Cars and Loans Short

Directions: Answer the following questions concerning the fiscal responsibilities involved in car ownership.

1. Give two examples of fixed costs of owning a car.

2. Give two examples of variable costs of owning a vehicle.

3. You should never borrow more than what percent of your yearly net income?

4. You should never have monthly payments that exceed what percent of your monthly net income?

5. Name four sources of used cars.

6. What is a warranty of merchantability?

7. Why are dealer warranties useful?

8. Can unexpired manufacturer's warranties be transferred to a new owner?

9. Use slide 9 to help answer the question. Assuming a borrowed amount of $8,000, how much is to be paid to the loaning institution given the following: a 12.25% apr and a loan term of 36 months.

10. Using the same information as question 9, what would your monthly payment be?

11. Describe 3 types of auto insurance coverage.

12. How might your driving record impact your auto insurance rate?

13. What legal responsibilities do you have if your vehicle is repossessed?

14. Give some advantages and disadvantages of leasing a vehicle.

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