Week 10

Question 1

What is a new vehicle considered in terms of investment?

Answer 1

A depreciating asset

New vehicles typically lose value quickly, making them poor investments.

Question 2

How much does a new vehicle’s value drop immediately after purchase?

Answer 2

10%

This rapid depreciation occurs the moment the vehicle is driven off the lot.

Question 3

What is the additional value loss of a new vehicle within the first year?

Answer 3

Another 10%

This further depreciation highlights the poor investment nature of new vehicles.

Question 4

Why might purchasing a car be a necessity?

Answer 4

To get to your job to earn money

If mass transportation is unavailable and one does not live in an urban area, a car becomes essential.

Question 5

What should you try to find when buying a car?

Answer 5

The best used car at the best price

It is advised to properly maintain the vehicle for longevity.

Question 6

What is the recommended approach to using a car after purchase?

Answer 6

Drive it until ‘the wheels fall off’

This suggests maximizing the value of the investment by using the vehicle for as long as possible.

Question 7

What should you consider when purchasing a car?

Answer 7

All facets of the purchase and post-purchase expenses

Understanding the full financial impact is crucial.

Question 8

Fill in the blank: A new vehicle is possibly the worst _______.

Answer 8

investment

Vehicles depreciate quickly, making them less favorable as investments.