2. Choosing A Vehicle
Buying a vehicle is a major
purchase. The initial cost,
the registration and
insurance, the fuel, the
maintenance costs, are
just a few things to
consider when deciding
how much you can afford
to spend.
3. What is important in a vehicle?
In small groups,
comprise a list of what
your groups deems
important in a vehicle.
For example; safety
features, options, resale
value, fuel economy,
etc.
4. Buying A New Vehicle
When purchasing a
new vehicle it is
important to know and
understand all of the
charges. The charges
include; base price,
options, freight
charges, and a
number of taxes.
5. Shop Around
The sticker price is the full price of the vehicle
with the available options included. This price
should be the same at all dealers. However,
SHOP AROUND! The actual selling price will
most likely vary from dealer to dealer.
base price, documentation fee, freight charge,
optional equipment, preferred equipment
package, sticker price, trade-in allowance, air
tax, tire tax
6. Unit 3 – Owning & Operating A Vehicle
3-1 Describe the methods of acquiring a 30S
Consumer Mathematics vehicle.
Unit 3 – Owning & Operating A
Vehicle
8. Example Problem #1
Find the sticker price for the following 2 door
mustang. The base price is $25 880 and it has
the following optional equipment:
A preferred equipment package costing $1 260
A four speed automatic transmission costing $995
An AM/FM stereo with CD player costing $200
Air Tax of $100
Freight of $620 Sticker Price
$29 055
9. Example Problem #2
Dez, from Brandon, is going to buy a Camaro Z28
sport coupe with a base price of $20 798. He
adds a package costing $1 585 plus an automatic
transmission for $695. Freight costs $655. He is
getting $5000 trade-in allowance on his old car.
There is a documentation fee of $150. What is
the total price he will pay?
Total Price
$21 148.96
11. Buying A Used Vehicle
Since a new vehicle
depreciates so much
in the first year, many
people look to buy a
used vehicle. It is
important to shop
around when doing so.
12. Shop Around
If a used vehicle is bought from a dealer you
must pay GST and PST on the price of the
vehicle. If it is bought privately (in Manitoba),
you only have to pay PST. Before you
purchase a used vehicle make certain there
are no liens against the vehicle. A lien search
can be done for about $26. When you
purchase a used vehicle make sure you have
a written contract.
13. Group Discussion – Buying A Used Car
If you were buying a used
car, what things would
you check or look for?
15. Example Problem #1
Les goes to a reputable dealer in Killarney, MB to
buy his car. The sticker price for this used car is
$5500. How much will it cost him?
Total Cost
$6270
16. Example Problem #2
Gordon lives in Victoria, BC. He wants to buy a
used car privately for #1995. Gordie does a lien
search for $26 and asks a mechanic to do a
diagnostic test for $30. The mechanic tells him
that the car needs some engine work that will cost
$650, including labor. The book value of the car
is $2500. He also needs to get a safety done on
the vehicle before he can register it. How much
will this car cost Gordie? Total Price
$3029.90
18. Calculating Car Payments
The most economical
way to purchase a
vehicle is paying upfront
without a loan since you
can avoid interest. This
is often not possible
since most people do
not have access to that
kind of cash.
19. Calculating Car Payments
Most people need a
loan to pay for a
vehicle. An important
consideration when
obtaining a loan to buy
a vehicle is the size of
the monthly payment,
and your ability to make
this payment.
20. Calculating Car Payments
Example 1: Using a Spreadsheet
Use the Vehicle Payment Calculator
spreadsheet to determine the monthly
loan payment for a used car valued at
$8250.00, plus taxes, with an interest
rate of 8.9% compounded monthly.
The loan is repaid in two years (24
monthly payments). Also determine
the total cost of the loan, and the
amount of interest paid.
21. Calculating Car Payments
Example 2: Using an Online
Calculator
Now let's look at the same vehicle
costs and use an online auto loan
calculator to determine the monthly
payment for an $8250.00 used car
loan with an interest rate of 8.9%
compounded monthly. The loan is
repaid in two years (24 monthly
payments). Also determine the total
cost of the loan, and the amount of
interest paid.
http://www.onlineloancalculator.org/
22. Practice
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New or Used Vehicles
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Worksheet #1
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24. Leasing A Vehicle
When you lease a vehicle,
you are essentially renting
the vehicle from the leaser.
You, the lessee, must
make monthly payments to
pay for the depreciation of
the vehicle, the sales taxes
on the amount of
depreciation and the
interest on the unpaid value
of the car.
25. Leasing A Vehicle
At the end of the lease, you
will either return the vehicle
to the leaser or buy it for the
residual value. The residual
value is an estimate of the
vehicle's worth at the end of
the lease as determined by
the leaser at the beginning of
the lease.
26. The Lease Agreement
When you lease a vehicle, you
pay a monthly leasing fee for a
specified number of months. At
the end of the specified time
period, you can either purchase
the vehicle or return it to the
dealer. If you decide to purchase
the vehicle you will purchase it for
the residual value. This value is
given to you when you lease the
vehicle.
27. The Lease Agreement
When you lease a vehicle, you will be
required to sign a lease agreement.
This agreement specifies:
•the initial value of the item
•the buy out price at the end of the
lease (which is the same as the
residual value)
•the down payment (if there is one)
•any additional fees
•the interest rate
•the monthly payment and date due.
28. The Lease Agreement
The lease agreement will also
specify other terms or
restrictions, such as what is
reasonable use and care of the
vehicle. A vehicle lease will
usually specify how many
kilometres you may drive, and
the cost per kilometre if you
exceed this limit.
30. Leasing
There is some key terminology one should
know with regards to leasing.
• Lease term
• Lease Payment
• Residual Value
• Residual Value Rate
• Security Deposit
• Down Payment
31. Example Problem #1
John leases a vehicle that is worth $34 000 plus taxes in
Nanaimo BC. The monthly lease payment is $349 plus
taxes for a term of 36 months. A down payment of $3850
is required. As well, a $500 refundable security deposit is
required when the lease is signed. The residual value rate
is 75% after three years.
a) Calculate the total monthly lease payment including
taxes
b) Calculate the total lease payment.
c) Calculate the amount which must be paid at the
start of the lease. a) $399.61
d) Calculate the residual value of d the vehicle $18 235.96
b) after 3
years. c) $4 749.61
d) $29 197.50
33. Practice
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34. Practice
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Worksheet #2
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36. Vehicle Maintenance & Insurance Costs
Once you have purchased or
leased a vehicle, there are
several costs involved in
operating and maintaining it.
Some of the costs of operating
a vehicle are fuel consumption,
maintenance, repairs,
depreciation, and insurance.
37. Fuel Economy
After you have purchased or
leased a vehicle, there are costs
involved in operating it. One of
these costs is fuel. Different
vehicles require different
amounts of gasoline to drive the
same distance. The number of
litres of gasoline required to
travel 100 kilometres is known
as the vehicle's fuel economy
or consumption.
38. Fuel Economy
The fuel economy of your
vehicle will vary, depending on
when and how you drive. The
types of optional equipment that
you have installed and the size
and condition of the vehicle will
also affect the fuel economy.
Manufacturers are required to
place a fuel economy label on
new vehicles. Generally, they
will indicate the city and
highway fuel economy for that
particular model.
39. Fuel Economy
The formula for determining the
fuel economy of a vehicle is:
You may hear "miles per gallon"
as a reference to fuel ecomony
but for this course we will be
expressing fuel economy in
L/100 km.
40. Fuel Economy
Example 1:
At 60 km per hour, a sedan uses 18.4L of
gasoline to drive 225 km. At 100 km per hour, the
same sedan uses 22.1L of gasoline to drive the
same distance.
• Find the fuel economy of the
sedan at 60 km per hour.
• Find the fuel economy of the
sedan at 100 km per hour.
• What does this example
suggest about the relationship
between the fuel economy of a
vehicle and the speed driven?
41. Fuel Economy
Example 2:
The Ford family is planning a driving vacation of a distance
of 5000 km. The family has two vehicles, a sedan and an
SUV. The fuel consumption for the sedan is 8.8L/100km
and for the SUV is 12.7L/100km. The family estimates that
the cost of gasoline during their vacation will be $1.11 per
litre.
•Calculate the cost of gasoline required by the sedan.
•Calculate the cost of gasoline required by the SUV.
•Which vehicle is less expensive to drive on the vacation
and by how much?
•What other factors might the Ford family consider when
deciding which vehicle to take on their vacation?
42. Fuel Economy – Research Activity
Using the internet, research
5 different vehicles,
recording their fuel
economy in litres per 100
km. Calculate the # of litres
required to travel 24 000 km
in one year. Calculate the
cost of fuel, using today's
price of 118.9 cents per
litre.
43. Practice
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Essential of Mathematics 11
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Q 1-10
Page 146-147
44. Vehicle Maintenance and Repairs
The key to a long lasting vehicle is regular maintenance. It
is a good idea to create a vehicle maintenance schedule
and stick to it. Here are vehicle maintenance tips that may
help:
•Monthly checks for tire inflation and condition, operation of
lights, and fluid levels.
•Check the transmission fluid, battery and cables, belts,
engine air filter, oil and filter, exhaust, fuel filter, power
steering fluid and hoses every 3-6 months.
•Ensure that you follow the suggested kilometre schedule
for oil changes.
•Do 6 month checks on chassis lubrication, polish and
wiper blades.
•Do 12 month checks on brakes, cabin air filter, coolant,
spark plugs and steering and suspension.
45. Vehicle Maintenance and Repairs
The key to a long lasting vehicle is regular maintenance. It
is a good idea to create a vehicle maintenance schedule
and stick to it. Here are vehicle maintenance tips that may
help:
•Monthly checks for tire inflation and condition, operation of
lights, and fluid levels.
•Check the transmission fluid, battery and cables, belts,
engine air filter, oil and filter, exhaust, fuel filter, power
steering fluid and hoses every 3-6 months.
•Ensure that you follow the suggested kilometre schedule
for oil changes.
•Do 6 month checks on chassis lubrication, polish and
wiper blades.
•Do 12 month checks on brakes, cabin air filter, coolant,
spark plugs and steering and suspension.
46. Vehicle Maintenance and Repairs
Example 1:
Sam takes his car in for regular service and the technician
discovers the radiator hose needs to be replaced. The
servicing of the vehicle requires three litres of oil at $5.66
per litre, an oil filter for $11.99, and half litre of washer fluid
worth $2.25 a litre. The radiator hoses costs $12.95 and
the antifreeze then needs to be topped up at a cost of
$1.99 per litre. The vehicle will require 4 litres of antifreeze.
the total time required to service vehicle is 1 hour 15
minutes. The rate the service station charges for labour is
$80 per hour. PST and GST are charged on parts and
labour. Find the total cost of servicing and repairing the
vehicle.
47. Practice
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Essential of Mathematics 11
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Q 1-5
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48. Vehicle Depreciation
All vehicles lose value as they
age. This is called depreciation.
There are various methods for
calculating depreciation and all
vehicles will depreciate at different
rates. Often the rate of
depreciation will be more in the
first year than in later years, but
for the purposes of this course we
will assume that the depreciation
rate remains the same.
49. Vehicle Depreciation
Example 1:
The sale price of a vehicle is $38,500. The rate of
depreciation is 20% each year. The term of the lease
is 36 months; the residual value of the vehicle will be
55% of the sale price.
•Calculate the value of the vehicle and the amount of
depreciation at the end of the first year.
•Calculate the value of the vehicle and the amount of
depreciation at the end of the second year.
•Calculate the value of the vehicle and the amount of
depreciation at the end of the third year.
•Calculate the residual value of the vehicle at the end
of the lease.
•How does the value of the depreciated vehicle
compare to the residual value stated in the lease,
after three years?
50. Practice
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Q 1-3
Page 168-169
51. Insuring and Registering Your Vehicle
When you purchase a
vehicle you are required
by law to register it, buy
licence plates for it and to
buy insurance for it. The
cost for insurance varies
with the type of vehicle,
your driving record, and
the location where your
drive most often.
53. Insurance
When you insure a vehicle you first pay a
premium. The amount of the premium
depends on:
• How you use your vehicle (Rate
Class)
• Pleasure, all purpose, farm
vehicle
• Where you live (Territory)
• Your claim record
• A clean driving record results in
discounts
54. Unit 3 – Owning & Operating A Vehicle
D-2 Solve problems involving the purchase and operation of a vehicle.
55. Insuring and Registering Your Vehicle
Example:
Use the MPI "Insurance Rate Calculator"
to obtain an estimate for the following
vehicle.
•2009, Chevrolet Cobalt LS, 2-door
•Manitoba resident with postal code R4H 1H7, insuring in
the Municipality of Winnipeg.
•All-purpose insurance with a 10% discount, 500 deductible,
$1,000,000 third party liability.
•The car will not be insured for Auto Loss of Use or New car
protection and the vehicle is not valued at over $50 000 so
no selection is required for these.
•The payment type chosen is full payment.
56. Practice
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Worksheet #3
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