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BETTER MONEY HABITS MIDDLE SCHOOL LESSON:
COMPARING THE COST OF NEW AND USED CARS
LESSON 7 -- WHAT CAR SHOULD I BUY?
LESSON DESCRIPTION AND BACKGROUND
This lesson uses Better Money Habits: Comparing the Cost of New and Used Cars
(www.bettermoneyhabits.com) to explain the basic decisions involved in buying a car. The
lesson compares the costs associated with a new car to the costs associated with a used car,
including the price, financing, mileage, insurance, and maintenance. The purpose of this
lesson is to help students understand the decision to buy a car includes more than the price of
the vehicle or the monthly payments. The length of the video is about 7 minutes, and the
estimated time for this lesson is one 45 minute class period.
This lesson can be used to teach students about the decision-making process and correlates
with other lessons in Financial Fitness for Life, Grades 6-8, focused on comparative shopping
or decision-making. It is designed to be a supplemental or enrichment activity for these two
lessons.
BETTER MONEY HABITS VIDEO
Car Buying: Preparing to Buy or Lease: Comparing the Cost of New and Used Cars (7:02)
FINANCIAL FITNESS FOR LIFE CONNECTION, GRADES 6-8
Lesson 1: Decision-making, Grades 6-8
Lesson 17: Comparison Shopping, Grades 6-8
ECONOMIC AND PERSONAL FINANCE CONCEPTS
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Decision-making
Comparison shopping
Wants and needs
Costs and benefits
BETTER MONEY HABITS: MIDDLE SCHOOL
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BETTER MONEY HABITS MIDDLE SCHOOL LESSON:
COMPARING THE COST OF NEW AND USED CARS
NATIONAL STANDARDS FOR FINANCIAL LITERACY
Standard 2. Buying Goods and Services, Benchmark Grade 8
People cannot buy or make all the goods and services they want; as a result, people choose to
buy some goods and services and not buy others. People can improve their economic wellbeing by making informed spending decisions, which entails collecting information, planning,
and budgeting.
OBJECTIVES
At the end of this lesson, the student will be able to:
 List the costs of owning a car
 Compare the costs of buying a new car with the costs of buying a used car
TIME REQUIRED
One 45 minute class period
MATERIALS
Handout 7.1: What Car Should I Buy?
PROCEDURE
1.
2.
3.
4.
Ask students what kind of car they would like to drive. Encourage them to discuss the
reasons we have so many different kinds of cars available for purchase today. Ask how
the car they want to drive will meet their needs for having transportation to and from
school or to and from work.
Ask students to list the different types of costs associated with owning a car. Remind
them that we have many options when deciding what kind of car to drive and that it is
important to determine which car best fits our needs and our budget.
Introduce the video Better Money Habits: Comparing the Cost of New and Used Cars by
explaining that it examines the process used to determine which car would be best for
them to purchase. Provide students with a copy of Handout 7.1; ask them to complete the
handout while watching the video.
Show the video. After viewing the video, discuss the information in the handout to be sure
they understand the various costs.
BETTER MONEY HABITS: MIDDLE SCHOOL
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BETTER MONEY HABITS MIDDLE SCHOOL LESSON:
COMPARING THE COST OF NEW AND USED CARS
CLOSURE
To conclude this activity, remind students that buying a car is one of the most expensive
purchases they will make. The actual cost of the car is only one of the expenses they will face
while owning and operating it. Being more aware of the ongoing costs will help ensure they
are making the best choice.
ASSESSMENT
To assess student learning in this lesson, have students answer the following questions:
1. What are the most important things to consider when you want to buy a car?
Answers: The price of the car, your monthly budget, the monthly payments, gas
mileage, the number of miles you drive, insurance costs, potential maintenance costs,
your personal needs.
2. What are some of the advantages of buying a new car?
It may get better gas mileage than an older car; it may have more safety features than
an older car; it may have lower maintenance costs than an older car; it may last longer
than an older car.
3. What are some of the advantages of buying a used car?
It may cost less than a new car; it may have lower insurance rates than a new car; it
may have lower monthly payments than a new car.
EXTENSION
This lesson may be extended by using the PACED Decision-Making model in Lesson 1 of
Financial Fitness for Life, Grades 6-8, to emphasis the decision-making process.
Have students write a paragraph explaining which type of vehicle (new or used) might be the
best option for their family to purchase.
BETTER MONEY HABITS: MIDDLE SCHOOL
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BETTER MONEY HABITS MIDDLE SCHOOL LESSON:
COMPARING THE COST OF NEW AND USED CARS
HANDOUT 7.1 – WHAT CAR SHOULD I BUY?
Use this handout to record the advantages and disadvantages of buying a used or new car. If
the criteria discussed in the video is an advantage, place a (+) sign in the appropriate column.
If the criteria is a disadvantage, place a (–) in that column. You should have either a (+) or a
(-) in every box below.
Criteria
Used Car
New Car
Price of the car
Depreciation
Interest rate on car loan
Gasoline mileage
Car insurance
Maintenance and repairs
Warranty
Resale value
Reliable/Dependable
Features such as safety and
environmental friendly
BETTER MONEY HABITS: MIDDLE SCHOOL
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BETTER MONEY HABITS MIDDLE SCHOOL LESSON:
COMPARING THE COST OF NEW AND USED CARS
Handout 7.1 Answers*
Use this handout to record the advantages and disadvantages of buying a used or new car. If
the criteria discussed in the video is an advantage, place a (+) sign in the appropriate column.
If the criteria is a disadvantage, place a (–) in that column. You should have either a (+) or a
(-) in every box below.
Criteria
Price of the car
Depreciation
Interest rate on car loan
Gasoline mileage
Car insurance
Maintenance and repairs
Warranty
Resale value
Reliable/Dependable
Features such as safety and
environmental friendly
Used Car
New Car
+
-
+
-
-
+
-
+
+
-
-
+
-
+
-
+
-
+
-
+
*Remind students that some answers may vary, depending upon the vehicle or the
circumstances. These answers reflect a more general description of the criteria explained in
the video.
BETTER MONEY HABITS: MIDDLE SCHOOL
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