22. COMPLETE: Project-Researching a Car Purchase (Due 5/29; accepted for credit until 6/1)

COMPLETE: Project-Researching a Car Purchase
(worth 30 pts.)

Use this google spreadsheet for your assignment.

1. Go to KSL Classifieds and choose 2 different cars you are interested in. One should be something you believe you would be able to afford on your income within the next 2-3 years. The other should be one that you would like to own when you have an established career. It could be a flashy sportscar or just a newer vehicle.
2. Fill in the spreadsheet the make, model, year, asking price, and at least 3 options that the car has (type of engine, sunroof, CD player, security system, etc...).
3. Go to Kelley Blue book to find out the blue book value of the cars you are researching (most of the info. you need should be in the car ad, however, if you do not have all of the information you need, get as close as possible).Note that if the value is below what the vehicle's asking price is, you would want to consider offering a lower price for it.
4. Check with 2 banks or credit unions to get an idea of what interest rate they would give for a car loan for those particular cars (assuming a good credit score).
5. Use this auto loan calculator to find out what the payments for the car would be for a 3 yr (36 month) loan. Use an average of the interest rate that the 2 banks quoted you. Remember that
when purchasing the car,your net monthly income (minus other credit card & loan payments) would/should be at least 5 times the amount of the payment. When considering car loans, keep in mind depreciation. If you get a long loan term for a car purchase, the car may end up not being worth what you owe on it when you want to sell it.
6. Add the car payments per month to come up with the total amount of the loan (for example: 400 x 36 payments=$14,400). Then list the amount that will be paid in interest (this is the total amount minus the amount you wanted to borrow. In this example:$14,400-whatever the amount was you were borrowing).
7. Call your parent's insurance company or use an insurance website to get a quote for insurance for each of your 2 cars. You will record the quote for a 6-month term. You can ask for liability and collision coverage but just their lowest coverage amount.
8. At the bottom of your spreadsheet, write a paragraph about what you learned from the assignment. Did anything you found out surprise you? Do you feel prepared to purchase a car now?
9. Be sure you have included all of the information on the spreadsheet and submit the link to your google docs spreadsheet here, following these instructions.