MU-9: Buying a Car Review

Mason is starting his car search. All of the following are questions he should ask himself EXCEPT…

• What are my needs?

• How much will it cost to maintain the car?

• What type of car do my friends drive?

• How long do I want to keep this car?

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Which of the following statements is TRUE about the different types of cars?

• You can pick any type of car because they all meet the same needs

• SUVs are great options for drivers who expect to have 1 passenger a few times a week

• If your budget is tight, it’s a good idea to shop for a luxury car

• With a hybrid car, you will likely fill your gas tank less frequently

If you choose to buy a car through a traditional private-party sales platform, it’s a good idea to remember that…

• These platforms typically have higher prices than you would find at a dealership

• You should ask a lot of questions to make sure the offer is legit and not a scam

• The sellers are not in a rush to sell their car, so you have to be patient

• All of the platforms offer extensive protection for buyers

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All of the following are reasons that your car insurance might increase EXCEPT:

• Getting into a car accident

• Moving to a big city with a lot of traffic

• Buying a more expensive car that has a greater likelihood of being stolen

• Decreasing your yearly mileage

Which of the following is TRUE about cars and depreciation?

• Cars depreciate in value most strictly based on mileage

• Cars lose 10% of their value the moment you drive it off the lot

• Car depreciate most after 10 years of use

• Cars do not depreciate if they are maintained and kept in good condition

Which of the following costs will not change the more you drive your car?

• Amount of depreciation

• Insurance premium

• Fuel Costs

• State Registration Fees

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What is one advantage of buying a used car over a new car?

• Used cars always come with warranties

• Used cars tend to have a better value because new cars depreciate faster

• Used cars offer peace of mind due to their guaranteed reliability

• Used cars always have the latest features and technology

Jack has a subprime credit score and is shopping around for an auto loan. Which of the following lenders is likely to give him a loan with the MOST favorable terms?  

• Dealership

• Bank

• Credit Union

• Online Lender

Which of the following statements about certified pre-owned (CPO) cars is TRUE?

• Certified pre-owned cars are generally cheaper than pre-owned cars

• Certified pre-owned cars are usually less reliable than pre-owned cars

• Certified pre-owned cars tend to have higher mileages than pre-owned cars

• Certified pre-owned cars come with manufacturer warranties while pre-owned cars may not

One key difference between leasing and buying a car is..

• Cars that are bought do not depreciate in value but leased cars do

• At the end of a lease, you must return your car but when you buy, you get to keep the car and its value

• When you lease a car, you do not pay any interest but when you use a loan to buy a car, you will pay interest

• Buying a car has lower monthly payments because the dealership is taking less risk by selling you the car instead of leasing it