Authentic Lessons for 21st Century Learning

How Will I Pay for My Car?

Standard 7: Understanding Loans

Susan McHale, Kristen Sublett, Niky Styers, Melissa Gunter | Published: July 20th, 2022 by K20 Center


Acquiring the use of a car is a rite of passage for high school students. In this personal financial literacy lesson, students will investigate the cost of a car, types of lending agencies, and additional costs associated with car ownership. This lesson does require that students have access to the Internet for research purposes. This lesson includes optional modifications for distance learning. Resources for use in Google Classroom are included.

Essential Question(s)

What are the procedures and responsibilities of borrowing money? What procedures and responsibilities should be considered when borrowing money to buy a car?



Students play a game to guess the price of a car.


Students brainstorm expenses related to purchasing a car.


Students use Internet resources to investigate different types of lending agencies for car loans.


Students examine some issues associated with car buying.


Students use a graphic organizer and research notes to assess their learning.


  • Lesson Slides (attached)

  • Lending Options Note Organizer (attached, 1 per student)

  • Window Notes Chart (attached, 1 per student)

  • Lending Agency Flyers (Good Partners Credit Union, Loan Masters State Bank, and Reliable PayDay Loans) (attached, optional)

  • Computer paper or tablet paper

  • Sticky notes

  • Internet-enabled student devices for research


Use the attached Lesson Slides to follow along with the lesson. Begin this lesson by displaying slide 3. Invite students to look at the picture of the 2020 Ford Mustang and ask them which price they think is right. Direct students to price options A-D on the same slide, and invite them to write down the answer they believe is correct on a slip of paper or sticky note. Once students have made their choices, call on students to share which answer they picked and why.

Once students have had an opportunity to share, tell students that the correct answer is "C," $35,690. You may also note that even this price is listed with a note that says "starting at," which means that depending on the specific features of the car, it could be even more expensive.

Next, ask students if they were surprised by the price of the car. If so, why? You might note that there are many car options that are significantly cheaper than the example, but that most cars still cost a lot of money. Additionally, ask students these follow-up questions: Can most people walk into a dealership and buy a car in cash? Why or why not? If not, then how do people go about buying a car? Note to students that most people need to borrow money or take out a loan to buy expensive things such as cars.

Display slide 4. Read the essential question: What are the procedures and responsibilities of borrowing money? What procedures and responsibilities should be considered when borrowing money to buy a car? Ask students to consider these questions during the lesson.


Display slide 5. Explain to the class that, when thinking about buying a car, there are several things to consider regarding the cost of ownership. Tell students that cars can be purchased new or used. Ask students to turn to an Elbow Partner to discuss what the pros and cons of choosing between a new car and a used car might be. Invite several students to share their answers with the whole class.

Next, display slide 6. Ask students to turn back to their Elbow Partner and brainstorm what additional costs or expenses are involved when buying a car. After pairs have had a chance to discuss, ask for partners to share answers with the whole class. Then, show slide 7 to see if partners identified most or all of the additional costs to consider when buying a car.


Move to slide 8. Explain to students that if they have not saved up the entire sum of money needed for a car, and if they don't have the budget for the additional costs of owning a car, there are different loan options that can be considered. Display slide 9. Ask students to find an Elbow Partner and match each lending option with its description. Invite them to write their answers down on a spare sheet of paper or on a sticky note. Give pairs time to discuss. Once students have matched lending options to their descriptions with their partners, share the correct answers. Ask student partners to discuss or brainstorm a few possible pros or cons of different lending options as they examine the definitions.

Next, display slide 10. This slide defines "predatory lending" for students. Ask students to consider the four types of lending options they just discussed. Based on the definition of predatory lending, which option do they think would be considered a predatory lending practice? Ask students to share their answers explaining their reasoning.

Move to slide 11. Pass out a copy of the attached Lending Options Note Organizer to each student. Read the directions on the organizer aloud. Invite each student to select one of the cars shown and record its make, model, and year. Then invite students to conduct their own Internet research to determine their car's interest rates via all four lending options. Students should note their Internet sources as they do so. Finally, have students calculate the interest (cost) that would be added to a monthly car payment for a car of their choosing.

Students should also complete the What did you learn? paragraph summary at the bottom of the Lending Options Note Organizer in their own words. Prior to turning in this assignment, you may choose to have students share what they learned and wrote for this paragraph.


Show slide 12. Explain to students that there can be issues that arise when buying and owning a car. Some examples of common issues include "upside-down" payments, non-payment of a car loan, and bad credit scores. Divide students into small groups of 3-4. Ask student groups to choose one of the issues listed on slide 11 to research. Alternatively, you may choose to assign student groups to particular issues.

Next, display slide 13. Ask students to create Window Notes over the issues, consequences of those issues, and solutions for those issues that might arise with car ownership. Pass out the Window Notes Chart to each student. Ask students to, using the internet, research their group's issue and fill in the corresponding sections in the cart. Move to slide 14 to show an example response for the Window Notes chart. This example could be used to give students an idea of what is meant by consequences and solutions for the issues that might arise. Consider having students use this information to create a poster to share with the class. If you choose not to do a poster, students can simply present the information from their charts to the rest of the class.


Once students have shared their charts or posters with the class, go to slide 15. Point out to students that not only can failing to repay a loan be problematic for an individual, but it can also impact others. Conclude the lesson with a final question: How does non-repayment of loans impact individuals, families, businesses, and the broader economic system as a whole? Invite students to discuss this question with their groups before sharing out with the whole class.

Additionally, the Lending Options Notes Organizer and the Window Notes Chart or poster can serve as assessments for this lesson.