Car Buying Final Project

Once you purchase a vehicle, you will have to maintain it. You will also have to calculate approximately how much money you will spend on gas. You must research the average fuel mileage of your car, current gas prices and assume that you will drive 13,500 miles per year. You will also need to consider the cost of the vehicles registration, sales tax on your vehicle. Buying a car can be exciting, but it is a decision that is very important and one you need to take seriously, so take this project seriously and approach it like you were actually going to buy the car.

Step 1: Finding the right car for you!

It is time to find the car that best fits your style. You may use ANY vehicle website (dealers, manufacturers, etc.) to find your information. You may also use a general website such as www.cars.com. When you find the car that you would like to purchase, answer the following questions.

• Make:
• Model:
• Year:
• New or Used?
• Special Features: (i.e. cruise control, power windows, AWD, etc.)
• Attach a copy of the advertisement. You can use the snipping tool or take a screen shot of the ad. Be sure to crop it so it looks nice and professional.
• Price:
• Odometer reading:
• What is the gas mileage for your car? (you may need to research this if you arent using a car dealers website)

• in the city:
• on the highway:
• average gas mileage :

• What was the main reason you chose this car? Use complete sentences to explain.

Step 2: Total cost of purchasing the vehicle:

Once you have decided on what kind of car you are purchasing, you will need to calculate how much you will borrow from the bank. It is common for people to finance the sales tax along with license fees and registration fees for the first year of ownership.

1. For this project we will assume that your initial license and registration fees when you purchase your vehicle is $116.75.
2. Tax rates vary by the county you live in. For this project we will assume that your counties tax rate is 8.9%. You will pay tax only on the purchase price of the car, not on the registration or license fees.
3. What is the total purchase price for the vehicle, including registration/licensing fees and taxes? Show these calculations in your paper.

Step 3: The Vehicle Loan:

Now that you have chosen your vehicle and determined the total cost, you will need to determine how much you will be borrowing from your bank. You will not have a car to trade in, but you will have a 10% down payment. Loan rates can vary widely depending on many factors such as your credit score, the length of the loan, and the age of the vehicle. You can research rates by visiting different banking websites and credit union websites. Pick an interest rate after you have spent some time researching to find the best deal. Attach a copy of the link and a picture of the website that shows the rate you chose. You should not be entering any personal information to get these rates. You DO NOT need to actually apply for a loan to get this information.

After you have researched, answer the following questions SHOW ALL CALCULATIONS:

• Down payment amount-10% of the total cost:
• Amount to be financed (this is the amount you are borrowing from the bank):
• Bank Name:
• Website links:

Attach snips or screenshots of the websites you used that shows the rates you chose. Be sure to crop them so they look nice and professional

Step 4: The monthly payment:

Using the information you gathered in Step 3, you will be calculating a monthly payment for a 5 year loan.

• Using the simple interest amortized loan formula from your 107 class (or the formula from 130 class week 7) to calculate the monthly payment for the loan. Be sure to indicate which amounts you used for each variable and show how you entered the information into the formula. Also, be sure to show the formula with all of the amounts entered BEFORE you actually calculate the payment.
  • Monthly payment for the 5 year loan:
• Calculate the total amount you will pay for the car if you make every monthly payment over the life of the loan. Be sure to show all calculations.
  • Total amount paid for the car for the 5 year loan:
• Calculate how much interest you would pay over the life of the loan.
  • Total interest paid for the life of the 5 year loan:

Now that you have a car loan, it is wise to calculate the true monthly cost of owning and operating a vehicle. To do this, you will need to consider things like parking fees, insurance, annual registration fees, and gas mileage.

Step 5: Insurance quote:

If you are not paying cash for your car, the bank who is giving you the loan will require that they be protected in case you have an accident. The bank or credit union you chose will require that you take out full coverage insurance, which includes comprehensive and collision coverages. They will typically require that you carry a deductible that is $500 or less. The state of Washington requires liability insurance to drive a car. According to nerdwallet.com the average yearly cost that Washington State drivers pay annually for full coverage is $1261.

http://www.nerdwallet.com/insurance/compare-car-insurance-rates/

What would be the monthly cost for insurance be?

Step 6: Registration Fees:

Although you registered your car when you purchased it, the fees renew every year, so that must be included as part of the cost of owning a vehicle. The renewal fees vary by weight of the vehicle and local taxes. For an average size vehicle in Spokane County the yearly renewal fee is $55.50. You will use this number as an estimate of the yearly cost for renewing your cars tabs

What would this cost be per month?

Step 7: General upkeep and maintenance: You also need to be concerned with the general upkeep of your car along with how much it is going to cost to keep gas in your car. This includes regular oil changes, new tires and other maintenance. Below is a list for you to fill out that will help you calculate the other yearly costs of operating your car.

For these calculations we will assume that you will be driving 13,500 miles each year. Be sure to include all calculations in your paper.

Oil changes: According to research by Edmunds, most carmakers now recommend oil changes every 7500 miles. If you drive 13,500 miles per year,

1. How many times per year will you have to change your oil?

2. If Jiffy Lube charges $70 for a premium oil change. Find the total yearly cost for oil changes. Multiply that number by how many times per year you will need your oil changed each year. Total yearly cost for oil changes:

If you save for this expense monthly what would you need to save?

What would be the monthly cost for oil changes:

Fuel costs: Assuming you drive 13,500 miles per year, you will determine how much money you will spend in fuel for one year. Show all of your calculations!

1. What is the average fuel mileage of your car (from Step 1):
2. What is the average cost of 1 gallon of fuel?
3. Find the total cost of your fuel for one year:
4. Find the total cost of your fuel for one month:

Tires: If you replace your tires every 60,000 miles, estimate how much you will need to save to purchase a portion of those tires each year. Show all of your calculations!

1. According to Angies List people are reporting that they are paying an average of $637 to replace four tires (the actual costs vary by size and brands of tires).If you drive 13,500 miles per year, how many years will it take before you have to replace the tires?
2. How much per year will you need to save to prepare for replacing your tires in the time-frame you calculated in part b?
3. How much per month will this be?

Miscellaneous maintenance: Research the average cost per month of miscellaneous maintenance for your vehicle. This will be things like car washes, vacuuming, air fresheners, tune-ups, windshield wipers, brakes, etc.

1. What is the yearly cost of miscellaneous maintenance for your vehicle? Monthly?
2. Site where you found this:

Parking: Do you need to pay for parking?

If so, what is the annual and monthly cost of a parking pass?

Step 8: Totaling your expenses:

You should have all of the information necessary to total the monthly cost for owning and operating a vehicle. Use the following table to calculate the monthly total and include it in your paper.

	Monthly Cost
Car loan payment
Car insurance payment
Registration
Oil Changes
Fuel
Tires
Miscellaneous Maintenance
Parking
Total