We are going new car shopping!! Select three cars – a sports model (Mustang, Camero, corvette, etc.), a midsize (Camry, Sonata, Accord, Taurus, etc.), and an economical car (Metro, Elantra, Corolla, Civic, etc.).
For each car, find the following:
- Price for the car
- Average Gas Mileage – if the site gives the highway and city MPG separately, just average the two values and enter that value into the spreadsheet.
Open the spreadsheet called Car-Onomics (found at the bottom of this page) and enter the name, price and gas mileage for each car.
Go to KSL.com
and find a used car that you would be willing to drive. Enter that car in the spreadsheet next to “Used Car 1.” (There is a place for other used cars if you want to enter more than one, but more is not required.) Enter the cost of the car as well as the gas mileage. (You might have to research the MPG on the web and use a new car’s mileage.)
Monthly Car Payment
Since you do not have that kind of cash in your wallet, you are going to have to finance the car. We are going to finance our car over five years. So if you buy it when
you are 16, you will completely own it when you are 21. You can use whichever bank’s interest rate you can find. If you do not know of a bank, go to AmericaFirst.com
and look up the interest rates for a new auto loan.
Driving a Car Requires Gas
Right now, gas is about $2.30 per gallon so put that for the cost of gas for all three cars. Figure you are going to drive the car 9000 miles in a year. Enter 9000 for the miles driven per year into the spreadsheet. Enter $2.30 for the cost per gallon of gas.
Other Costs of Car Ownership
Utah Law requires cars to be insured. There are many factors that go into the cost of insurance – grades, driving record, cost of car, amount of coverage, etc. A complete cost/benefit analysis can be done when purchasing insurance. To simply this assignment, I just calculated and used the basic costs for insurance. Your real costs may be a bit more or a bit less. But this will still give you an idea of the total cost of a car.
License and Registration
All cars must be licensed and registered. In some counties, emissions tests must also be conducted. License and registration fees are charged each year and are based on the current value of a car. Because the value of the car decreases with time, the costs for registering your car will also decrease (but only by $10 or $20 per year). I have calculated the basic costs for registration and then divided it by 12 so it would produce a monthly cost. Again, these figures vary, but you will continue to see how much a car really costs.
A car is like a living object and needs to be taken care of. The oil and filter will need to be changed every 3000 miles. Tires will need to be replaced after 30,000 miles. Things sometimes just go wrong and so we have budgeted to account for these costs. I have estimated $30 per month for general maintenance on a car. Yes, these costs will vary again, so they are just so you can get an idea. A used car usually requires more maintenance than a new car, so I entered $50 per month for the used car(s).
Can You Make the Payment?
Most high school students who work make minimum wage since they are unskilled. Minimum wage is $7.25 per hour.
Open up a new Word Document and answer the following questions using the information above and the data in the spreadsheet.
1.How many hours per week are you going to need to work to make the car payment?
2.How many hours per week are you going to need to work to pay for gas and maintenance?
3.How hours per week are you going to need to work to pay for all of the costs associated with the car?
4.Besides the costs listed in the spreadsheet, what are some additional costs associated with owning a car?
5.What are the benefits of owning car?
6.Do the benefits outweigh the costs for you personally? Why or why not
Print the spreadsheet and your word document to hand in. Be sure your name and class period are on both papers.