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WorksheetsCost of Owning a Car
Total questions: 20
Worksheet time: 8mins
If your annual earnings are $40,000 and you spend 15% of that on transportation, it would equal
$10,000 per year or $833 per month
$5,000 per year or $417 per month
$4800 per year or $400 per month
$6,000 per year or $500 per month
When we buy food or clothes we must pay sales tax, do we pay sales tax on a large purchase such as a car?
Yes
No
Only new cars, not used cars
A down payment is
A discount given when you buy a new car and you pay cash for it
The interest you pay on a loan for a car
When a car is purchased with a loan, it is part of the purchase price paid with cash at the time of purchase to lower the loan amount.
When you buy a car and borrow money to do so. (which most people do) you must pay interest which increases the total cost of the car.
True
False
Your car gets 30 miles per gallon. You drive 800 miles per month. Gas costs $1.90 per gallon which is correct?
You will use 30 gallons of gas and it will cost you $57
You will use about 27 gallons of gas and it will cost you $51
You will use 22 gallons of gas and it will cost you $42
A disadvantage of buying a new car is it loses value faster than a used car. This is called
Capital gain
Inflation
Depreciation
Amortization
Which is NOT an expense of owning a car?
Repairs & maintenance
Gasoline
License & registration fees
Utilities
Financing a vehicle has advantages & disadvantages. Which is a disadvantage?
You need a small amount of money upfront compared to buying the car
You pay interest and fees on borrowed money
Your credit score is not taken into consideration
You have more flexibility to pay the car off over time
What is the purpose of a Carfax?
Shows the true market value of the vehicle being purchased
Calculates costs of the vehicle's maintenance & repairs
Offers financing options to the consumer
Supplies a vehicle history report to individuals
It is important to comparison shop when purchasing a car. What does comparison shop mean?
Always buy from a local dealership
Take several photos to use for comparison
Compare the true market value of every vehicle
Compare the price & quality from different vendors
What document is often called a "pink slip"?
Proof of insurance
The title
A cashier's check
Car sales receipt
This type of law provides remedy for purchases of cars that fail to meet standards of quality.
Kelley Blue Book
Lemon Law
Edmunds Law
DOT Law
One of the first steps in shopping for a vehicle is to create a(n)
Budget
List of wants
Insurance claim
Email account
The most common form of auto financing is a(n) _______.
lease
rental agreement
installment loan
cash sale
What are good reasons to purchase a used car over a new car? (hint: choose 2 correct answers)
New cars depreciate faster than used cars
Insurance is generally cheaper on a used car
There are typically better financing options on a new car
You can get more car for your money when buying used
Paying full-price for a car in cash has many benefits. This is a better option for someone who...(hint: choose 3 correct answers)
Has the money saved up and can afford to pay in full
Does not have a steady source of income
Wants to get a great price from a private party
Wants to build their credit score
All of the following are advantages of leasing a vehicle EXCEPT
Your monthly payment is typically cheaper
Your auto insurance is typically cheaper
You get a new vehicle more frequently
Standard maintenance is typically included
Financing an auto loan over a longer period of time...(hint: choose 2 correct answers)
Increases your monthly payment
Decreases your monthly payment
Increases the amount you pay in interest
Decreases the amount you pay in interest
In some cases, the used car you are buying may have a lien on it. A lien means
The bank or lender is in possession of the title
The car has been paid for in cash
The car was bought in a different state than it's registered
The car has alignment & maintenance issues
It is important to have a used car inspected. How much does a professional inspection cost?
Approximately $300
Approximately $200
Approximately $100
Approximately $25
