# Car Budget Activity

Lawrence Klepingerlhk-l [at] highway.or.jp

## The Handout

### Cost of Owning a Car on a Monthly Basis over Ten Years

- Cost of Car (One-time cost)

____________________________ - Driving School (One-time cost)

____________________________ - Car Insurance (Yearly cost)

____________________________ - Car Inspection (Every two years)

____________________________ - Gas and Oil (Every month)

____________________________ - Maintenance (Every month)

____________________________ - Parking (Every month)

____________________________ - Accidents (Estimate)

____________________________ - Highway Travel (Estimate)

____________________________ - Speeding Tickets (Estimate)

____________________________ - Emergency (Estimate)

____________________________ - Miscellaneous (Estimate)

____________________________ - Total Monthly Cost

____________________________

## To the Teacher

This activity can be easily adapted to your own country

This exercise shows the importance of good budgeting to your students. It also shows basic common sense when planning to buy a car.

First have the students guess how much they think it will cost to maintain a car per month for ten years. They will probably guess the average of 25,000 to 30,000 yen.

Hand out the blank forms and have them sit together and figure all the costs. Remember that the one-time costs are to be divided by 120 (10 years = 120 months). Yearly costs by 12 and the monthly costs take care of themselves.

The car inspection cost is a little tricky. Simply put, figure the total cost to be 700,000 yen divided by 120. This represents 3 two-year inspections and 1 year at 100,000 yen. The reason for this is the first three years on a new car have no inspection fee.

Have the students figure all the prices and it should come to around 96,000 yen. If some argue that the parking is too much (25,000 yen a month here in Nagoya) then delete it. They still come up to about 70,000 yen a month, which is way above what they had guessed at first.

I have found this a great way for students to grasp the importance of proper budgeting. This method can then be transfered to business propositions.

The Internet TESL Journal, Vol. III, No. 7, July 1997

http://iteslj.org/