Worksheets1. Budgeting and Researching a Vehicle
Total questions: 54
Worksheet time: 27mins
What percentage of net income does the average U.S. consumer spend on transportation?
15–17%
5–10%
Which of the following are common transportation expenses to include in a budget? Select all that apply.
Vehicle purchase (monthly payment)
Fuel
Insurance and maintenance
Parking tickets
Public transportation
A new car is described as which type of budget item, and what does that mean for planning?
Variable expense that can be ignored monthly
Fixed expense that must be included in the monthly budget
Which factors are important to compare when choosing a vehicle?
Brand reputation, dealership location, sales tax
Purchase price, maintenance, gas, insurance
What percentage of your monthly net income should you spend on a vehicle?
No more than 15%
No more than 20%
Which options are categories for car needs and wants?
Size: Small/Medium/Large
Fuel type: Gas/Hybrid/Electric
Condition: New/Certified Pre-Owned/Used
Other: Style, Color, Features
Financing: Lease/Loan/Cash
What is a loan in car financing?
Money borrowed that must be repaid with interest
An insurance policy
Which option correctly matches each of the 3 C’s of Credit to its focus?
Capacity—ability to repay
Character—reputation for repayment
Collateral—assets securing the loan
Capacity—assets securing the loan
Collateral—income for payments
Where can you get a car loan?
Auto insurance provider
Bank
Which statement about APR in a car loan is correct?
APR is the cost of borrowing as an interest rate
APR is the length of the loan
What does principal mean in a car loan?
Money borrowed
Length of loan
A dealership arranges financing for a vehicle. What type of loan source is this?
Credit card cash advance
Finance companies through dealerships
What does making a down payment on a car mean?
Paying an upfront amount to reduce the amount financed
Increasing the APR to qualify for financing
Which website helps you find car prices and reliability?
LinkedIn.com
KBB.com
Under TILA, what must lenders disclose to borrowers?
Annual Percentage Rate (APR)
Income tax withholding rate
Which best describes the Truth in Lending Act (TILA)?
A federal law requiring lenders to disclose APR, loan terms, and total cost
A state rule that sets loan limits
Credit scores measure which trait of a borrower?
Trustworthiness to repay debt
Earning potential
What is the usual range for credit scores?
300–850
400–900
Which organizations provide free credit reports? Select all that apply.
Experian
Equifax
TransUnion
Federal Reserve Bank
annualcreditreport.com
Which actions can improve your credit score? Select all that apply.
Pay bills on time
Keep balances low
Open several new credit accounts at once
Avoid unnecessary credit applications
Max out credit cards
Which item must TILA disclose about a loan’s cost?
Loan terms like payment schedule and interest calculation
Seller’s profit margin
Which action helps you stay organized when preparing for a loan?
Only save the final loan agreement
Keep all loan documents together
Which question should you ask before taking a loan?
Do I have a down payment or trade-in?
What color should the lender’s logo be?
Select all questions to ask before a loan to check affordability and terms.
Do I have a down payment?
What interest rate do I qualify for?
How long should my loan term be?
Should I sign without checking my credit report?
Which online tools estimate loan costs and payments?
Bankrate
NerdWallet
KBB loan calculators
Social media polls
What is vehicle leasing?
A permanent purchase
A long-term rental with upfront and monthly payments
What are the typical costs in a vehicle lease?
No upfront costs and no monthly payments
An upfront fee and monthly payments
What is a common advantage of leasing a car?
Lower monthly payments, so you can get newer cars more often
Unlimited miles
Which of the following is a drawback of leasing? Select all that apply.
No ownership of the vehicle at lease end
Mileage limits that can lead to fees if exceeded
Ability to modify the car freely without penalties
Automatic title transfer to the lessee at lease end
What can a lessee do at the end of a lease?
Return or buy the car
Sell the car
Which item is usually included with vehicle leases?
Routine maintenance
Comprehensive insurance
What should you do first when buying a car?
Know your needs and budget
Test drive cars
Which actions come after planning and before paperwork when buying a car? Select all that apply.
Visit several dealerships to compare options
Negotiate price and terms
Consider a co-signer if you’re new to credit
Bring someone you trust
What should buyers new to credit do when finalizing a deal?
Avoid test driving
Consider a co-signer
If you can't make your car payment, what should you do and what could happen if you don't pay? Select all that apply.
Call your lender to discuss options
Pay what you can toward the balance
Repossession and credit score damage if you fail to pay
Ignore notices until the lender stops contacting you
What is the purpose of car insurance?
It protects against financial loss from accidents or damage
It removes all driving risks
Which are valid ways to get car insurance? Select all that apply.
Buy directly from a company or agent
Compare coverage online
Get coverage from your mechanic
Buy only through your employer’s benefits
Which is an example of transferring risk in personal finance?
Driving less
Buying car insurance
Which factors affect car insurance premiums? Select all that apply.
Address and distance to work
Age and driving record
Credit and grades
Color of the car and preferred music
Which statement accurately reflects the legal insurance requirement?
Collision insurance is required in most states
Liability insurance is required in most states
Which insurance pays for damage if you hit another car or tree?
Collision
Liability
Which does comprehensive insurance usually cover?
Scratches from a car wash
Theft, fire, or flood damage
What is needed for full coverage of accident and non-accident damage?
Collision insurance only
Both collision and comprehensive insurance
After an accident, what should you do first?
Ensure safety and call 911
Exchange information
What does deductible mean when filing a claim?
Your out-of-pocket amount to pay
A penalty for minor incidents
Which statements about premiums and deductibles are correct?
Higher deductible means lower premium
Lower deductible means higher premium
Deductible does not affect premium
Premiums do not depend on claim history
Which actions can lower car insurance premiums? Select all that apply.
Maintaining good grades
Keeping a good driving record
Completing defensive driving courses
Only driving during daytime hours
Which item should you check on your car every month?
Replace brake pads
Check oil level
How often should you change your car’s oil?
Every 3,000–5,000 miles
Once a year
When should tires be rotated?
Never on front-wheel drive cars
At every other oil change
Used-car due diligence: Which action is advised before purchasing a used vehicle?
Skip the test drive to avoid wear
Review the car’s maintenance records (CARFAX)
Ignore cosmetic damage and focus only on price
Replace all fluids immediately
Vehicle type comparison: Which statement best describes electric vehicles based on the guidance?
Electric = more maintenance and cheaper repairs
Electric = less maintenance but higher upfront cost
Electric = balance of gas and hybrid characteristics
Electric = same maintenance and cost as gas
Vehicle type comparison: Which statement best describes gas vehicles based on the guidance?
Gas = more maintenance, cheaper repairs
Gas = less maintenance but higher upfront cost
Gas = balance of both
Gas = maintenance identical to electric
Vehicle type comparison: Which statement best describes hybrid vehicles based on the guidance?
Hybrid = balance of both
Hybrid = least maintenance and highest upfront cost
Hybrid = most maintenance and cheapest repairs
Hybrid = no need for routine maintenance
