Objective

By the end of this lesson, you will be able to understand and apply basic economic concepts related to buying a car, including depreciation, interest rates, insurance costs, maintenance costs, and alternative transportation options.

Materials and Prep

• Pen/pencil
• Notebook/paper
• Calculator
• Access to the internet for research

Prior knowledge required: Basic understanding of math operations and percentages.

Activities

1. Create a Shopping List

Think about all the items you would need to buy during a grocery shopping trip. Include food items, personal care items, pet items, and any other incidental items you may need such as sticky tape or batteries. Write down your shopping list.

2. Research Car Costs

Use the internet to research the following car-related costs:

• Depreciation of a car
• Interest rates of personal loans for a car
• Cost of third party car insurance per month
• Cost of full comprehensive insurance per month
• Estimated monthly maintenance costs
• Estimated cost of repairs
• Yearly cost of car license
• Yearly cost of car registration
3. Calculate Monthly Car Expenses

Using the costs you found in the previous activity, calculate the total monthly expenses of owning a car. Include depreciation, insurance, maintenance costs, and license/registration fees.

4. Explore Alternative Transportation Options

Research the cost of monthly train, bus, and other forms of transportation from your home to the nearest Costco and airport. Compare these costs with the monthly expenses of owning a car.

Eighth Grade Talking Points

• "Depreciation is the decrease in value of a car over time. It's important to consider depreciation when buying a car as it affects its resale value."
• "Interest rates on personal loans for cars determine how much you will pay in interest over the loan term. Higher interest rates mean higher overall costs."
• "Car insurance is important to protect yourself and others in case of accidents. Third party insurance covers damages to others, while comprehensive insurance covers damages to your own car as well."
• "Maintenance costs include regular services, repairs, and replacement of parts. These costs can vary depending on the car model and its condition."
• "License and registration fees are required by the government to legally operate a car on the road. These fees need to be paid annually."
• "Alternative transportation options such as trains and buses can be more cost-effective than owning a car, especially if you don't use it frequently."