BUYING YOUR FIRST VEHICLE

100 Points

Overview: Students are to prepare for their very first automobile buying experience by conducting an in-depth research analysis on the vehicle of their choice. The only constraint is that the “walk-out” price of the vehicle is not to exceed $28,000. Remember, this project will be combined with your budget that you completed at the beginning of the year.

Objective: To evaluate each student’s understanding of the information presented in class pertaining to the: car buying experience; financing the purchase; and insuring the new vehicle.

Start Date:October 12, 2017

Due Date: October 30, 2017– Beginning of Period

Assignment: To complete the assignment, each student must:

  1. Determine the make and model of a new 2017or 18 vehicle (including options) that they would like to purchase.
  2. Using , research the make and model and include the information in the report.
  3. Build a spreadsheet that summarizes the anticipated offer and each additional cost associated with the purchase. Use % above invoiceor dollars above invoiceto summarize your final offer. Offers should be reasonable for the make and model involved. Use the spreadsheet template provided.
  4. Using The Kelley Blue Book as a reference, research the current value of the vehicle that you will be trading in. Each student will research the following vehicle:
  5. 2008 Honda Accord – LX Sedan 4 door (4 Cylinder – 2.3L VTEC, 5-speed manual transmission)
  6. A/C
  7. 108,983 miles
  8. Power steering
  9. Power door locks and windows
  10. Cruise control
  11. Am/fm stereo with cassette
  12. Zip Code – 32806
  13. Alloy Wheels
  14. Dual front airbags
  15. Tilt wheel
  16. Good condition
  17. Car paid off

*Use KBB’s quoted value on Monday, October 24 for the value of your trade. Print KBB’s quote and include within your project.

  1. Students will contact their insurance agent to obtain an insurance quote that would be associated with the vehicle. The quote must be in hard copy format. Internet quotes are not acceptable. Additionally, the student should, during their discussion, identify the options on the new vehicle that would reduce the annual premium. Students are expected to demonstrate their learning from last year’s Project InVEST unit when it comes to selecting coverage types & limits within their quote.
  2. Students should obtain quotes from three lenders (use only banks or credit unions) pertaining to current auto loan rates and terms. Many dealerships have their own financing incentives and these can be used as one of the three quotes. Internet loan rates are not permitted.
  3. Each student will determine how much they are putting down on the vehicle. The down payment is not to exceed $7,500. The remaining balance will then be financed. As part of the project, the student shall develop an amortization schedule that depicts the terms of the loan (i.e. – monthly payment, amount allocated to principal and interest, total cost of borrowing, etc.). The term of the loan may be 3, 4 or 5 years.
  4. The student shall perform three buying scenarios (offers) for the vehicle and illustrate, using amortization schedules, the financial differences that exist between each of the scenarios. Each scenario will include a written analysis that provides insight into your thoughts and expectations. The written analysis must be at least one paragraph consisting of 6 to 8 sentences.
  5. Students will provide a closing paragraph that summarizes their experience in buying their first car. Students should focus on and discuss the key strategies/terminology presented within the unit.
  6. Required Order:
  7. Cover PageIntroductory Paragraph – 2.5 points. The introductory paragraph should discuss the make & model of the vehicle, owner preferences, selected dealer and other information pertinent to the selection of the vehicle.
  8. New Car Research – 5 points

When considering a new vehicle, check that model’s repair ratings history in the April issue of Consumer Reportsmagazine. Additionally, obtain information on the safety ratings of the vehicle you are looking to acquire. The student with the most information will receive the highest grade, with every other student ranked in relation to the top score.

  1. Kelly Blue Book Trade In Research – 2.5 points
  2. The “Deal” – Parts 1, 2 & 3 – 60 points (20 pts each)
  3. Using TrueCar.com, run an analysis on the car that you are purchasing. Print out information pertaining to the price that others paid near Orlando, FL as well as the range of prices for the vehicle. The range will illustrate the price ranges that TrueCar believes are 1.) Exceptional, 2.) Great, 3.) Good and 4.) Above Market – 5 points
  4. Financing the Purchase – Comparison of 3 lenders’ rates - 5 points(Using Microsoft Word, build a table that illustrates each of the lenders, terms & rates)
  5. Insurance Quote – 5 Points (IT CANNOT BE FROM THE INTERNET)
  6. Project Summary: “What I Learned…” – 2.5 points
  7. Please include your original budget (i.e. – the one that you submitted for a grade at the start of the year; it must be the original with the grade on it) plus a revised budget showing how your new purchase impacts your auto insurance, monthly auto payment, and overall budget. On the revised budget, use a highlighter to illustrate the areas that you had to cut back on to squeeze the new vehicle into the budget. Additionally, highlight, in a different color, the new costs were added to the budget. 7.5 points.
  8. Works Cited – 5 points