Math: Finance

Inquiry Question
Is it a better financial decision to purchase a vehicle new or used?

Name: ___________________________ Date: ____________

General Instructions
One of the first major purchases people make is often a vehicle. Sometimes you hear
it is cheaper to buy new because you won’t have repairs as everything is under
warranty. Other times, the advice is that the cheaper route is to buy used.

You are going to research both options and compare the two. Both should be
reasonable options as a first vehicle. You’ll then research maintenance costs,
estimated repair costs, etc. and compare the total cost of purchasing and maintaining
each after 7 years.

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Materials you’ll need:

• Computer with Internet
• Word processor
• Calculator

Project submission:
Submit project answering these questions. As long as the questions are fully answered this
could be done as a document, poster, presentation, video, etc..

1. First, you are going to pick a new vehicle to buy. We will assume you do not have the
money to buy it with cash and you’ll need to finance it. Below, include the vehicle details,
cost of the car, extra fees (delivery, taxes, etc.) and the finance cost. You should use a
real example here. Finally, you’ll want to calculate the total cost of the car. This will be
the payment amount multiplied by the number of payments. Remember that your
payments will include the listed price of the car, taxes, interest, extra fees, etc…

2. Next, you’re going to estimate the cost of maintaining this vehicle. Estimate how many
km a year you’ll be driving. If you’re not sure, you can find an average online. Then, find
out what maintenance is required on your new vehicle. Oil changes will be , but are there
more? Usually the dealership requires a comprehensive maintenance schedule to
maintain your warranty Figure out the cost of this maintenance over 7 years.

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3. Finally, calculate the total cost of purchasing a new vehicle. This is the total amount from
part 1 and 2.

4. Next, you’re going to pick a used car to purchase. You’ll want to do some research here.
Not all used cars are made equal. Include the car you’ve chosen, why you’ve chosen it,
and how much it will cost. You’ll need to search classifieds, facebook markeplace, etc. to
find the car and price. Include a screenshot of the ad. You must use a real example. For
this comparison the car must be at least 7 years old and can cost no more than $10000.

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5. Used vehicles will require similar maintenance as a new one (think oil change) but often
start to require repairs. Do some research and get an estimate of the cost of repairs for
your vehicle. This will be an estimate. Once you have the estimated cost of
maintenance and for repairs calculate what it will total over 7 years.

6. Finally, calculate the total cost of purchasing a new vehicle. This is the total amount from
part 4 and 5.

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7. Compare the two options. Over the 7 years, which vehicle was more expensive? What
was the difference?

8. Finally, going back to buying a new vehicle, what was the difference between the total
cost before financing and after financing? Why is there a difference?

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