Aut o m o t i v e Ex p e n s e s

Transcription

1 15 Chapter 3 Aut o m o t i v e Ex p e n s e s Think Safety Budgeting for routine maintenance is important to your safety. Potentially hazardous situations can be avoided by doing maintenance on your vehicle as recommended or required. Objectives After reading the Auto Upkeep text and completing the following activities, you will be able to: Identify automotive expenses. Identify ways to save money. Describe insurance coverage levels. Calculate specific automotive expenses. Summary Automobiles are expensive to own. The financial obligations to own and operate a vehicle range from monthly car payments to insurance premiums to unexpected repairs. Knowing your budget and planning for routine maintenance and unexpected expenses will prepare you for the financial responsibility of vehicle ownership. Web Exploring Key Terms/Internet Search Words Use a search engine to investigate any of the following terms or phrases. Summarize your findings in a research paper. Allstate Insurance Company American Automobile Association (AAA) American Family Insurance Automobile Collision Insurance Automobile Comprehensive Insurance Automobile Liability Insurance Buying a Car Cheap Gasoline Prices Country Companies Insurance Department of Motor Vehicles Farmers Insurance Group Gasoline Prices Geico Direct Hybrid Electric Vehicles Insurance Companies Progressive Insurance State Farm Insurance Towing Insurance

2 16 Auto Upkeep Workbook Name Class Date / / Score Study Questions - Automotive Expenses 1. What are common automotive expenses? 2. What are three things that your monthly car payment is dependent on? 3. What is the minimum insurance policy that your state/province requires? 4. What do the numbers 50/100/20 represent in an insurance policy? 5. What does collision insurance cover? 6. What does comprehensive insurance cover? 7. How much would you spend on gasoline each year if you drove 10,000 miles over the year and your vehicle achieves 15 miles per gallon with gasoline priced at $2.75 a gallon? 8. Using the same scenario as question seven, substitute your vehicle with a hybrid-electric automobile that achieves 60 miles per gallon. Calculate the yearly cost for fuel with this vehicle. 9. How often do license plates need to be renewed in the state/province that you reside? 10. Why is it important to keep up with routine maintenance?

3 Chapter 3 Automotive Expenses 17 Name Class Date / / Score Automotive Expenses Activity Objective Upon completion of this activity, you will be able to calculate automotive expenses. Connections to NATEF General Service Technician Tasks None Tools Computer with Internet access, telephone, calculator (or use the calculator on the computer or a spreadsheet program such as Microsoft Excel) Supplies None Cautions None Directions Check off the boxes when completed. When you see a hand next to the task, write the information in the activity journal. If you have any questions during the duration of this activity, stop and ask the instructor (if available) for assistance. Scenario 1 You have been saving for years for your first car and have accumulated $2,500. Recently you passed your driver s test and received your license. Your parents have agreed to match the amount of money that you have saved for your car, so your budget is now $5,000. However this sum of money needs to last you six months until you get a summer job. You must calculate a sixmonth budget that will cover the car s purchase, insurance, fuel, registration, license, routine maintenance, and $100 worth of unexpected repairs. Your parents have decided that they don t want you to take out any loans. Use the table in the activity journal or a computer spreadsheet program to organize the data that you collect. Procedure 1 - Saved for Purchase Log onto your computer and open up an Internet browser. Type in the following Internet address - Look for possible vehicles. Remember that you only have $5,000 to spend on the car and expenses. ""Note the manufacturer, make, model, year, and engine size. ""Note the cost of the vehicle. ""Call your local Department of Motor Vehicles (DMV) or check online for the cost of license plates, registration, and title transfer fees for the specific vehicle you are researching. ""Calculate the sales tax (if applicable) on the vehicle. This tax is often collected by your local DMV if you bought a vehicle from a private party. $4,000 x.05 = $200 Vehicle Cost 5% Sales Tax Screen Capture from Sales Tax

4 18 Auto Upkeep Workbook ""Complete research to identify the car s fuel efficiency in miles per gallon or L/100 km. ""Visit or call local gas stations to find out the average price of fuel. ""Calculate six-month expenditure on fuel costs if you travel 1,000 miles (1,609 km) a month or use an online calculator (e.g., to assist you. MPG 200 x $3.00 = $600 6,000 Miles Fuel Efficiency of 30 MPG L/100 km Price of Fuel per Gallon 6 Month Fuel Costs 757 x $1.00 = $757 (9654 km 100) x Fuel Efficiency of 7.84 L/100 km Price of Fuel per Liter 6 Month Fuel Costs do not intend to complete the service. Call repair facilities for estimates. ""Budget for one major tune-up in the sixmonth period. You will need to calculate the cost for spark plugs, spark plug wires (if applicable), distributor cap (if applicable), distributor rotor (if applicable), air filter, and fuel filter. (Note: A distributorless ignition system does not have a cap or rotor. Coil-onplug (COP) ignition systems will not have spark plug wires.) Include labor costs if you do not intend to complete the service. Call repair facilities for estimates. COP Screen Capture from ""Call a local insurance agent or check online for the cost of a six-month liability policy. Your parents want you to have 100/300/50 coverage. Gather at least three quotes from different insurance companies. Choose a policy from a company that best meets your needs. ""Budget for two oil and filter changes in the six-month period. Include labor costs if you ""Calculate your total car expenditures. To do this, add the following. Vehicle Cost License Plates, Registration, and Title Transfer Fees Sales Tax on Vehicle Fuel Costs for Six Insurance for Six Two Oil Changes Tune-Up Unexpected Repairs (Estimate $100) ""Compare your total car expenditures with the amount of money ($5,000) that is available. Log off your computer.

5 Chapter 3 Automotive Expenses 19 Name Class Date / / Score Scenario 2 You have not saved much money for your first vehicle, but you have recently started working a part time job clearing $7.00 an hour. Your parents have offered to give you $1,000 towards your first vehicle and will co-sign a loan with you for another $4,000. Now you have $5,000 to spend towards a car. Your job should cover the loan payment and the costs for the monthly expenses. You purchased a vehicle for $5,000 including the sales tax. You are curious to calculate how many hours a month you need to work to keep your car operational. Your goal is to calculate the average monthly cost of owning this vehicle. Use the table in the activity journal or a computer spreadsheet program to organize the data that you collect. Procedure 2 - Loan for Purchase ""Use an online loan payment calculator (keyword: loan calculator) to determine the monthly payments on a $4,000 loan for 48 months at the current interest rate. Screen Capture from ""Call a local insurance agent or check online for the cost of a six-month liability policy. Your parents want you to have 100/300/50 coverage. Since you have a loan on the car, the lending institution will also require collision and comprehensive coverage. Gather at least three quotes from different insurance companies. Choose a policy from a company that best meets your needs. ""Calculate the cost of the insurance policy on a monthly basis. $600 6 = $100 Insurance for 6 Insurance Cost per Month ""Complete research to determine the fuel mileage per gallon (mpg) or L/100 km of the chosen vehicle. ""Visit or call gas stations to determine the cost of fuel per gallon. ""Calculate your monthly expenditure on fuel if you travel 1,000 miles (1609 km) a month. MPG x $3.00 = $ ,000 Miles Fuel Efficiency of 30 MPG L/100 km Price of Fuel per Gallon Approximate Fuel Cost per Month x $1.00 = $ (1609 km 100) x Fuel Efficiency of 7.84 L/100 km Price of Fuel per Liter Fuel Cost per Month ""Pro-rate (per month) the cost for licensing and registering. Call your local Department of Motor Vehicles (DMV), Motor Vehicle Administration (MVA), or check online for the cost of license plates tags and registration fees for the specific vehicle you are researching. $ = $10 Annual License & Registration License & Registration ""Traveling 1,000 miles (1609 km) a month will determine that your vehicle will need an oil change every 3 months. Pro-rate (per month) the cost of an oil change. $30 3 = $10 Oil Change Price Oil Change

6 20 Auto Upkeep Workbook ""Pro-rate (per month) the cost of a tune up. You will need to calculate the cost for spark plugs, spark plug wires (if applicable), distributor cap (if applicable), distributor rotor (if applicable), air filter, and fuel filter. (Note: A distributorless ignition system does not have a cap or rotor. Coil-on-plug (COP) ignition systems will not have spark plug wires.) Include labor costs if you do not intend to complete the service. Call repair facilities for estimates. Estimate that your vehicle will need a major tune-up every two years. $ = $10 Tune-Up Cost Tune-Up ""Pro-rate (per month) the cost for one set of tires. With your driving habits, you will need to buy a new set of tires every four years. Check online or with a local tire distributor for the cost to replace the tires for your vehicle. You want to buy 50,000 mile (80,470 km) tires with the following minimum UTQG ratings: Traction A, Temperature B, Treadwear 400. You also want new valve stems installed, the tires mounted and balanced, and the old tires properly disposed. $ = $10 Set of 4 Tires Cost Tire ""Pro-rate (per month) the cost for one battery. You live in a harsh climate and will probably need a new battery in the next four years. Check online or with a local battery distributor for the cost to replace the battery in your vehicle. $48 48 = $1 Battery Cost Battery ""Pro-rate (per month) the cost for new windshield wiper blades. You will probably need to replace your wiper blades every year. Check online or with a local parts distributor for the cost to replace the wipers on your vehicle. $12 12 = $1 Set of 2 Wiper Blades Wiper Blades ""Pro-rate (per month) the cost for two new headlamp bulbs in the next four years. Check online or with a local parts distributor for the cost for two new headlamp bulbs. $16 48 = $0.33 Set of 2 Headlamps Headlamp ""Pro-rate (per month) the cost for one complete brake job in the next four years. Check online or with a local service facility for the cost to replace the brake pads/shoes and resurface the rotors/drums. $ = $5 Cost for Brake Job Brake Expense

7 Chapter 3 Automotive Expenses 21 Rotor Brake Pads ""Calculate your total monthly expenses by adding the following: Monthly Car Payment Monthly Insurance Cost Monthly Fuel Cost License Plate Tags and Registration Fees Cost Pro-Rated Monthly Oil Change Cost Pro-Rated Monthly Tune-Up Cost Pro-Rated Monthly Tire Cost Pro-Rated Monthly Battery Cost Pro-Rated Monthly Wiper Cost Pro-Rated Monthly Headlamp Cost Pro-Rated Monthly Brake Job Cost Pro-Rated Monthly Miscellaneous Monthly Car Expenses Calculate the minimum number of hours you need to work each month to keep your car on the road. $210 $7 = 30 Total Monthly Expense Hourly Income After Withholdings Log off your computer. Hours Needed to Work Activity Journal 1. Complete the Procedure 1 table below or organize your data in a computer spreadsheet program. Vehicle Information Manufacturer Make and Model Year Engine Size Fuel Efficiency (MPG or L/100 km) Six Month Budget Vehicle Cost Six Month Cost of License Plates, Registration, and Title Transfer Fee Sales Tax = Vehicle Cost x Sales Tax Percent in decimal form Price of Fuel per Unit Measure (Gallon or Liter) Six Month Fuel Expenditure if you travel 1,000 miles (1,609 km) a month Fuel Costs = (6,000 miles/fuel Efficiency in MPG) x Price of Fuel per Gallon or Fuel Costs = ((9,654 km/100) x Fuel Efficiency in L/100 km) x Price of Fuel per Liter Cost Cost of Six Month Liability Insurance Policy Quote 1 Quote Chosen Quote 2 Quote 3 Cost of Two Oil and Filter Changes (Include Labor Costs if Applicable) Cost of One Major Tune-up (Include Labor Costs if Applicable) Unexpected Repairs $ Estimated Total Car Expenditures $5,000 Budget - Total Car Expenditures = Amount Under or Over Budget

8 22 Auto Upkeep Workbook 2. Complete the Procedure 2 table below or organize your data in a computer spreadsheet program. Vehicle Information Manufacturer Make and Model Year Engine Size Fuel Efficiency (MPG or L/100 km) One Month Budget Current Interest Rate Monthly Payment on $4,000 loan for 48 at Current Interest Rate Cost of Monthly Liability Insurance Policy Monthly Policy = Six Month Policy/6 Quote 1 Quote 2 Quote 3 Cost Quote Chosen Monthly Cost of License Plates, Registration, and Title Transfer Fee Price of Fuel per Unit Measure (Gallon or Liter) One Month Fuel Expenditure if you travel 1,000 miles (1,609 km) Fuel Costs = (1,000 miles/fuel Efficiency in MPG) x Price of Fuel per Gallon or Fuel Costs = ((1,609 km/100) x Fuel Efficiency in L/100 km) x Price of Fuel per Liter Cost of License Plates, Registration, and Title Transfer Fee Pro-Rated Monthly Oil Change Cost Pro-Rated Monthly Tune-Up Cost Pro-Rated Monthly Tire Cost Pro-Rated Monthly Battery Cost Pro-Rated Monthly Wiper Cost Pro-Rated Monthly Headlamp Cost Pro-Rated Monthly Brake Job Cost Pro-Rated Monthly Miscellaneous Monthly Car Expenses $16.00 Estimated Total Monthly Car Expense Hours Needed to Work per Month = Total Monthly Expenses/$ Why should you obtain several insurance quotes? 4. What is the second most costly pro-rated monthly expense? 5. Why is it important to budget for expenses? 6. How could you reduce your monthly expenses?