For this project, include screenshots of all information you find online.
Obviously, new cars cost more than used ones. But how much more? That question isn’t as easy as you might think because used cars are more likely to require expensive maintenance and repairs.
Pick a brand new car model that you might be interested in buying.
Make sure that this model has been available for at least the last 4 years.
NEW CAR – PURCHASE
- Find the price of the new car as advertised by at least two car dealerships in Southern California. In your presentation/report, include the names of the dealerships, and preferably a screenshot of the information on their website
- Find the TOTAL price of the new car, including:
- Purchase price as advertised
- Sales tax (7.75% of purchase price)
- $375 for fees and registration
- Find the down payment amount
- Assume you will pay 15% of the total price as a down payment, and finance the rest as a car loan
- Find the loan amount (Total price – down payment)
- Find a current interest rate for a 5-year loan on a new car
- Be sure you find a NEW car loan rate
- Interest rates on used cars are almost always different than on new
- Check a few different banks and find the best rate you can
- In your presentation/report, include the names of the bank(s), the date of the interest rate quote, and preferably a screenshot of the information on their website
- Be sure you find a NEW car loan rate
- Find the monthly payment
- Describe how you did the calculation for the total amount – Did you use the monthly payment formula, an online financial calculator (which one), etc.
- Find the total amount you will pay for the car including the down payment and all 60 monthly payments
USED CAR – PURCHASE
Follow the same steps above, but now for a used car (at least 4 years old) of the same car model.
When you find the loan interest rate, make sure you find the rate for a USED car.
TRUE COST OF OWNERSHIP
The website Edmunds.com is an excellent source of information on pricing and maintenance costs for new and used vehicles.
- Google/search “Edmunds true cost to own”
- Click the link “Cost of Car Ownership – 5-Year Cost Calculator | Edmunds.com”
- Enter the information for your new car
- On a separate tab on the same webpage, enter the information for your used car
- What is the Edmunds 5-year “True Cost to Own” estimate for each car?
- Show the cost break-down graph for each car (blue bars with dollar amounts)
- What costs are higher for the new car? Why are these costs higher for new cars?
- What costs are higher for the used car? Why are these costs higher for used cars?
- Which car would you choose for yourself, and why?