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Buying a Car Mini Unit Test Review

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  • After the age of 25, insurance premiums tend to decrease slowly but then increase after the age of 65.
    False
    True
  • Which of the following is TRUE about cars and depreciation?
    Car depreciate most after 10 years of use
    New cars do not depreciate
    Cars lose 10% value the moment you drive off the lot
  • _After you have decided which car to buy, go to the bank to get financing.
    True
    False
  • Moving from the city with street parking to the suburbs with a driveway may cause your car insurance to increase.
    True
    False
  • What is the formula for simple interest?
    I=P*r*t
    I=P/t
  • Calculate the simple interest on a $40,000 car loan taken for 7 years at 8% interest.
    $22,400
  • the amount you are charged to borrow money
    time
    principal
    interest
  • how long you have to pay off a loan
    interest
    time
    principal
  • the amount of money you pay each month for the length of the loan
    depreciation
    monthly payment
  • New cars do not lose value right away.
    True
    False
  • When negotiating the purchase of a car, your greatest tool is that you can walk away at any time.
    True
    False
  • Before buying a car, you should get quotes from 3 insurance companies.
    False
    True
  • Getting married may cause your car insurance to increase because married couples tend to be safer drivers.
    False
    True
  • Buying a used car may save you up to 50%.
    True
    False
  • According to experts, when is the best time to buy a used car?
    MLK Jr. Day
    Labor Day
    July 4th
  • the amount of money you borrow or finance
    interest
    time
    principal
  • Credit history is an important factor that is considered when calculating an insurance premium
    False
    True
  • Which of the following costs will not change the more you drive your car?
    Fuel Costs
    Insurance premium
    State Registration Fees
  • What is one advantage of buying a used car over a new car?
    Used cars tend to have a better value because new cars
    Used cars always come with warranties
    Used cars always have the latest features and technology
  • Moving to a state that requires higher minimum coverage may cause your car insurance to increase.
    False
    True
  • the rate at which your vehicle loses its value over time
    depreciation
    investment
  • All of the following are reasons that your car insurance might increase EXCEPT:
    Moving to a big city with a lot of traffic
    Getting into a car accident
    Decreasing your yearly mileage
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