selling the Miata – 1,000 left from before (didn’t spend all my profit) – 10,500 saved! Goal car – 2002 BMW Roadster Convertible!!!