Grade 9-12

Car Loan Project

Time: 90 mins,
Updated: October 18 2019,


Students will be able to:

  • Use economic concepts and mathematical calculations in making hypothetical decisions about buying and financing a car
  • Experience this real-life application with their families

In this personal finance lesson, students will evaluate different advertisements about cars to learn about the car buying process.



In this lesson, students are going to participate in a hypothetical car buying experience that will need to be financed. Role-play as if you are a car salesman. Introduce different car options and let the students know that they will decide which will be the best choice for their situation. Ask students to share the kinds of features or characteristics that would be important to them in purchasing a car. Write this list on the white board.


Show the students some advertisements for cars that they might like to purchase. Below is a list of YouTube car commercial videos:

Feel free to find other car commercial videos to show students. Demonstrate how to look at different options and discuss which car will best suit their needs in their present situation. Show students Edmunds Car Buying Guide and Kelley Blue Book to learn how the advertised prices compare with market prices generally for cars of the same make, year, and model. Edmunds has both new and used car prices and also has an excellent discussion of lease versus buying and whether to trade in a vehicle or sell it yourself.

Introduce the car loan project by printing and distributing copies of the Car Loan Rubric. Review the document together and notify students that a final presentation will be required.

Group Activity

Print and distribute copies of the Consumer Credit Application form to each person. Have students fill out the application form with the help of their group members. Remind them that they don’t have to put down actual information, they may make it up. But they do need to be sure to use realistic values, like salary for job. Their job could be the job they have now or a future job that they aspire to. Have the students decide whether they will have a down payment or a trade-in.

Have the students work in groups to find an advertisement for the car of their choice. Tell the students that once they have found the automobile of their choice and have determined the amount they will be spending on the car, they need to calculate the monthly payments manually. Explain to the students that the Amortization Auto Loan Calculator  may be helpful in calculating the monthly payments according to the amount of borrowed principal.

Once each person in the group has calculated their monthly costs in hard written form, have each person share details about their application and how much their monthly cost is for the car.

Individual Activity

Explain to the students that the following information must be included in their final report:

  • Evaluation sheet
  • An ad for the car of their choice (printed or URL)
  • A completed loan application
  • Monthly payments for each option calculated by using the monthly payment formula (neatly handwritten).
  • Total cost of the loan for each option (monthly payment multiplied by number of payments-neatly handwritten).
  • Printed copy of an amortization schedule of the loan option that is best for their situation
  • A typed summary of which is the best loan option for their situation along with a justification of why. A summary of what the students have learned from this project should be included in the written summary.
  • A completed Decision Making Grid [LINK doc]

Review the Decision Making Grid with students before releasing them to complete the summary and finalize their report. Have the students work individually to complete the Decision Making Grid and a typed summary of their project. Tell the students that as part of their written summary, they need to include what they have learned from this project. Have the students explain what they think their best loan option would be, and to justify their conclusion. Tell the students to consider the following situations that may influence their choices:

  1. The lowest interest rate
  2. The smallest monthly payment
  3. The shortest time
  4. The loan with the lowest cost


Have students present individually. Once all presentations are complete, have the students complete the Self-Evaluation Rubric for their project.


Activity 1

Introduce a different (more automated) way to calculate monthly car loan payments. Students will require a 1-1 device like a computer or tablet that can access/create spreadsheets. Students will utilize a spreadsheet to check their written calculation for monthly payments and total cost of the loans. Have students open Auto Loan Calculator for Excel. Have students compare their handwritten calculations to the excel one.