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Purchasing A Car Project
Purchasing A Car Project
DIRECTIONS: Complete all of the tasks and fill out all the tables below. When completed with
the tables, write the short answers/essay.
It is time for you to purchase your first new car! You have been working hard to save money for
your down payment, and now you have enough money saved!
Your Car
Select the car you would like to purchase. You will be purchasing a new car, so shop
around to get the best price.
a. Suggested (local) websites:
i. http://www.htownhyundai.com/
ii. http://www.hackettstownhonda.com/index.htm
iii. http://www.subaru46.com/index.htm
b. Feel free to look for your own make/model somewhere else!
Your Car
Make
[Example Toyota]
Model
[Example Corolla]
Price
[Example - $15,000]
Honda
Civic lx coupe
18,570
You will be using your savings as a down payment (a sizeable, up-front payment) and
financing the remainder of the cost of the car. Your down payment should equal 10% of
the cost of the car. Subtract the cost of the down payment from the amount to figure
out how much you need to finance (borrow in a loan).
Example If a car costs $15,000 you would put down a 10% down-payment of $1,500
[15,000 x .10] and your loan would be for $13,500 [15,000 1,500]
Your Financing Requirements
Total Price of Car
Down-Payment
[Price X .10]
Amount you will be
financing
[Price Down-payment]
18,570
1,857
16,713
Name of Bank
Amount to be financed
($)
18,875
Loan #2
PNC
18,875
2 years
Loan #3
Bank of
America
18,875
3 years
5 years
24
36
60
2.39%
2.39%
2.49%
793.16
535.06
329,49
19035.84
19262.16
19769.4
160.84
387.16
894.4
Short Answers Answer each of these in at least a few complete sentences to get full credit.
1. Now that you have completed the table above, which financing option would you choose?
Why would you choose that particular option be specific! The third option due to having to
pay a lower monthly payment but the loans length would be longer than the other options
2. What do you think would happen if you increased your down payment to 20% of the cost of
the car? Would this cause you to wait longer and save more before making your purchase?
Why or why not?
3. Why did you select THIS car (make and model)? Is this purchase a want or a need? Explain. I
think this would be a want moreover then a need due to the appearance
4. Pretend that you have 3 months of emergency funds saved in the bank, a monthly after-tax
salary of $3,000 a month and average monthly costs of $2,500. Would getting this new car
be possible for you? Would it be a good idea? Why or why not?