The best transportation option for Jim is C. Utilizing his saving as a down payment and buying the car using an auto loan.
Auto loan is a loan secured for the expressed purpose of purchasing a car. We can save money by paying off your car loan early. Because we are most likely more than halfway through our loan, most of our payment is currently going toward the principal.
There are four basic building blocks of a car loan:
1. Loan Cost : the principal and the interest. The principal is the negotiated cost of the vehicle itself. The interest refers to the total amount of the costs accrued over the life of the loan based on the principal amount and the stated interest rate.
2. Interest Rate : a basic rate charged to the borrower for the money loaned.
3. Down Payment : an upfront amount of cash paid by the borrower at the time of the purchase of the vehicle.
4. Terms and Conditions : all of the other items that make up a car loan, including the term of the loan, normally stated in a number of months or years; insurance and registration requirements; loan payoff and resale terms; etc
Grade: 9
Subject: business
Chapter: car
Keywords: the market for a car, money, the best transportation option, saving, auto loan.
The correct option is C).
Utilizing his saving as a down payment and buying the car using an auto loan is the best transportation option for Jim.
Further Explanation:
Auto loan:
Auto loan is a type of loan offered for the purpose of car loan. Only the principle amount and the interest rate is being charged by the company or the bank who gives car loan. An upfront amount is paid at the initial time of the purchase of the car. A basic interest rate is charged which is not expensive for the borrower. So auto loan is quite secured method for purchasing a car on loan.
Justification for the correct and incorrect option:
A)
Buying a car using an auto loan: This option is incorrect.
Buying a car using an auto loan will not be a best transportation option for Jim as he will lose all his savings on buying a car.
B)
Leasing a car: This option is incorrect.
Leasing a car is not a good option for Jim as leasing will not make him the car owner. Leasing will just let him use the car and pay a certain amount of money at a regular period to the lease contractor.
C)
Utilizing his saving as a down payment and buying the car using an auto loan: This option is correct.
A down payment for buying the car using an auto loan will be the best transportation option for Jim as it will not lead to high pressure submission of the money at initial process and he can best utilize his saving as a down payment.
D)
Renting a car daily: This option is incorrect.
Renting the car daily will not be a good option for Kim as, it will be quite expensive.
Learn More:
1.Renting and owning
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2. Rental housing agreement
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3. Insurance bill
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Answer Details:
Grade: High school
Chapter: Renting car
Subject: Business studies
Keywords:
Jim is in the market for a car that will last for the next 10 years and has saved up some money for the purpose of a car, what’s the best transportation option for Jim, buying a car using an auto loan, leasing a car, utilizing his saving as a down payment and buying the car using an auto loan, renting a car daily.
