Car Buying Financial Guide Quiz

Why is it important to know certain financial numbers before buying a car?

• To avoid financial traps and manage payments

• To impress the dealer

• To get a better insurance rate

• To ensure the car is environmentally friendly

What does the 35% rule suggest about car purchase price?

• It should not exceed 35% of your monthly income

• It should not exceed 35% of your gross annual income

• It should be exactly 35% of your savings

• It should be 35% less than the car's market value

What is the purpose of the 10% car rule?

• To reduce car insurance costs by 10%

• To ensure you spend at least 10% of your income on a car

• To limit monthly transportation costs to 10% of your gross salary

• To save 10% of your income for car maintenance

Which of the following is NOT typically included in the true cost to own a car?

• Insurance

• Depreciation

• Fuel costs

• Monthly gym membership

Why should depreciation be considered when calculating the true cost to own a car?

• It affects the car's resale value

• It increases the monthly payment

• It is a tax-deductible expense

• It is covered by insurance

What is a common tactic dealers use when focusing on monthly payments?

• Offering free maintenance for a year

• Extending the loan term to lower monthly payments

• Providing free insurance

• Reducing the car's purchase price

How can focusing on the car's actual purchase price benefit the buyer?

• It guarantees a lower insurance premium

• It allows for more color options

• It ensures the car is delivered faster

• It helps in negotiating better financing terms

Why might a dealer prefer you to finance a car rather than pay cash?

• They earn a bonus from the bank

• It speeds up the purchase process

• It reduces paperwork

• It increases the car's resale value

What is a recommended strategy if you plan to pay cash for a car?

• Inform the dealer upfront

• Negotiate financing terms first, then pay off the loan

• Avoid negotiating the car's price

• Choose the most expensive model

What should you check for when planning to pay off a financed car early?

• Dealer's holiday discounts

• Prepayment penalties

• Extended warranty options

• Car's color availability