Operating and Maintaining a Vehicle

The cost of operating and maintaining a vehicle depends on… 1) Variable costs like gas tires ect. increase with more mileage. 2) Fixed costs; insurance, registration, and depreciation price always stays the same. 3) Depreciation; is the decrease in the value of the vehicle based on age and condition.

Formulas… Annual Variable Cost Annual Fixed Cost + Cost per Mile = Number of Miles driven Purchase Price Present Price - Depreciation = Number of Years Owned

You bought a used car for $4,000 last year You bought a used car for $4,000 last year. You drove 9000 miles in 1 year. The value is now about $3200 find the cost per mile given the table below. Variable Cost Fixed Cost Gas: $745.24 Insurance: $385.40 Oil: $71.85 License/reg.: $76.25 Maintenance: $114.36 Depreciation: Tire(s): $41.75 = (4000 – 3200)/1 = $800 Variable Cost = 745.24 + 71.85 + 114.36 + 41.75 = $973.20 Fixed Cost = 385.40 + 76.25 + 800 = $1261.65 = 𝟗𝟕𝟑.𝟐𝟎 +𝟏𝟐𝟔𝟏.𝟔𝟓 𝟗𝟎𝟎𝟎 Cost per mile = $0.25

Lucas Perry purchased a new four-door car 2 years ago at a price of $21,750. The estimated worth today is $13,920. The annual variable costs are estimated to be $595.20 per year with insurance costing $1,461 per year. Perry paid $112.60 for license and registration fees and drove 16,500 miles during the year. Find the cost per mile. Variable Cost = $595.20 Depreciation = (21,750 – 13,920)/2 = $3,915 Fixed Cost = 1461 + 112.60 + 3915 = $5488.60 = 𝟓𝟗𝟓.𝟐𝟎+𝟓𝟒𝟖𝟖.𝟔𝟎 𝟏𝟔,𝟓𝟎𝟎 Cost per mile = $0.37

Leasing a Vehicle 19b

Total Lease Cost # of payments Amt of payment = + Deposit * Some people prefer to lease a vehicle instead of buying. When leasing, make monthly payments to a dealer to drive the car. Basically you are renting the car. Total Lease Cost # of payments Amt of payment = + Deposit * License Fee + Title Fee +

You leased a truck. You are required to pay $250 per month for 60 months. The deposit was $1,500. You also pay $80 for title fee and $45 license fee. Find the lease cost. Lease Cost = 250(60) + 1500 + 80 + 45 = 15000 + 1500 + 80 + 45 = $16,625

Ralph Dunn leased a minivan for family use. He pays $229 Ralph Dunn leased a minivan for family use. He pays $229.00 per month for 39 months. His deposit was $1,000. He also paid $57.50 for title fee and $48.50 license fee. Find the lease cost. Lease Cost = 229(39) + 1000 + 57.50 + 48.50 = 8931 + 1000 + 57.50 + 48.50 = $10,037

Renting a Vehicle 19c

Cost per Mile Total Cost = Number of Miles Driven When renting, rental agencies may charge a daily rate plus mileage or just a daily rate. Cost per Mile Total Cost = Number of Miles Driven

You rent a mustang for 4 days at $35. 95 per day You rent a mustang for 4 days at $35.95 per day. You are required to pay $0.23 per mile. Renters insurance is $15 per day. You drove 432 miles and had to spend $51.52 on gas. 1. Find the cost of renting the car. 2. Find the cost per mile to rent a car. Rent Cost = 35.95(4) + .23(432) + 15(4) + 51.52 = 143.80 + 99.36 + 60 + 51.52 = $354.68 = 𝟑𝟓𝟒.𝟔𝟖 𝟒𝟑𝟐 Cost per mile = $0.82

Mark rents a sedan for 3 days at $41. 95 per day. He paid $0 Mark rents a sedan for 3 days at $41.95 per day. He paid $0.20 per mile, for all miles over 150 miles per day. He drove 186 miles the first day, 78 miles the second day, and 210 mile the third day. Gasoline cost him $32.68. He paid $12.50 per day for the collision waiver. 1. Find the cost of renting the car. 2. Find the cost per mile to rent a car. Rent Cost = 41.95(3) + .20(36+60) + 12.50(3) + 32.68 = 125.85 + 19.20 + 37.50 + 32.68 = $215.23 = 𝟐𝟏𝟓.𝟐𝟑 𝟏𝟖𝟔+𝟕𝟖+𝟐𝟏𝟎 Cost per mile = $0.45

19: Operating, Leasing, & Renting Questions Summarize your notes Homework Worksheet Quiz