Car Buying and Depreciation Quiz

What is the main reason why new cars are considered a financial triple threat?

• They require high maintenance costs

• They are expensive to purchase

• They depreciate in value quickly

• They have high interest rates for financing

What percentage of depreciation does a new car experience in the first five years?

• 63%

• 75%

• 50%

• 30%

Tags

CCSS.6.RP.A.3C

What is the main disadvantage of leasing a car?

• You have to pay for the depreciation of the vehicle

• You have to pay high interest rates

• You have to make a large down payment

• You have to pay for the maintenance costs

What is the recommended age of a car to buy in order to skip the majority of its depreciation?

• 5 years old

• 7 years old

• 3 years old

• 1 year old

What is the recommended approach for buying a car in terms of payment?

• Save up to buy the car in cash

• Take a loan with a large down payment

• Take a loan with high interest rates

• Lease the car for a long term

What is the monthly payment for a new car of $20,000 with a $4,000 down payment and a 60-month loan at 4.25% interest?

• $295.42

• $350.00

• $250.00

• $400.00

What is the monthly payment for a 5-year-old model of the same car, with a $4,000 down payment and the same loan arrangement?

• $50.00

• $150.00

• $100.00

• $62.78

What is the monthly saving by buying a 5-year-old model instead of a new car?

• $250.00

• $100.00

• $150.00

• $200.00

What is the potential amount you could have in 35 years by investing the monthly savings from buying a 5-year-old car at a 7% return rate?

• $100,000

• $250,000

• $500,000

• $421,459

Tags

CCSS.HSF.BF.A.2

What is the main takeaway from the video regarding car buying and depreciation?

• Buying a 5-year-old car and investing the monthly savings can lead to financial security

• Leasing a car is the best option

• Buying a 5-year-old car is not cost-effective

• New cars are a good investment