fcs340_document_howToBuyACar

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Brigham Young University, Idaho *

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340

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Economics

Date

Apr 3, 2024

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docx

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Uploaded by JusticeMantis608

How to Buy a Car Instructions In this activity, you will follow the Principles of Effective Car Ownership, from Financing a Car to Comparing New vs. Used. The Purchasing Process will help you make better decisions when purchasing a car. Some of you have never bought a car before. Others have personal experiences of buying cars. Respond to each of the following. Type your answers directly into the worksheet. Save your work and submit it in I‐Learn. Understand the total cost of ownership 1. What do you consider to be an excellent credit score, and why? I think a credit score above 740 would be considered excellent. Above 740 shows that the borrower is financially responsible when it comes to money and credit management. They usually Most of their payments are made on time. 2. Develop an excellent credit score. What are you currently doing to build your credit score ? I have always tried my best to pay all my bills on time. Since I have started working again, I want to pay my credit cards off faster, and put more money in savings. 3. Find two used cars that are at least two years old that you might want to buy. You can use websites such as cars.com , Autotrader , or another car website. Provide a link to those cars and explain why you chose those two particular cars. Car #1 link: Used 2015 Nissan Sentra S For Sale $11,995 | Cars.com Car #1 reason for choice: Nice looking car with low milage and automatic . Car #2 link: Used 2017 Nissan Versa Note S Plus for sale in Columbus, OH 43214: Hatchback Details - 697269593 - Autotrader $9,750 Car #2 reason for choice: Nice looking car with low milage and automatic . 4. If you were really buying a new or used car, you would ask sellers several questions to determine each car’s condition. What two questions would you ask the sellers of these two particular cars? What is the current mileage, and what is the overall condition of the car? Has anything on the car been replaced or updated? 5. The next step would be to run a CARFAX report if you were actually buying a car; however, because CARFAX reports are not free, for this assignment, please list five of the seven things you can find on them as listed in the textbook. A. Number of previous owners, B. Where each owner purchased the car, C. Accident history, D. Repair history, E. Maintenance history BYU-Idaho 1 FCS 340

6. Determine five-year costs to own both cars at www.edmunds.com using the True Cost to Own (TCO) Calculator (this includes depreciation, taxes, licensing and fees, insurance premiums, financing charges, fuel costs, scheduled maintenance, and repairs). What is the TCO for both cars? Car #1 TCO: $31,872 Car #2 TCO: $26,717 7. Determine fair prices at Kelley Blue Book . Knowing both the high and low book value gives you some flexibility when negotiating the price. What are each car's high book prices and the low blue book prices? Car #1 High Book Price: $6,681 Car #1 Low Book Price: $5,142 Car #2 High Book Price: $9,531 Car #2 Low Book Price: $7,206 8. Using your research above, decide which of the two cars you would choose, and tell why. I would choose the 2017 Nissa Versa Note S. The price of this vehicle is closer to the Kelley Blue Book value and has the lowest mileage. 9. What do you think is a fair price for your chosen car? $9,000 10. What is a reasonable offer that is slightly below the fair price that you would offer? $9,000 11. Compare interest rates from multiple institutions Institutions Interest Rate Bank Chase 11.94% for 5 years Credit Union CES 4.55% for 4 years. Dealership Clintonville Motors 8.47% for 5 years Bankrate.com PenFed Credit Union 5.24% What is the best interest rate you found? 4.55% Which institution offers the best rate? CES What is the term of the loan? 4 years What fees are there? I searched and searched; I could not find any information about fees . With the best interest rate you found, search online for an auto loan calculator. Fill in the requested information. How much would your monthly car payment be if you were to finance your vehicle? $205.43 BYU-Idaho 2 FCS 340

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