Chapter 8 project

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Des Moines Area Community College *

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Economics

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Feb 20, 2024

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Chapter 8 Project: Hybrid Vehicle verses Standard Vehicle Here is your scenario to consider: You want to buy a new car. You want to be environmentally conscious and get a hybrid vehicle, but you know they cost more. The question then becomes, “Is it worth the extra money at the time of purchase?” You need to do a financial comparison of the costs associated with each type of vehicle and write a short report following the guidelines below. Guidelines • To make comparisons more equal, find a vehicle that offers a gas model and a hybrid model. For example, the Toyota Highlander comes in both versions. • Assume you plan to purchase a new vehicle, not used. • Use the website Kelley Blue Book, www.kbb.com, to estimate vehicle prices. • You have $8000 to use as a down payment for this vehicle. • You plan to keep it for 10 years (that does not mean that your loan is going to be for 10 years...) Requirements: 1. Type your response as a word document (you may type on this document if you would like to). 2. Include an opening that explains your situation. 3. Follow with your body of evidence (tables, formulas, charts, calculations, explanation, images, etc.) outlining the financial situation for each vehicle. You are encouraged to think of all the different factors that may affect your decision and include them in your body of evidence. 4. End with a conclusion summarizing your findings and decision. 5. Please provide enough details so that anyone reading your response can understand what you did. 6. Upload your completed word document to the assignment submission. Note: After you submit the project, the chapter 8 discussion board will become visible to you in Blackboard. A.For this scenario I choose to do something that would fit my situation as a college student who is about to graduate. I need an all around car that is efficient, has cargo decent space, and is safe so insurance costs aren’t high. My two options are almost identical, but don’t have the same type of unit of power. I’ve narrowed it down to a 2022 Mini Cooper and a 2022 Mini Cooper se. B. B.1 Here is the information on the 2022 Mini Cooper se. Price:$30,000 Range:110 miles Mpg: 119 city / 100 highway Cargo space: 7.6 to 34 feet of space Estimated insurance monthly:70.28 Monthly payment (with 4.0 interest rate for 4 years):$501.68 Estimated value after 10 years:$8,400 Crash rating: good Cost of refueling:0

B.2 Here is the information on the 2022 Mini Cooper. Price:$25,000 Range:300 miles Mpg: 29 city / 38 highway Cargo space:8.7 to 40.7 feet of space Estimated insurance monthly:50.36 Monthly payment (with 4.0 interest rate for 4 years):$383.84 Estimated value after 10 years(72% deprecation over a decade):$7,000 Crash rating:good Cost of gas for 10 years:10,550 After looking through progressive to see how much insurance would be, Calculating my monthly payment, and seeing the overall cost of refueling and depreciation of both cars I think I’ve made my choice. I believe the mini Cooper Se (the electric vehicle) would be the better option in the long term. Annual cost of gas would be about $1,055 for the gas motor model, that brings me to $10,550 in a decade of fuel cost. Not taken into account is that the price of fuel will probably rise, and I calculated this with a fuel price of $2.40. Insurance would be a little bit more expensive on a electric vehicle, but that’s because the equipment that comes with it is more expensive. The electric model also has more cargo space and has a pretty good range, considering it’s free to charge at Hy-Vee. In the long term I think electric vehicles will be dominating the market within the next 5 years or so.

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