Lesson 9-3 | Auto Loans and Leases

Poll

STUDENT SURVEY SAYS

A car is a ____.

• need

• want

• both a need and a want - it's complicated

Essential Questions

• What factors should you consider when getting a car loan?

• What can happen if you miss payments?

• What should you do if you find that you cannot afford the payments?

Financing or Leasing a Car?

Let’s say you’ve found the perfect car to buy.

Congratulations!

However, you probably need to take out an auto loan.

Who should you borrow from - a financial institution like a bank or credit union? Or, should you borrow straight from the dealership?

Multiple Select

Which of these is a source of lending for car buyers??

• bank

• credit union

• car dealership

• Aunt Sally

Financing or Leasing a Car | Consumer Advice

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Multiple Choice

Critical Reading Review

You should get a copy of your credit report before you visit the dealership.

• True

• False

Multiple Choice

Critical Reading Review

Consider saving for a down payment first.

• True

• False

Multiple Choice

Critical Reading Review

You have two financing options:

direct lending or dealership financing.

• True

• False

Multiple Choice

Critical Reading Review

It's best to settle the possibility of a trade-in before you’ve negotiated the best possible price for your new car so the seller can adjust the sales price of the car higher to make up for a generous trade-in offer.

• True

• False

Multiple Choice

Critical Reading Review

Cars quickly lose value once you drive off the lot so it's important to go with the longest-term financing, so you can owe way more than the car is worth.

• True

• False

Multiple Choice

Critical Reading Review

Ask questions about the terms of the contract only after you sign on the dotted line.

• True

• False

Multiple Choice

Critical Reading Review

When you lease a car, you’re paying for the right to use it for an agreed amount of time and miles.

• True

• False

Multiple Choice

Critical Reading Review

Late or missed payments are no biggie.

• True

• False

Drag and Drop

The larger your down payment amount, the ​

Placeholder

your monthly payments

Drag these tiles and drop them in the correct blank above

smaller

larger

Drag and Drop

The higher your credit score is, the ​ ​

Placeholder

your APR.

Drag these tiles and drop them in the correct blank above

lower

higher

Drag and Drop

The shorter your term length, the ​

Placeholder

your monthly payments, and the ​

Placeholder

the total interest you will pay.

Drag these tiles and drop them in the correct blank above

larger

least

most

smaller

How Do Car Loans Work?

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Multiple Select

What are two reasons someone might purposely choose a HIGHER monthly payment?

• They can afford the higher payment

• They want to pay off the loan quicker

• They are determined to go broke every month

• They have more money than good sense

Multiple Select

There are ways to lower your monthly payment.

They are: ______________ and ______________.

• larger down payment

• smaller down payment

• shorter term

• longer term

Multiple Select

Which of these is a reason to choose a LEASE over a BUY on a car??

• Keep up with the latest style, safety features and car comforts

• A leased vehicle has a lower monthly payment

• Leased cars are always under warranty

• Never ending monthly payments on a leased cars

• Leased cars may be driven unlimited miles

Open Ended

Identify one thing YOU SHOULD DO if your car loan suddenly becomes too expensive and one thing YOU SHOULD NOT do in that situation.

What to do If You Can’t Afford Your Car Payment - Experian

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Match

Match the following

Here's what to do when you cannot afford your car payment

• Voluntarily Surrender

• Trade In or Sell Your Vehicle

• Refinance Your Car Loan

• Request a Deferral

• Contact Your Lender

giving it back to your lender

trade it in for something more affordable, or sell it and buy a used vehicle

replacing your current loan with a new one, usually from a different lender

will allow you to skip a small number of payments without penalties or fees

Call and explain that you're at risk of falling behind on your loan

• giving it back to your lender

• trade it in for something more affordable, or sell it and buy a used vehicle

• replacing your current loan with a new one, usually from a different lender

• will allow you to skip a small number of payments without penalties or fees

• Call and explain that you're at risk of falling behind on your loan

Multiple Select

Which of these is a source of lending for car buyers??

• bank

• credit union

• car dealership

• Aunt Sally

Multiple Choice

Critical Reading Review

When you lease a car, you’re paying for the right to use it for an agreed amount of time and miles.

• True

• False

Multiple Select

Which of these is a reason to choose a LEASE over a BUY on a car??

• Keep up with the latest style, safety features and car comforts

• A leased vehicle has a lower monthly payment

• Leased cars are always under warranty

• Never ending monthly payments on a leased cars

• Leased cars may be driven unlimited miles

Multiple Select

"Slow paying" or "no paying" your car loan may result in which of the following consequences??

• Damage to your nearly perfect Credit Score

• Scary threatening letters from debt collectors

• Car Repossession

• A gut punch to your self-esteem and having to get rides to and from work on City Bus

Open Ended

EXIT TICKET

What advice would you give your friend Charlie who has fallen into hard times after he lost his job at Peanuts and can no longer make payments on his car loan??