the

VEHICLE PROJECT

DUE DATE: ___________________________

All new vehicles should be realistic and under $50,000. Ensure you can find a vehicle of the same make and model that is 3 years old as well. Make sure you show all calculations and include all the material used to back-up your numbers. Project will be marked on presentation (neatness, format, organization) and content.

EM40S | Vehicle Finance Vehicle Project

TASK 1 | A NEW VEHICLE

Title Page: Title, Full Name, EM40S, Teacher’s Name

1. Choose a vehicle - Choose a new vehicle that you would like to purchase. Print out advertisement - Write a paragraph (at least 2 sentences) describing your vehicle. Include the

following: o Make, model, year, colour o Features that come with the car o The options that you would like.

2. Fuel Calculations - If the price of gas is 121.9 cents per litre, and you drive a total of 350km in the city

and 200km on the highway during one week of driving, calculate the following using the expected fuel economy below for the new vehicle:

Vehicle Car Truck Hybrid Fuel Economy

9 L/100km (city) 6 L/100km (hwy)

14 L/100km (city) 9.7 L/100km (hwy)

3.7 L/100km (city) 4.0 L/100km (hwy)

o Number of litres of fuel used (Add the city and highway amounts) o Total Cost of the fuel

3. Insurance - Calculate the insurance premium using the MPI website. - Use your own postal code. You can pay in full, quarterly or monthly. - Include the print out from the internet. ** Circle your insurance premium **

4. Buying the vehicle - What is the total purchase price of the vehicle including taxes?

o You are trading in your old vehicle and the dealership gives you a $1500 trade in value. Add a freight charge of $650 (unless the dealership tells you a different amount). Add a $150 documentation fee (unless the dealership tells you a different amount).

o Don’t forget to add the taxes.

5. Depreciation - Calculate the depreciation after 3 years. Use the following depreciation amounts:

First year Subsequent years

Cars 30% 15%

Vans, Trucks, SUVs 20% 15%

o What is the depreciation each year? (for 3 years) o What is the total depreciation?

- What is the resale value after the 3 years?

EM40S | Vehicle Finance Vehicle Project

TASK 2 | A USED CAR

6. Choose a used vehicle - Choose the same vehicle used (3 years older) with comparable options. (Make sure

you’re looking in Manitoba.) Print out an advertisement. - Write a paragraph (at least 4 sentences) describing your vehicle:

o Make, model, year, colour o Features that come with the car (include a picture)

7. Insurance - Calculate the insurance premium using the MPI website. - Use your own postal code. You can pay in full, quarterly or monthly. - Include the print out from the internet. ** Circle your insurance premium **

8. Buying privately (assume all purchases are private) - If you bought this car from a private owner, how much would you have to pay in total

including taxes? (Use the price listed in the used car advertisement you found) - You have to pay: lien search ($26 no tax), Safety check ($40 + GST), Minor repairs

totaling $325 plus G.S.T. and P.S.T. o Assume the book value is 10% higher than the asking price. (Multiply the asking

price by 1.10 to find the book value)

9. Compare Depreciation

- Compare the depreciated value you found in #5 with the price you found in your used vehicle advertisement. **Discuss if the price of your used vehicle is a “fair” price based on the depreciation

value. **What factors might contribute to a price that is different than the estimated

depreciation price?

10. Summary Section

Answer the following questions:

a. What are 2 benefits of buying new? What are 2 benefits of buying used? What are 2 benefits of leasing?

b. What are 2 disadvantages of buying new? What are 2 disadvantages of buying used? What are 2 disadvantages of leasing?

c. Justify whether you would buy new, buy used or lease a vehicle, based on factors such as personal finance, how you intend to use the vehicle, maintenance, warranties, mileage, insurance or safety considerations. Justify your answer! Give 2-3 reasons.

Resources:

Subject Web page URL

New Vehicles (optional)

Google “Canada + [car company you want i.e. Honda, Dodge, Chevrolet]” and most sites have a “Build it & Price it” feature

Insurance http://www.mpi.mb.ca

Used Vehicles (look under Manitoba) http://winnipeg.kijiji.ca/

Fuel Economy http://oee.nrcan.gc.ca/transportaion/tools/compare/compare-search-one.cfm

EM40S | Vehicle Finance Vehicle Project