This case series simulates the decision of choosing and financing a car. Reggie Fuller is a fry cook on the verge of losing his job if he keeps arriving late to work due to inconsistent public buses. Fuller’s dream car, the Lincoln MKS, is priced far beyond his budget ($50,000), but Fuller wonders if he can afford other new cars like the Nissan Altima (which costs $17,445) or the Toyota Camry (which costs $20,306). Unsure of how to proceed, Fuller seeks the advice of a family friend and mentor, who agrees to teach him what he knows about the car-financing process. Accompanying the case is a handout that teaches students how to calculate monthly auto loan payments.
This case (and, optionally, its B case, UVA-F-1885) is designed to be taught in a financial literacy course for non-MBA audiences. It provides the instructor with the opportunity to have the class discuss the basics of car buying, an important financial decision. The instructor can have fun encouraging students to talk about their dream car and helping them live the excitement of thinking about owning it. Important themes covered include the following: - The importance of budgeting. - The need to use financial analysis in making complex decisions. - The importance of maintaining a strong FICO score. - The importance of understanding the motivations of other players in every deal.