1 / 27

Car Purchases and Leases

Car Purchases and Leases. 6.8. Financing Car Purchases. Formulas: Total # of monthly payments x Amount paid per month = Total amount of monthly payments Total amount of monthly payments + Down Payment = Total Paid Total Paid – Delivered Price = Finance Charge.

charde-finch
Télécharger la présentation

Car Purchases and Leases

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Car Purchases and Leases 6.8

  2. Financing Car Purchases • Formulas: • Total # of monthly payments x Amount paid per month = Total amount of monthly payments • Total amount of monthly payments + Down Payment = Total Paid • Total Paid – Delivered Price = Finance Charge

  3. Financing Car Purchases (Example) The delivered price of Josh’s car is $23,560. He makes a $2,000 down payment. He pays 48 monthly payments of $560. What is the amount Josh paid for his car? What was the finance charge?

  4. Financing Car Purchases (Example) • What is the amount Josh paid for his car? 48 x $560 = $26,880 $26,880 + $2,000 = $28,880 (total paid)

  5. Financing Car Purchases (Example) • What was the finance charge? $28,880 - $23,560 = $5,320

  6. Financing Car Purchases (A) • Steve bought a used truck for $9,650. He paid a $2,650 down payment. He also paid 36 monthly payments of $234.30. What is the amount Josh paid for his car? • 36 x $234.30 = $8,434.80 • $8,434.80 + $2,650 = $11,084.80

  7. Financing Car Purchases (B) • Brit bought a new car for $47,851. He paid a $4,500 down payment. He also paid 60 monthly payments of $805.47. What is the finance charge on the car? • 60 x $805.47 = $48,328.20 • $48,328.20 + $4,500 = $52,828.20 • $52,828.20-$47,851 = $4,977.20

  8. Cost of Leasing • Lease Contract • Lease Price • Residual Value • Interest Rate • Lease Term • Security Deposit • Loan Fee • Registration Fees • Mileage Allowed

  9. Cost of Leasing (Example) James leased a car at $307/ month for 48 months and a down payment of $995. At the end of the lease he had to pay $0.22 for the 2,800 miles over the limit. What were his total lease costs?

  10. Cost of Leasing (Solution) • 48 x $307 = $14,736 (total lease payments) • $0.22 X 2,800 = $616 (excess miles charge) • $14,736 + $616 + $995 = $16,347 (total lease costs)

  11. Cost of Leasing (C) Candy has a 2-year car lease with $528 monthly payments. Mileage limit was 12,000 miles per year. She is charged 20 cents for every mile over the limit. Her total miles for the 2 years was 30,850 miles. What was the total cost of the lease over the 2-years?

  12. Cost of Leasing (C) • $528 x 12 x 2 = $12,672 lease payments • 30,850 – (12,000 x 2) = 6,850 excess miles • 6,850 x $0.20 = $1,370 excess mile charge • $12,672 + $1,370 = $14,042 total costs

  13. Cost of Leasing (D) Terry has a 4-year car lease with $332 monthly payments. Mileage limit was 12,000 miles per year. He bought 3,000 extra miles each year for 7 cents per mile. Lease processing fees and down payment totaled $418. What was the total cost of the lease over the 4-years?

  14. Cost of Leasing (D) • $332 x 12 x 4 = $15,936 lease payments • 4 x 3,000 = 12,000 miles purchased • 12,000 x $0.07 = $840 extra miles • $15,936 + $840 + 418 = $17,194 total costs

  15. Comparing Leasing and Buying (Example) • Will and his dealer negotiated a price of $27,400 for a new car. Will can lease this car for $496 a month for 36 months. Option to buy it at the end of the lease for the residual value of $16,200. If he buys the car now his monthly payment is $822 for 3 years after paying a $2,000 down payment. What is the total cost of purchasing the car either way? Which plan costs less?

  16. Comparing Leasing and Buying (Solution) • Lease: • 36 x $496 = $17,856 (Total lease payments) • $17,856 + $16,200 = $34,056 (Total cost to purchase leased car) • Buy: • 36 x $822 = $29,592 (Total monthly payments) • $29,592 + $2,000 = $31,592 ( Total cost to purchase car out right) • Buying is cheaper! • $34,056 – 31,592 = $2,494 (Difference)

  17. Comparing Leasing and Buying (E) Car costs $18,500. Can be leased for $436/ month with $500 down payment and residual value of $11,000. To purchase the car the monthly payment would be $728 with a $3,100 down payment. The terms are 24 months. Which is less expensive, leasing or buying and by how much?

  18. Comparing Leasing and Buying (E) • Lease: • 24x $436 = $10,464 (Total lease payments) • $10,464 + $500 +$11,000 = $21,964 (Total cost to purchase leased car) • Buy: • 24 x $728 = $17,472 (Total monthly payments) • $17,472 + $3,100 = $20,572 ( Total cost to purchase car out right) • Buying is cheaper! • $21,964 – 20,572= $1,392 (Difference)

  19. Comparing Leasing and Buying (F) Car costs $37,960. Can be leased for $623/ month with $995 down payment and residual value of $19,050. To purchase the car the monthly payment would be $873 with a $3,800 down payment. The terms are 4 years. Which is less expensive, leasing or buying and by how much?

  20. Comparing Leasing and Buying (F) • Lease: • 4 x 12 x $623 = $29,904 (Total lease payments) • $29,904+ $995+$19,050 = $49,949 (Total cost to purchase leased car) • Buy: • 4 x 12 x $873 = $41,904 (Total monthly payments) • $41,904 + $3,800 = $45,704 ( Total cost to purchase car out right) • Buying is cheaper! • $49,949– 45,704= $4,245 (Difference)

  21. Costs of Operating Cars • Annual expenses for using the car… • Insurance • Gas • Oil • License and Inspection Fees • Tires • Repairs • Garage rent • General Upkeep

  22. Costs of Operating Cars (Example) Gerri paid $18,700 for her car. Insurance, gas, oil, and other expenses are $2,300. The car depreciates 16% per year. She could earn $145 interest on her investment. What was her operating costs on her car for the year?

  23. Costs of Operating Cars (Solution) • Annual Deprecitaion • 16% x $18,700 = $2,992 • Annual Cost of Car Operation • $2,992 + $2,300 + $145 = $5,437

  24. Costs of Operating Cars (G) Conrad purchased a used car $12,480. His expenses were: gas and oil $1,070; repairs $512; Insurance $981; license plates $83; Loss of interest on investment $561; Depreciation 12%. Find the total operating expense in year one. (Round to nearest $)

  25. Costs of Operating Cars (G) Find the total operating expense in year one. (Round to nearest $) 12% x $12,480 = $1,497.60 $1,497.60 + $1070 + $512 + $981 + $83 + $561 = $4,704.60 -- $4,705

  26. Costs of Operating Cars (H) Jess bought an old car for $600. The expenses she paid this year include: gas $610; Maintenance and repairs $780; Property damage and liability insurance $630; License plates $63; Depreciation 10%; Lost interest $15. What is the annual cost of this car?

  27. Costs of Operating Cars (H) What is the annual cost of this car? 10% x $600 = $60 $610 + $780 + $630 + $63 + $60 + $15 = $2,158

More Related