U4L4 HW Finance

1. How can making a larger down payment save you money when purchasing a car? (Choose two correct answers)

1. a) Your monthly payment will be higher

2. b) Your monthly payment will be lower

3. c) You will pay less interest over the life of the loan

4. d) You will pay more interest over the life of the loan

• a

• b

• c

• d

2. A higher credit score...

1. a) Will help you obtain a lower interest rate on an auto loan

2. b) Will help you obtain a higher interest rate on an auto loan

3. c) Has no impact on the interest rate on an auto loan

• a

• b

• c

3. A longer term length will make your monthly payment lower and you will pay _______ interest when compared to a shorter term length and higher monthly payment.

1. MORE

2. LESS

4. Which statement most accurately describes the difference between leasing and owning a vehicle?

1. a) Leasing is a term used when you purchase a car for the longest term possible

2. b) Leasing a car is making monthly payments to use a car for a fixed period of time, but then you return it without owning it

3. c) Leasing is a term used when you take the car for an initial test drive

4. d) Leasing a car requires a very large down payment, while purchasing a car does not

• a

• b

• c

• d

5. According to the video, what is the first step in purchasing a new vehicle?

1. a) Take multiple vehicles for a test drive to see what features you like best

2. b) Create a budget and check your credit score

3. c) Get an insurance quote for you new vehicle

4. d) Decide which color vehicle you want most

• a

• b

• c

• d

Using the auto loan calculator linked in GC, your monthly payment will be $____ if you take out a $20,000 car loan for 48 months at 4% interest. (round answer to nearest whole dollar)

Using the auto loan calculator linked in GC, your monthly payment will be $____ if you take out a $35,000 car loan for 60 months at 5.5% interest. (round answer to nearest whole dollar)

If you increase your down payment on your car loan, your monthly payment will go ____

• up

• down

If you get a lower APR for your car loan, your payment will go ___

• up

• down

If you extend the term (length) of your car loan, your monthly payment will go​ (a)   and the total cost of your car loan will go​ (b)   .

• down
• up