Sticker price, financed price, and the ratio you should refuse.
Visuals
The two prices
A side-by-side diagram. On the left: a $30,000 sticker price with a 0% down, 6-year, 7% loan. On the right: the fully-loaded cost — $30,000 principal + $5,600 interest + $2,000 depreciation over the first year + $900 sales tax and fees. The bottom of the diagram reads: 'The sticker is the shipping label. The full cost is what you pay to own.'
Key Ideas
Financed purchases have two prices: sticker and full cost.
The gap is large enough that most households would reconsider the purchase if they saw it.
Visuals
Diagrams and schematics accompanying this lesson.
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