#1
Which of the following is a typical upfront cost associated with purchasing a car?
Down payment
ExplanationInitial payment made when buying a car, reducing the amount financed.
#2
What does APR stand for in the context of car financing?
Annual Percentage Rate
ExplanationThe annual rate charged for borrowing or earned through an investment, expressed as a percentage.
#3
Which of the following is NOT typically considered a variable cost of car ownership?
Depreciation
ExplanationDepreciation is the reduction in value over time, not a directly variable cost.
#4
What is the purpose of GAP insurance in car ownership?
To cover the difference between the car's actual cash value and the amount owed on a loan
ExplanationProtects against financial loss if a car is totaled and the insurance payout is less than the loan balance.
#5
What does the term 'residual value' refer to in the context of car ownership?
The value of a car at the end of a lease term
ExplanationEstimated value of a car at the end of a lease, influencing lease payments.