8/8/2009
Fuel efficiency and travel
Buying a Car: Sticker
Price
The Sticker Price
As oil becomes harder and harder to find, the price of gasoline at the
pump becomes more expensive. People are looking for more fuel
efficient cars that will save them money and still provide the
conveniences that they want.
Almost all new cars for sale in today’s market display on the sticker
price the EMG (estimated miles per gallon). The EMG is important and
affects the operating cost of the vehicle.
Part of the green movement is designing more fuel-efficient and less
polluting gasoline-powered vehicles, choosing to buy and use smaller
and/or more fuel-efficient cars, and making good use of efficient
technologies by keeping cars well maintained and driving them
conscientiously. (Student Handout and Discussion)
Work in your notebook
Find the Sticker Price:
The sticker price on a new car shows the base price, the cost of options, and
the destination charge for delivering the car from the manufacturing plant to
the dealer. Auto manufacturers are required by law to put a sticker on each
car showing these costs.
The base price is the price of the engine, chassis and any other pieces of
standard equipment.
Options are extras such as radio, air conditioning and tinted glass.
1. Base Price: $8975
Options: $450, $610, $126 Destination Charge: $390
2. Base Price: $10,400 Options $195, $675, $810, $92 Destination Charge:
$325
3. Andy Dorfman sees a Tacoma Minivan that he is interested in buying. The
sticker price including the base price, options and destination charge is
$12,925. There is a 7.25% sales tax on the purchase of the van. How much
tax must he pay?
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8/8/2009
Dealers Cost
Auto dealers pay less than the prices on the sticker for both the basic car
and the options. The dealer’s cost is a percent of the sticker price. You
may save money by making an offer that is higher than the estimated
dealer’s cost, but lower than the sticker price.
The best time to get these kind of deals is when the next year cars come
out and the dealer needs to reduce his inventory of the previous year.
Purchasing a used car
Dealer’s usually advertise used cars for prices that are higher than what
they expect you to pay. Used-car guides, like Kelly’s Blue Book, will give
the3 average prices for cars . Make sure you look at the guides so that you
know the approximate price to offer for a used car.
Average Retail Price = average Retail Value + Additional Options – Options
deductions – Mileage deduction
Work in your notebook
Lisa and Tom Marker want to purchase a new Ford F-150 pickup. The
truck has a base price of $15,438, options totaling $3240 and a
destination charge of $360. They read in a consumer magazine that the
dealer’s cost for a Ford F-150 is about 80% of the base price and 77% of
the options price. What should they estimate as the dealer’s cost?
Work in Notebook
Jackie Morris would like to purchase a used 2004 Honda Civic that is
advertised for $8456. It has an AM/FM radio but no air conditioning. It has
been driven 78000 miles.
Jackie checked the Kelly Blue Book online and learned that the base price
for a used 2004 Honda Civic is $8967. However the used guide says to
deduct $275 if the mileage is between 75000 to 80000. The radio is an
option that adds an additional $100 on to the base price, but having no air
conditioning is a $250 deduction.
What average retail price should Jackie keep in mind when she makes an
offer for the car?
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