Document 33

Car Assignment
Directions: Over the next few days, you will be buying your first car. Most people assume that the sticker
price is the actual amount a car costs, but this is not the case! There are many other factors that go into
the true cost of a car. Follow the steps on this worksheet to complete the assignment.
When buying a car, most people cannot afford to buy it for the sticker price. Usually, people take out a
car loan. Buyers will pay an initial payment (down payment) on the car that will be paid to the car
dealer. The rest of the money will be financed from a car loan. For the sake of this assignment, here are
your rules.
-Your maximum down payment is $2,000
- Your maximum financing is $8,000
-So, your maximum sticker price is $10,000
Cars need gas in order to operate, so it is essential to recognize the price of gas. For this assignment,
determine the current price of gas in our local area. You can shop around for the best price.
The average person travels 20,000 kms per year
The current price of gas is…
Regular- 152.1
Plus- 170.7
Premium- 178.8
You are now ready to buy your car! Follow the steps below in order to complete the assignment!
Step 1: Income
-Assume that you have a part time job at a fast-food restaurant and are making minimum wage. You
work 20 hours per week. Salary: $331
-You pay roughly 20% of your salary to taxes. Take your starting salary and multiply it by .80 $ 26 480
-Divide that number by 12 (months in a year) and write that number here: $2,206.66
This is how much money you have per month for all expenses. A car loan counts as one of these
expenses!
Step 2: Find a Car!
My car is…
Make: Toyota
Model: corolla
Year: 2010
Color: silver
New or used: used
Step 3: Can you afford the car?
- The sticker/list price: $ 5000
- Add 13 % sales tax on the total sale price: $5650
- If I put $2,000 down, I will borrow/finance: $3650
When you borrow money from a financial institution, you will pay interest. Keep this in mind considering
your monthly income!!!!
• YOU SHOULD CALCULATE ALL OPTIONS AND SEE WHAT YOU CAN AFFORD BEFORE SETTLING DOWN
ON A LOAN!!
o **Short loan – higher monthly payments, but you pay less total interest
o **Long loan – lower monthly payments, but you pay more total interest
• Financing: what will the loan to purchase this vehicle cost you? Use the interest rates below which
represent Ont. averages. Circle which loan (36 mo., 48 mo. or 60 mo. that you think you will ask for) 36
month 4.21% 48 month 4.31% 60 month 4.37% 72 month 4.45%
• My monthly payment would be $__82.90_ for _48______ months.
• The total amount I would pay after _48________ months is $___3,979.20_________.
• How much total interest will you pay (Total payments-amount financed)?
$329.20
Step 4: Other Expenses
There are many other expenses that go with the car
GASOLINE:
What is the Highway L per 100km? 5.6 L

What is the city L per 100km for your car? 7.4 L
The average person drives a vehicle a 20,000 km’s per year.
45% (9000 km’s) on the highway and 55% (11,000
km’s) in-city travel.
If gas is currently $___1.62_________ per liter, calculate the total cost for fuel for this car per year.
Liters needed for highway driving $____504________________
Liters needed for City driving $__814_____________________
Total Liters Needed: $___1318_______________________
Total Cost of Gas per year: $______2135.16_________________
Total Cost of Gas per month: $___177.93____________________
CAR INSURANCE
In order to drive in Ontario, you need to be insured in case anything happens
anything happens. o the average cost for teenage car insurance is about $440 per month for an
individual policy or $270 per month as an addon to a parent's policy. Even among teenagers, age is a big
factor in the cost of car insurance. The younger the driver, the more expensive the insurance
Car Insurance = $_____270_________________ per month
• MAINTENANCE
Factor in $1200 per year for maintenance (oil change, tires, fluid changes, etc.)
Maintenance = $______100________________ per month
So how much does it actually cost to own your car based on the financing that you selected (the number
of months that you selected for financing???
Add the following numbers together…
Down Payment: $_______2000______________
Total Financing Payment (including interest for the term you selected):
$________3979.20_____________
Gasoline Expenses per year x the term you selected: $______2135.16 x 4 = $8540.64__________
Car Insurance over the course of the term you selected: $____270 x 48= $12960.00______________
Estimated maintenance: $___4800____________________

TOTAL PRICE TO OWN, operate and maintain my car for the term that I selected … o $__32 279.84__

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Car Assignment

-Your maximum down payment is $2,000

- Your maximum financing is $8,000

-So, your maximum sticker price is $10,000

The average person travels 20,000 kms per year

The current price of gas is…

Step 2: Find a Car!

New or used: used

Step 3: Can you afford the car?

- The sticker/list price: $ 5000

- Add 13 % sales tax on the total sale price: $5650

- If I put $2,000 down, I will borrow/finance: $3650

• My monthly payment would be $__82.90_ for _48______ months.

• The total amount I would pay after _48________ months is $___3,979.20_________.

Step 4: Other Expenses

There are many other expenses that go with the car

What is the Highway L per 100km? 5.6 L

The average person drives a vehicle a 20,000 km’s per year.

45% (9000 km’s) on the highway and 55% (11,000

km’s) in-city travel.

Liters needed for highway driving $____504________________

Liters needed for City driving $__814_____________________

Total Liters Needed: $___1318_______________________

Total Cost of Gas per year: $______2135.16_________________

Total Cost of Gas per month: $___177.93____________________

In order to drive in Ontario, you need to be insured in case anything happens

Car Insurance = $_____270_________________ per month

Maintenance = $______100________________ per month

Add the following numbers together…

Down Payment: $_______2000______________

Estimated maintenance: $___4800____________________

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• The total amount I would pay after _48______ months is $_3,979.20_________.

Liters needed for highway driving $504____________

Liters needed for City driving $814___________________

Total Liters Needed: $_1318_____________________

Total Cost of Gas per year: $2135.16___________

Total Cost of Gas per month: $_177.93__________________

Car Insurance = $_270_____________ per month

Maintenance = $100__________ per month

Down Payment: $_2000________

Estimated maintenance: $_4800__________________