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Context 12 - Buying a Car

Last updated over 1 year ago
29 questions
Note from the author:
MMR Resources
Resource List:
  • Better Money Article
  • Top Mistakes When Buying a Car
  • Turn Your Car Payment into a Million Dollar Retirement
  • The Truth About Buying a Car
Make a copy of this Google Sheet to calculate the total cost of your loan.
1

Screenshot a picture of a cheap (under $5,000) car you found for sale online and paste it here.
(You may want to go ahead and paste this into #9 as well)

1

What is an IRA?

1

What does it mean for money to compound annually?

1

How much will you deposit? How much interest will you earn after 25 years? How much total will you have saved for retirement?
IRA Calculator

1

What is the average cost to repair your car? (You'll need to Google this information)

1

Estimate the amount it will cost to insure your car? Explain the type of insurance you will get (full coverage vs. liability)

1

Pros of making choice A (buying a cheap car and putting the rest in an IRA)

1

Cons of making choice A

1

Screenshot a picture of a cheap (under $5,000) car you found for sale online and paste it here.

1

Which bank are you going to use to save your money? What is their interest rate on a savings account? Is there anything else that it’s important to note about the savings account?

1

What kind of interest does a savings account earn (compound vs. simple)? Why is that important?

1

How much will you deposit? How much interest will you earn by the time you enroll in college? How much will you have in total?
Savings Acct Interest Calculator

1

What is the average cost to repair your car? (Hint: This is the same as #5)

1

Estimate the amount it will cost to insure your car? Explain the type of insurance you will get (full coverage vs. liability)
(Hint: This is the same as #6)

1

Pros of making choice B (buying a cheap car and putting the rest in a savings account)

1

Cons of making choice B

1

Screenshot a picture of an expensive (over $10,000) car you found for sale online and paste it here.

1

Which bank are you going to use to get your car loan?

1

What is the interest rate on your loan? What is the length of the loan? Is there anything else that it’s important to note about the loan?
Auto Loan Calculator (You'll want this for #24 as well)

1

What kind of interest does the loan accrue? Note: there are different types of car loans https://roadloans.com/blog/different-types-of-car-loans-explained

1

What’s the difference between interest rate and annual percentage rate (APR)?

1

What does it mean that auto loans are amortized?

1

Are there any fees associated with your loan? Is there anything else about your loan that needs to be noted.

1

What’s the total you will pay in interest for the life of the loan? Use the calculator results from #19 to help.

1

What is the average cost to repair your car? (Google will help you find this)

1

Estimate the amount it will cost to insure your car? Explain the type of insurance you will get. Note: Insuring a car that has a loan on it is more expensive.

1

Pros of Making Choice C (taking a loan out for a reliable car)

1

Cons of Making Choice C

1

What is your choice? Explain your reasoning. (Give at least three good reasons to convince your parents.) Acknowledge any cons that exist and explain why your pros outweigh your cons. Write at least 2 paragraphs. Look up persuasive writing tips to help you make your case. Include supporting evidence that you have collected.