Buying a Car

 

This project can be completed in groups of two or three. As a group, you are to find a car that you would like to buy. Each of you will buy the same car, but in different ways.

 

The first person will buy the car through financing. You will put down $1500 as a down payment and finance the rest. Research which would be cheaper: to finance the car with the dealership or take out a car loan from a bank. Calculate the monthly payment on the car loan or financing amortized over a period of 36 months.

 

The second person wants to buy the car outright. So you are going to invest money into a sinking fund so that you can make the amount of the car in the period of 36 months. Find out what type of account will create the greatest return on your investment and calculate how much you will have to invest each month to make the price of the car. Your account will start at $1500 and your first monthly deposit will be made one month after you open it.

 

If you want to do this project in a group of three, the third person can investigate the price of the car using leasing. They will have a down payment of $1500 as well and will have to determine how they will pay for the "buy-out option" at the end of the lease term of 36 months.

 

Compare your findings and decide which way is the better way to go to buy the car. Detail your conclusions by showing if the way you found to be better would be better in all instances or just in your case (Is financing better with one car dealership than another? Is a different bank account better or worse?). Show research into your conclusions.

 

 

Project Ideas