Assume you and your spouse were recently married and bought your first car, a used Toyota, for $10,000. The sales tax is 6.5 percent and you intend to use the car for several years. Consider the following factors:

Taxes and licenses run $150 each year, and tune ups and repairs come to $400 per year.

Taxes and licenses run $150 each year, and tune ups and repairs come to $400 per year.

The Toyota gets about 25 miles per gallon of gas. You drive it mostly to school and work which amounts to 10,000 miles each year. Gasoline costs an average of $3.29 per gallon.

You found it necessary at the time you bought the car to buy 2 new tires which cost $50 each. You bought two more tires for the same price two years later.

Oil changes for the car cost $22 every 5,000 miles.

Minimum insurance on the car is $250 every six months.

Assume you pay $500 down and finance the rest at the Friendly Finance Company on a two-year contract at 12% APR. There is a $200 loan origination fee added to the loan.

H J K L M N O B D E G 1 Using Credit Wisely-Transportation Assignment 2 COST OF CAR OWNERSHIP-PARTA 5 Assume you and your spouse were recently married and bought your first car, a used Toyota, for $10,000. The sales tax is 6.5 percent and you intend to use the car 6 for several years. Consider the following factors: 7 -Taxes and licenses run $150 each year, and tune ups and repairs come to $400 per year. 8 -Taxes and licenses run $150 each year, and tune ups and repairs come to $400 per year. 9 -The Toyota gets about 25 miles per gallon of gas. You drive it mostly to school and work which amounts to 10,000 miles each year. Gasoline costs an average of 10 11 $3.29 per gallon. 12 -You found it necessary at the time you bought the car to buy 2 new tires which cost $50 each. You bought two more tires for the same price two years later. 13 -Oil changes for the car cost $22 every 5,000 miles. 14 -Minimum insurance on the car is $250 every six months. 15 -Assume you pay $500 down and finance the rest at the Friendly Finance Company on a two-year contract at 12% APR. There is a $200 loan origination fee added 16 to the loan. 17 18 Questions for Canvas: (See Worksheet below) 19 1. How much does it cost to operate this car if you keep it for 4 years and sell it for $850? 20 2. What is the average cost of the car per year? 21 3. What is the cost per mile for this car? 22 23 Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PART A Annual Car Ownership Costs Workheet Use this area to document problem variables so they can be referenced in formulas. Fixed Costs Purchase Cost Full Sales Price Sales tax Loan Origination Fee Total Cost of Car price of car 6.5% Sales Tax $ $ $ $ 10,000.00 650.00 200.00 10,850.00 Downpayment Amount I need to finance $ $ 500.00 10,350.00 required downpayment Cost to Purchase Monthly payment Multiply by months paid Plus down payment Total Cost to Purchase ($487.21) $11,693.05 $500.00 $12,193.05 2 year Term 12.0% APR $500 Downpayment Estimated car value at end of loan term What I can sell it for later. The difference between the original price of the car and this amount is called "depreciatio B DE F G H 1 J K L M N O Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PARTA Estimated car value at end of loan term What I can sell it for later. The difference between the original price of the car and this amount is called "depreciation." Cost of Ownership Total Cost of Credit The difference between what I borrowed and the total amount I paid back 250 every 6 months Insurance (Annual Premium) times # of years $150,00 license, registration, property tax PER year License, Registration Fee, Property Taxes (Annual charges) * # of years Total fees and taxes over 4 years Total Fixed Cost Variable Costs Clipboard Font Alignment Number Styles Cells 719 B D F G H J A E Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PARTA Variable Costs B Gasoline 9 Total miles driven 10,000 miles per year Divided by miles per gallon 25 miles per gallon 1 Multiply by price per gallon $3.29 cost per gallon 4 years 3 1 5 Oil Changes Total number of oil changes Multiply by cost per change lube every 5,000 miles $22.00 per oil change s 7 B Tires Total Purchased * $ Cost $200.00 purchase 4 tires once Maintenance/Repairs Total repair (or estimated) expense 1 $400 per year Parking and Tolls $0.00 3 4 Total Variable cont Formatting lable Styles Clipboard Font Alignment Number Styles Cells 019 X B D E F G . 1 J K L Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PART A 4 5 6 Total Variable Cost 7 8 Total Cost (Fixed plus Variable) 9 Average Cost per Year (Total / # of years) 4 number of years 0 1 2 3 Total Cost Per Mile Total cost divided by miles driven 4 6 7 3 H J K L M N O B D E G 1 Using Credit Wisely-Transportation Assignment 2 COST OF CAR OWNERSHIP-PARTA 5 Assume you and your spouse were recently married and bought your first car, a used Toyota, for $10,000. The sales tax is 6.5 percent and you intend to use the car 6 for several years. Consider the following factors: 7 -Taxes and licenses run $150 each year, and tune ups and repairs come to $400 per year. 8 -Taxes and licenses run $150 each year, and tune ups and repairs come to $400 per year. 9 -The Toyota gets about 25 miles per gallon of gas. You drive it mostly to school and work which amounts to 10,000 miles each year. Gasoline costs an average of 10 11 $3.29 per gallon. 12 -You found it necessary at the time you bought the car to buy 2 new tires which cost $50 each. You bought two more tires for the same price two years later. 13 -Oil changes for the car cost $22 every 5,000 miles. 14 -Minimum insurance on the car is $250 every six months. 15 -Assume you pay $500 down and finance the rest at the Friendly Finance Company on a two-year contract at 12% APR. There is a $200 loan origination fee added 16 to the loan. 17 18 Questions for Canvas: (See Worksheet below) 19 1. How much does it cost to operate this car if you keep it for 4 years and sell it for $850? 20 2. What is the average cost of the car per year? 21 3. What is the cost per mile for this car? 22 23 Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PART A Annual Car Ownership Costs Workheet Use this area to document problem variables so they can be referenced in formulas. Fixed Costs Purchase Cost Full Sales Price Sales tax Loan Origination Fee Total Cost of Car price of car 6.5% Sales Tax $ $ $ $ 10,000.00 650.00 200.00 10,850.00 Downpayment Amount I need to finance $ $ 500.00 10,350.00 required downpayment Cost to Purchase Monthly payment Multiply by months paid Plus down payment Total Cost to Purchase ($487.21) $11,693.05 $500.00 $12,193.05 2 year Term 12.0% APR $500 Downpayment Estimated car value at end of loan term What I can sell it for later. The difference between the original price of the car and this amount is called "depreciatio B DE F G H 1 J K L M N O Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PARTA Estimated car value at end of loan term What I can sell it for later. The difference between the original price of the car and this amount is called "depreciation." Cost of Ownership Total Cost of Credit The difference between what I borrowed and the total amount I paid back 250 every 6 months Insurance (Annual Premium) times # of years $150,00 license, registration, property tax PER year License, Registration Fee, Property Taxes (Annual charges) * # of years Total fees and taxes over 4 years Total Fixed Cost Variable Costs Clipboard Font Alignment Number Styles Cells 719 B D F G H J A E Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PARTA Variable Costs B Gasoline 9 Total miles driven 10,000 miles per year Divided by miles per gallon 25 miles per gallon 1 Multiply by price per gallon $3.29 cost per gallon 4 years 3 1 5 Oil Changes Total number of oil changes Multiply by cost per change lube every 5,000 miles $22.00 per oil change s 7 B Tires Total Purchased * $ Cost $200.00 purchase 4 tires once Maintenance/Repairs Total repair (or estimated) expense 1 $400 per year Parking and Tolls $0.00 3 4 Total Variable cont Formatting lable Styles Clipboard Font Alignment Number Styles Cells 019 X B D E F G . 1 J K L Using Credit Wisely-Transportation Assignment COST OF CAR OWNERSHIP-PART A 4 5 6 Total Variable Cost 7 8 Total Cost (Fixed plus Variable) 9 Average Cost per Year (Total / # of years) 4 number of years 0 1 2 3 Total Cost Per Mile Total cost divided by miles driven 4 6 7 3