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Car Buying

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					                                                                       Buying Your Car
You are about to buy a car!

Imagine you have $2000, but wish to buy a car that will cost at
least $5000 more than this.

1.   Firstly, decide on what type of car you want.

     (a) Make a list of the important features that you will be
         looking for. Think about
          How much room do you need for passengers, pets,
             sporting gear etc?
          What safety equipment do you want?
          Do you want a sedan or wagon?

     (b) Collect data about 3 different cars that may suit your needs.
         Record the specifications of these cars in the table provided.
     (c) Choose the one that you think is best for you, and explain several reasons for your choice.

2.   Finding The Money To Buy A Car.
     Make an Estimate!
     As a class we will discuss the various costs for buying and owning a car. You are to record your
     estimates after this discussion, and hand in to your teacher.

     Collect or photocopy an advertisement for the car you would like.

     Write down:
      (a) The cash price of the car
      (b) The deposit required, in dollars.
      (c) The amount you think you will need to borrow.
          You should consider other costs associated with buying a car that are covered later in this project.

           Set out the calculation to show how you arrived at this figure.

       Collect information from two financial institutions on their unsecured personal loans.

       (d) Tabulate a summary for each:
            The name of the financial institution
            The name of the loan product
            Interest rate

            Choose one of the loan products, and explain you reasons for the choice.

       (e) Over what period will you take the loan?
           How often will you make your repayments?
           How much will be the repayments?

           To help decide this, you will need to consider
                Your income and other expenses
                The other costs of buying and owning a car.
                The options the loan offers.

           You can use a Personal Loan Calculator to help with this, which can be found on the websites of
           many banks. Eg at www.commbank.com.au/Personal/PersonalLending/PersonalLoans.asp
           Set out a calculation to show how you can afford this.

       Calculate:
       (e) The deposit as a percentage out of the full price
       (f) The total of the deposit and the repayments.
       (g) The extra paid, or Interest as a percentage out of the cash price.

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                                                                         Buying Your Car
4. What Will The Car Be Worth?
   Cars lose value, or depreciate over time.

       (a) What will the car’s value be after 1 year if it depreciates 20 % in that time? Set out the calculation
           you used.
       (b) Tabulate the value of the car at the end of each year for 7 years, assuming it will depreciate at 20%
           per annum.
       (c) Use this table to draw a graph showing the value of the car over time.
       (d) From your graph, estimate how long it takes for the car to lose half its value. Mark this on your
           graph.
       (e) How much will you have paid in repayments by this time?

3.   Transfer of Registration
     When you buy a car, it is necessary to transfer the car’s registration to your name.

     Go to the Vic Roads website www.vicroads.com.au

     From the Registration menu select Buying and Selling.
     Download the Vehicle Registration Transfer form

     Using details available from the advertisement fill in this form.

4.   Registrations and Compulsory Third Party Insurance
     All vehicles must be registered and have compulsory Third Party Insurance.

     Registration
     Go to the Vic Roads website www.vicroads.com.au

     From the Registration menu select Registration Fees
     Download the Vehicle Registration document

     (a) How much will registration of you car cost each year? Mark this on the table.

     Compulsory Third Party Insurance
     Go to the Traffic Accident Commission (TAC) website www.tac.vic.gov.au

     Cluck on About Us menu, and select TAC Premiums
     Download the TAC premiums that apply from 1 July 2006

     (b) Do you live in a High, Medium or Low risk zone? Mark this on your table.
     (c) What vehicle code is your car? Mark this on your table.
     (d) What will be the cost of your compulsory TAC Premium? Mark this on your table.

5.   The Costs of Running a Car

     Fuel
     (a) Estimate the number of kilometres you might travel in a week.
         Explain and set out how you calculated this.
     (b) We will assume that fuel consumption for small, medium
         and large cars is
                 Small: 6 litres/100 km
                 Medium: 9 litres/100 km
                 Large: 11 litres/100 km

         (i)     How much fuel will be used in a week?
         (ii)    How much fuel will be used in a year?
         (iii)   What is the current cost for fuel in Corio?
         (iv)    What will be the cost of fuel for a year?

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                                                                        Buying Your Car
     Other Costs
     (c) What other costs do you think there will be?
         List them, and set out a calculation giving the total of these for a year.

         You may wish to visit the RACV website www.racv.com.au
         Select My Car, then advice and Information, then Car Operating Costs

6.   Insurance
     There are two main types of insurance you could choose.

      Third Party Insurance                                   Comprehensive Insurance
      This type only covers the damage you cause to           This type covers repairs to all cars in the accident.
      someone else’s car.

      If you are at fault in an accident, you pay:            If you are at fault you pay:
       All costs to repair your car                           An Excess, which is the first part of the costs
       An Excess, which is the first part of the costs            for repairs
           for repairing the other car                         Perhaps also an increased premium the
       Perhaps also an increased premium the                      following year
           following year

     (a) What type of insurance do you want?
         Explain why?

     (b) Go to the RACV website www.racv.com.au to get an insurance estimate for the insurance type you
        choose.

         Select Insurance, select Car Insurance,
                                                                                  Comprehensive
         Select the Motor Vehicle Insurance you want, one of:                     Third party, fire and theft
                                                                                  Third party property damage
         Select Estimates
         Select Get an estimate…. for the insurance you want.

         Enter the details as requested, and obtain the insurance estimate for you and your car.

     We will all use the details:
         Insure for market Value                                  There will be no other drivers
         No modifications                                         You have had no accidents
         Secured bank loan                                        You have no previous insurance
         Private use                                              No other insurance previously
         You are the only owner

         Print out the estimate for your car insurance.

     (c) Obtain one other quote for this type of insurance.
         You could try
          AAMI
          NRMA Insurance
          Just Car Insurance

       Which will you choose? Explain why.
7.   Total Costs for the First Year

     (a) Calculate the total estimated cost for the first year of buying, owning and maintaining your car.
          List each cost in table form, with the total

     (b) Calculate the total estimated costs of other expenses that you could incur for the year.
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                                                                     Buying Your Car
         List each cost in table form, with the total.

         Assume you still live at home paying:
             Board of $50 per week
             Entertainment costs
             Clothing costs
             All car costs
             Lunches & snacks

     (b) What is your income?
         List each source of income and the amount for a year, and give the total.

     Can you afford this car?
      Justify your conclusion.
      Do you have enough income, and by how much?

8.   How Did Your Estimates Go?
     At the start of this project you made some estimates for each of the major costs involved in buying and
     owning a car.

     Discuss these estimates now with you teacher, comparing them with what you have finally calculated.

9.   New Car Sales
     Car sales vary during the year.

     Visit the Australian Bureau of Statistics web site:
     http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/9314.0?OpenDocument

     Find the total monthly new motor vehicle sales figures for Victoria during 2006.

     (a) Copy these figures into a table, and then draw a line graph.
     (b) Describe when there are highs and lows in sales during the year.
     (c) Make some suggestions for each of these variations.

     Visit the Federal Chamber of Automotive Industries (FCAI) website at:
     www.fcai.com.au/sales.php/2007/01/sales.html

     Find the January monthly sales of the top 8 selling makes of vehicles for both 2006 and 2007.

     (d) Copy these figures into a table
     (e) Calculate the mean, median and mode from these top eight vehicle manufacturers for January 2006
         and 2007. Discuss any differences you see between 2007 and 2006, and between the manufacturers.
     (e) Calculate the percentage difference for each vehicle make from January 2006 and January 2007.
         Set out a sample calculation.
         Add this information to the table above.

     (f) Draw a duel bar graph to display this data the monthly sales figures for each vehicle make.
     (g) Comment on
         (i) The sales performance of each of the makes, and
         (ii) Any overall differences between the two years so far.


Car Specifications

      Specifications                    Car 1                     Car 2                       Car 3
List Price
On-Road Costs

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                                                       Buying Your Car
Warranty
Service Intervals


Engine Capacity
Engine Type
Max Power
Transmission Type


Measurements




Turning Circle


Fuel Tank Size
Fuel Type
Fuel Consumption


Service Costs




Safety Features




Some Useful Websites
Commonwealth Bank
www.commbank.com.au/NetBank/

Westpac Bank
www.westpac.com.au/internet/publish.nsf/Content/PB+HomePage

ANZ Bank
www.anz.com.au/



Vic Roads
www.vicroads.vic.gov.au/Home

Traffic Accident Commission (TAC)

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                                                        Buying Your Car
www.tac.vic.gov.au/jsp/corporate/homepage/home.jsp



Royal Automobile Club of Victoria
www.racv.com.au/wps/wcm/connect/Internet/Primary/home

NRMA: Motoring & Insurance


AAMI: Insurance
www.aami.com.au/

Just Car Insurance
www.justcarinsurance.com.au/



Car Sales
www.carsales.com.au/

Information about Cars
www.redbookasiapacific.com/au/

Trading Post
www.tradingpost.com.au/default.aspx

Cars Guide
www.tradingpost.com.au/default.aspx



Australian Bureau of Statistics
www.abs.gov.au/AUSSTATS/abs@.nsf/mf/9314.0?OpenDocument

Federal Chamber of Automotive Industries
www.fcai.com.au/sales.php/2007/01/sales.html




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