3.3 Auto Loans and Leases (Due 10/28 SoC)

Last updated about 1 year ago

33 questions

Note from the author:

In this lesson, you will learn to:
Utilize knowledge and strategies to get the best possible financing terms (that meet their individual needs and budget) for a new or used car
Explain the difference between a car loan and lease as well as advantages and disadvantages of each
Have a backup plan if they find themselves unable to afford their car payments
Complete the entire document and use complete sentences for full credit.

Instructions

In this lesson, you will learn to:
Utilize knowledge and strategies to get the best possible financing terms (that meet their individual needs and budget) for a new or used car
Explain the difference between a car loan and lease as well as advantages and disadvantages of each
Have a backup plan if they find themselves unable to afford their car payments
Complete the entire document and use complete sentences for full credit.

Required

3.3 Auto Loans and Leases (Due 10/28 SoC)

Last updated about 1 year ago

33 questions

Note from the author:

In this lesson, you will learn to:
Utilize knowledge and strategies to get the best possible financing terms (that meet their individual needs and budget) for a new or used car
Explain the difference between a car loan and lease as well as advantages and disadvantages of each
Have a backup plan if they find themselves unable to afford their car payments
Complete the entire document and use complete sentences for full credit.

Instructions

In this lesson, you will learn to:
Utilize knowledge and strategies to get the best possible financing terms (that meet their individual needs and budget) for a new or used car
Explain the difference between a car loan and lease as well as advantages and disadvantages of each
Have a backup plan if they find themselves unable to afford their car payments
Complete the entire document and use complete sentences for full credit.

Required

Imagine your life as an independent adult, after you’ve graduated from school.

Do you have a car? _______ 

      Is the car a need or a want? _______ 
     
      What kind of car do you envision? _______ 
 
If you don’t have a car, how are you getting around instead? _______

Required

What is your dream car? Upload a picture.

Required

When you wake up from your dream, what car are you really driving?

Financing or Leasing a Car
Let’s say you’ve found the perfect car to buy. Congratulations! However, you probably need to take out an auto  loan. Who should you borrow from - a financial institution like a bank or credit union? Or, should you borrow straight from the dealership? Read the section “Financing a Car” of this article to see which option is better for you. Then, answer the questions.

Required

How are direct lending and dealer financing similar?

Required

Which seems like the better option?

How to Get the Best Auto Loan
Watch the video provided and then fill in the blanks at the right.

Required

The larger your down payment amount, the _______ your monthly payments.

Required

Understanding Auto Loan Basics
Read this article to understand the implications of car loans.

Required

There are ways to lower your monthly payment (larger down payment or longer term). What are two reasons someone might purposely choose a HIGHER monthly payment?

1. _______ 

2. _______ 

Auto Loan vs. Lease
Watch this video and then list out the advantages and disadvantages of a lease.

Required

List 3 advantages of taking out a lease on a car.
_______ 
_______ 
_______ 

Required

List 3 disadvantages of taking out a lease on a car.
_______ 
_______ 
_______ 

Day 2 10/25/22

COMPARE: Auto Loans
Molly is celebrating her amazing new career and wants to upgrade her junky old car for a shiny new Volkswagen Jetta. She heads to Volkswagen’s website and sees the following financing deals:

Part I: 0% APR sounds PERFECT!
Answer the following questions using the details from the 0% APR offer above. Please round all answers to the nearest dollar.

Required

Molly has a $2500 down payment saved for this purchase, and the dealer’s $1500 Cash Allowance will come straight off her total. How much loan does Molly need?

Required

How much total interest will Molly pay using this plan?

Required

Part II: Maybe the 1.9% is more manageable?
Alright, bet! Look at that monthly payment from Question 2 above. Molly cannot afford the monthly payment using the 0% financing. She opens up Bankrate’s Loan Calculator to see how much she’d pay with the other financing option. Please round all answers to the nearest dollar.

Required

Remember that Molly has a $2500 down payment saved for this purchase. The dealer will take the $500 Cash Allowance straight off her total. How much loan does Molly need?

Required

Day 3 10/26/22

Part III: Reading the Fine Print
Excited to buy her dream car, Molly rushes into her local Volkswagen dealership. Molly picks out a car, sits down at the financing desk, and hears the following:

“Well, we ran your credit history. You’ve got a really thin file -- just a year’s worth of student loan payments. The deal you saw was for ‘well qualified buyers.’ The best deal we can offer you is 6.6% for 60 months. A little more bad news -- the cash allowance is also based on credit history, so you don’t qualify for $500. That said, you’re excited about a Volkswagen, and I want to see you driving one, so I can do $400 for you!”

Required

Molly still has a $2500 down payment. How much loan does Molly need?

Required

Part IV: In Summary

Required

What valuable lessons did Molly learn about auto financing?

Required

Molly desperately wants a Volkswagen Jetta, and this new monthly payment is pretty high again. What suggestions do you have for making her dream become reality?

Day 4 10/26/22

MATH: Depreciation of Car Value
In life, you may not always see things losing value at a steady rate.  Often things with a limited lifespan, like many electronics and cars, will lose more value in the first few years and less value as time goes on.  This concept is called depreciation and it can be modeled using exponential decay.

Required

3.3 Auto Loans and Leases (Due 10/28 SoC)

3.3 Auto Loans and Leases (Due 10/28 SoC)

What is your dream car? Upload a picture.

When you wake up from your dream, what car are you really driving?

Financing or Leasing a Car

How are direct lending and dealer financing similar?

Which seems like the better option?

How to Get the Best Auto Loan

Understanding Auto Loan Basics

Auto Loan vs. Lease

Day 2 10/25/22

COMPARE: Auto Loans

Part I: 0% APR sounds PERFECT!

Molly has a $2500 down payment saved for this purchase, and the dealer’s $1500 Cash Allowance will come straight off her total. How much loan does Molly need?

How much total interest will Molly pay using this plan?

Part II: Maybe the 1.9% is more manageable?

Remember that Molly has a $2500 down payment saved for this purchase. The dealer will take the $500 Cash Allowance straight off her total. How much loan does Molly need?

Day 3 10/26/22

Part III: Reading the Fine Print

Molly still has a $2500 down payment. How much loan does Molly need?

Part IV: In Summary

What valuable lessons did Molly learn about auto financing?

Molly desperately wants a Volkswagen Jetta, and this new monthly payment is pretty high again. What suggestions do you have for making her dream become reality?

Day 4 10/26/22

MATH: Depreciation of Car Value

What is your dream car? Upload a picture.

When you wake up from your dream, what car are you really driving?

Financing or Leasing a Car

How are direct lending and dealer financing similar?

Which seems like the better option?

How to Get the Best Auto Loan

Understanding Auto Loan Basics

Auto Loan vs. Lease

Day 2 10/25/22

COMPARE: Auto Loans

Part I: 0% APR sounds PERFECT!

Molly has a $2500 down payment saved for this purchase, and the dealer’s $1500 Cash Allowance will come straight off her total. How much loan does Molly need?

How much total interest will Molly pay using this plan?

How much will Molly’s monthly payment be if she makes 36 monthly payments? (Note: You don’t need to use the Bankrate calculator from below, because there’s no interest if she takes the first offer)

When Molly adds all her payments, how much will the car cost her?

Part II: Maybe the 1.9% is more manageable?

Remember that Molly has a $2500 down payment saved for this purchase. The dealer will take the $500 Cash Allowance straight off her total. How much loan does Molly need?

Using the Loan Calculator and the 1.9% APR offer, how much will Molly’s monthly payment be?

How much total interest will Molly pay using this plan?

When Molly adds all her payments, how much will the car cost her using this plan?

Day 3 10/26/22

Part III: Reading the Fine Print

Molly still has a $2500 down payment. How much loan does Molly need?

How much will Molly’s monthly payment be using the Bankrate calculator?https://www.bankrate.com/loans/loan-calculator/

How much total interest will Molly pay using this plan?

When Molly adds all her payments, how much will the car cost her?

Part IV: In Summary

What valuable lessons did Molly learn about auto financing?

Molly desperately wants a Volkswagen Jetta, and this new monthly payment is pretty high again. What suggestions do you have for making her dream become reality?

Day 4 10/26/22

MATH: Depreciation of Car Value

Tara decides to keep the car for a few years longer. If she decides to trade in her car 8 years from now, how much will it be worth? Write your final solution rounded to the nearest dollar.

JaRhondaLynn bought a Nissan Sentra about 4 years ago. Her car depreciates at a rate of 7% annually. The value of her Nissan was $18,701.30. What is the value of her car when now? Write your final solution rounded to the nearest dollar.

Maggie’s Ford Expedition was purchased for $38,000. Her car depreciates at a rate of 10% annually. How much will her car be worth 8 years from now? Write your final solution rounded to the nearest dollar.

How much will Molly’s monthly payment be if she makes 36 monthly payments? (Note: You don’t need to use the Bankrate calculator from below, because there’s no interest if she takes the first offer)

When Molly adds all her payments, how much will the car cost her?

Using the Loan Calculator and the 1.9% APR offer, how much will Molly’s monthly payment be?

How much total interest will Molly pay using this plan?

When Molly adds all her payments, how much will the car cost her using this plan?

How much will Molly’s monthly payment be using the Bankrate calculator?https://www.bankrate.com/loans/loan-calculator/

How much total interest will Molly pay using this plan?

When Molly adds all her payments, how much will the car cost her?

Tara decides to keep the car for a few years longer. If she decides to trade in her car 8 years from now, how much will it be worth? Write your final solution rounded to the nearest dollar.

JaRhondaLynn bought a Nissan Sentra about 4 years ago. Her car depreciates at a rate of 7% annually. The value of her Nissan was $18,701.30. What is the value of her car when now? Write your final solution rounded to the nearest dollar.

Maggie’s Ford Expedition was purchased for $38,000. Her car depreciates at a rate of 10% annually. How much will her car be worth 8 years from now? Write your final solution rounded to the nearest dollar.

How much will Molly’s monthly payment be using the Bankrate calculator?

https://www.bankrate.com/loans/loan-calculator/

How much will Molly’s monthly payment be using the Bankrate calculator?

https://www.bankrate.com/loans/loan-calculator/