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Wheeling and Dealing: What To Know Before You Buy Your First Car

Additional Activities
Additional Resources
Answers to Activities in the Newspaper Insert
Download a lesson plan that includes the standards of learning for Virginia and New Jersey - PDF

Jane and Tommy are twins who have just celebrated their 16th birthday. They both want to buy a new car. Their parents tell them that before they start looking at cars, they need to make a list of what is important in a car (such as a radio, air condition, or good gas mileage). Jane and Tommy use a "needs versus wants" chart to help them decide what is most important to them. They list all of the features they think they need or want and then list the additional cost for each item.

Jane wants a red sports car with a sun roof, CD player, leather interior, air conditioning and automatic features. Tommy wants a blue truck with four-wheel drive, four doors, 5-speed with automatic locks and windows, tinted windows and air conditioning. They both present their lists to their parents who give them each a copy of the Consumer Reports automobile special. They each must come up with three automobiles that match the features they are looking for.

• What safety features should Tommy and Jane consider?
• Find 3 cars that match each of Tommy or Janežs features. Based on the safety ratings, which would you pick?

A week later Jane and Tommy come to their parents with a list of three different automobiles that match each feature they decided was important. Their parents then take them to a local car dealership to look at each of the three automobiles they have listed. Once Jane and Tommy have had a chance to test drive each of the cars on their list, their parents ask them which car, if any, they would like to look at. Jane and Tommy decide they really like one of the cars they have test driven. They check prices with the dealer and their parents ask them to check with three other dealers and compare prices.

• What are some advantages of visiting more than one dealership?
• Should Tommy and Jane decide right away which car they want?
• Compare the prices in the newspaper for the car you choose with the price on the Kelly Blue Book Web site http://www.kbb.com/kb/ki.dll/kw.kc.tp?kbb&&32&split. Is the price offered in the newspaper fair?

Two weeks later Jane and Tommy have both found the best deal for their car. They are ready to make the deals and bring their cars home. Jane and Tommy must then decide how to finance their cars. They both decide to go with the most common type of car financing, which is available through the dealership.

• What type of financing is the dealership offering in the advertisement?
• What other advertisements for financing can be found in the newspaper?
• Which type of financing should they choose?

Additional Activities

1. Using the American Banking Association Web site, http://www.bankrate.com calculate the cost of a car loan using different car purchase prices. Compare how much monthly payments might be depending on the price you pay.
1. Look in newspaper advertisements for purchase prices of the same make and model of car.
2. What is the difference in price between different dealerships?
3. Check for additional rebates offered (money back or applied towards the loan) and compare how this might affect the purchase price.
2. Visit an insurance site, such as Allstate, http://www.allstate.com and use their online calculator to determine the cost of insurance on different models and makes of cars. Compare the difference in insurance based on purchase price.

Additional Resources

• AAA: http://www.csaa.com has a purchasing guide for new and used cars and tips and suggestions on obtaining insurance.
• Allstate, http://www.allstate.com provides information on car and renter's insurance, along with some interesting software that is free to download. Calculators and planners are also available.
• American Banking Association, http://www.aba.com/aba/cgi-bin/autoNT.pl has calculators available online to assist you in figuring costs of loans. This particular calculator is used for car loans.
• Federal Trade Commission, http://www.ftc.gov/bcp/conline/edcams/automobiles/index.html, has information on how to purchase a new or car, understanding car advertisements, financing, and repairs.
• Kelly Blue Book, http://www.kbb.com/kb/ki.dll/kw.kc.tp?kbb&&32&split offers an easy way to price used cars, both by the trade-in value and the retail value.
• Kelly Blue Book, http://www.kbb.com/kb/ki.dll/kw.kc.tp?kbb&85705&1&nc1 is a user-friendly site that allows users to price new cars by choosing make, model, year, etc.
• Leasing Guide, http://www.leaseguide.com/lease07.htm covers all the basics related to leasing a car, how it works, and how to calculate monthly payments.
• National Automobile Dealers Association: http://www.nada.org has information on purchasing vehicles and the popular N.A.D.A. guide on used car values.
• The American Financial Services Education Foundation: http://www.afsaef.org has information on leasing vehicles and understanding vehicle financing. It also has multiple links to other resources.
• National Highway Traffic Safety Administration, http://www.nhtsa.dot.gov has lots of helpful information on cars and safety, insurance, crash tests, and crash statistics.
• Young Adult Consumer Education Trust, Winnatchee, Washington, http://www.consumerjungle.org is an interactive, online consumer education program that provides information to both students and educators. Additional suggestions for activities are provided to encourage communication between families and young adults. An entire section is devoted to purchasing a car.

Buying a Car Videos

• Car Insurance
• Choice, Chance, Control: That's Life, Insurance Education Foundation, Inc. (1988). The kit includes a video, sample activity sheets, and teacher's guide on topics dealing with basic insurance terms, risk control, and the purpose of insurance.

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Answers to Activities in the Newspaper Insert

1. Sun Roof
2. Seat belts
3. Emergency flashers
4. Engine
5. Lights
6. Airbags
7. Tires
8. Brakes
9. Battery
10. Radio
11. Transmission
12. Tinted windows
13. Racing Stripe

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