6-5: Buying a car
This is the price printed on a sticker pasted on the window of a new car.
Manufacturer's Suggested Retail Price (MSRP)
Contract made between the company that owns the car (the lessor) and the person who will be given the right to use the car (the lessee).
Lease
Market value, or the amount you get when you sell the car to someone else
Resale value
Covers your liability for injury to others
Bodily injury
Important part of a car purchase where buyer and seller come to an agreed price for the vehicle.
Negotiation
The expected value of the car at the end of the lease period. This may also be though of as the depreciated value of the car.
Residual Value
The amount you get for your old car when you trade it in to buy a new car.
trade-in value
Covers damage to other people's property, including their vehicles
Property damage
Find the MSRP of a MR35 sports sedan, Model CTM with these options: power seats and windows, ski rack, and 36/45,000 warranty. (refer to p. 239)
$25,851
Jackie made a $2000 down payment on a 60-month SUV lease contract. Her monthly payments were $485.30. At the end of the lease she was charged $0.19 per mile for 1,800 excess miles. What was the total cost of leasing?
$31,460
A new car bought for $28,240 is estimated to have a value of $6,100 after 6 years. What is the car's estimated average annual depreciation?
$3,690
Kate drives her car to work. She wants to insure the car with $100 deductibles for collision and comprehensive coverage. She also wants to carry $100/300,000 bodily injury and $100,000 property damage coverage. Find the premium she must pay (refer to pg. 256).
$892.63
Jamie agreed to a purchase price of $32,568 for a new SUV. She made a down payment of $7,500. she is charged 4% sales tax on the purchase price and paid $183 in registration costs. She also received a $1,500 manufacturer's rebate. Find the delivered price and the balance due on this purchase. (two answers)
$32,553.72 ; $25,053.72
Mark bought a used van for $8,127. He paid for the van with a $1,500 down payment and 24 monthly payments of $327.86. What total amount did he pay for the van and what was the finance charge on the loan? (two answers)
$9,368.64 ; $1,241.64
A used car bought for $16,230 was sold for $1,200 after 9 years of use. What was the car's rate of depreciation, to the nearest tenth percent?
10.3%
Hyde drives his car for business. The company's insurance carries $50/100,000 bodily injury and $100,000 property damage. The deductibles are $500 for collision and $100 for comprehensive. Find the premium the company pays to insure Hyde's car (refer to pg. 256).
$832.75