Purchasing Your First Vehicle

Premise: Now that all of you have been employed for a little bit, or you should have obtained a job by now, we are going to make a couple assumptions. The first being you saved approximately $3500- to apply toward your first vehicle. The second, your parents are so impressed, they decided to match your earnings. For your FATE today, deposit $7000- into your account(s). If you go over the amount allocated for your first car, you must write a check for the balance.

First Time Car Buying
If you are a teenager in high school or a college student with no established credit history, there are a number of barriers in the way to your entry into car ownership. When you are young and invincible, you have all these starry eyed dreams about the car you are going to get, then reality sets in, as concepts you never had to deal with before suddenly leap out of nowhere to crush your dream and knock you back down to earth. How are you going to pay for your new car? Have you gotten insurance quotes? Now you have to pay $80 a month in gas, and there are oil changes, new batteries to buy, and other unexpected expenses.

Barriers to getting your fist car
Since you have never bought a car before, here are the barriers and concepts you must keep in mind when car shopping:

  • Lack of credit history is the biggest barrier. It is very difficult to get a car loan, unless you convince your parents to cosign. As such, for the purposes of this activity, you must buy a used car outright.
  • Some car salespeople will rake you over the coals if you are a first time car buyer
  • Lenders won't approve car loans on used cars older than 5 years. This is another reason we are going to look at buying a car outright; however, you may look at car prices in the event you think you will purchase a new vehicle for your first car in the real world.
  • Insurance rates for teens especially are very costly, often in the $5000 range
  • Insurance rates for single males under the age of 25 are also very costly
  • Now you have to deal with car repairs and other maintenance costs, new tires, etc.
  • Safety perspective: Teen driving safety issues

Review the following links and consider your income to date:

15 Dependable Used Cars Under $10,000

10 Best Used Family Cars Under $15,000

10 Best Used Cars Under $8,000

Now, Find a car: You may access other sites, but the above-referenced sites will have everything we are asking you to find. Be careful of time constraints and observe due date.

What car did you choose? List the make, model, year & asking price

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What are the features of the vehicle? Consider anti-lock brake system, airbags, sunroof, car alarm, etc…

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In the space provided, write down the person’s name, dealership or company to whom you would write a check for the car:

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If you found the car on another website, copy and paste the URL address here:

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Find the Value for the car according to Kelly Blue Book information:

What is the Kelly Blue Book value for the car?______

Gas mileage and safety ratings can be found at

What type of gas mileage does your car get? ______

What is the safety rating of the vehicle you chose?

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Now, it’s time to look into some statistics about driving and find insurance. Look at the following link:

Click “Teen Driving” - center page, 2nd box

Read “Teen Driving Statistics” and answer the following questions:

  1. List 3 statistics that surprised you
  1. ______
  1. ______
  1. ______
  1. What day(s) and time frames account for more teenage driving deaths than any other day or time? Why do you think this is the case?

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  1. What are the top 3 driving distractors attributed to teens?

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Now, look over to the right-hand screen. You should see a green box with “Additional Information.” Click on “Commonly Asked Questions About Auto Insurance”

Answer the following inquiries:

  1. Name two ways a teen might be able to save money on auto insurance:

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  1. In your own words, explain why auto insurance is so expensive for teens

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  1. What do you need to buy your own insurance?

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  1. What will happen to your insurance if you get into an accident or a ticket?

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  1. Look at the chart showcasing insurance rates for girls and boys and how the insurance increases with an accident or ticket. Note:the company used better than average coverage for the rate examples, not barebones coverage, so they are not the company's lowest prices. All are based on the teen driving a 2003 Honda, normal use. Why do you think the rates for males and females are so different?

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Now, let’s look at auto insurance coverage. Things you need to know - each state has requirements on the amount of coverage you need by law and in addition, there are some optional components. With all insurance there is a deductible the insurer must pay prior to receiving benefits from the insurance company. Usually, the higher the deductible the less you pay as an insurer, but of course, you pay a lot more out of pocket initially before benefits are payable.

Find out what requirements your state mandates based on the state your identity resides by visiting the following website: Car Insurance Requirements by State

Define the following acronyms (see Types of coverage required). If you need a better understanding of each, please look them up. You may see these terms again … somewhere 

  • BI: ______
  • PD: ______
  • PIP: ______
  • PPI: ______
  • UM: ______
  • UIM: ______

What are your state’s requirements? Explain what these requirements mean. (seeMinimum Liability Limitsat the top under Types of coverage required).

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*For this activity, you will need to enter an email address. I created one for the purpose of this activity. Use your school gmail.

Directions:

  • Go to: If you experience issues, do a random search online for another company that can provide you with a quote.
  • Type in your IDENTITY’S information. Refrain from entering personal information. Make sure you are using a real city, state and zip code for the area. Make up the phone number. Leave the Social Security Number blank. Do not include anyone else on the policy, so if the quote asks if there are other members that drive in your home, you may answer in the affirmative, but do not add them to your policy.
  • Wait a few minutes and get your quote
  • You may shop around, but when you have finished, copy and paste your insurance quote below

My Insurance Quote (You may take additional space)

Decide whether you will pay your premium quarterly, biannually or annually and note your decision here: ______

Last, but not least,

  • Write out two checks. One to purchase your vehicle and the other to insure your vehicle.
  • Deduct the amounts from your account
  • Turn in this worksheet by emailing your respective teacher or saving it under your profile. If you save the work under your profile, please tell your teacher. If you do not know how to do any one of these things, please ask for assistance.
  • Turn your checks into your teachers. Note group number and block at the top right of the check.