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Budgeting for a car

Learning Goal: Students will demonstrate personal money management skills when budgeting a car.

Guesstimate how much money you need to budget for a car...

Buying a Car

Buying a Car

  • Try to secure the car loan BEFORE you shop. Go to your bank or credit union to to get pre-approved for the loan
    • Will you need a co-signer?
  • Avoid cars that are out of your price range
  • Consider safety, gas mileage, and mainenance costs before you buy

Before You go to the car lot...

Will I need a co-signer?

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  • If you don't have credit history built up, or you have a low credit score, you may need a co-signer.
  • A cosigner on an auto loan agrees to take full legal responsibility for repaying the loan if you can't pay it back.
  • Don't assume your parent or family member will do this for you. Talk it over with them so you don't waste time and avoid any surprises.

Buying a Car

Is the MSRP/sticker price what I will pay for the car?What you really need to know is how much does the car cost after all of the other fees are factored in?

Dealer Fee- A common fee dealers charge (this varies by dealership)

Title- The cost to transfer the title of the car is about $35.

Tag-A new tag will cost $225. This is another word for License Plate.

Tax- Add a minimum of 6% sales tax to the cost of the car - Orlando is 6.5%

Don't be surprised...

Buying a Car

Video from Consumer Reports will give you tips!

video

Buying a Car

$15,000 car loan =$301/mo with 7.5% interest for 60 months

$15,000 car loan =$352/mowith 6% interest for 48 months

Make sure you can afford ALL the bills...

Buying a Car

  • You are "liable" for your actions. It means you are legally responsible for any damage you cause.
  • Car Insurance is cheaper if you can attach to a parent's policy..
  • Rates go down about 21, and again at 25 if you have a good driving history.
  • Men pay more than women.
  • Safety features will save you money on your insurance.

Insurance...

Buy A Car

If you get your own policy, the average for a teen driver is $450-$500/month!

Average Cost of adding a teen driver to a parent's policy:16 year old Male: $348 Female: $31217 year old Male: $310 Female: $27318 year old Male: $272 Female: $23819 year old Male: $252 Female: $223*Assuming they have been driving during that time with a safe, clean driving record.

Insurance...

Buy A Car

Car Payment: $193 ($10,000 loan)Car Insurance: $278Maintenance: $50 Gas: $160 ($40 wk)Registration: $6Monthly Budget: $687

Check your budget...

Buying a Car

Compare your guesstimate vs the actual costs.Based on the actual costs, can you afford a car with the paycheck you earn now?

Post -Test

Buy A Car

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Buying a Car