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Personal Finance Autos and You

Personal Finance Autos and You. So You Want a Car, Huh?. Well, hey, only $249 a month! I can afford that!. $249. Discussion Questions. What costs are associated with owning and operating a car?. Costs of owning a car. FIXED Initial purchase price Registration and title costs

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Personal Finance Autos and You

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  1. Personal FinanceAutos and You

  2. So You Want a Car, Huh?

  3. Well, hey, only $249 a month! I can afford that! $249

  4. Discussion Questions • What costs are associated with owning and operating a car?

  5. Costs of owning a car • FIXED • Initial purchase price • Registration and title costs • Sales tax • Financing costs • Depreciation • Insurance • Scheduled maintenance • Storage (renting garage space)

  6. Costs of operating a car • VARIABLE • Unscheduled repairs and maintenance • Gasoline • Oil and other fluids • Parking and tolls • Tickets

  7. How Much Can You Afford? • The 10% rule • spend no more than 10% of your take home (net) pay on a car payment • If you make $2000 a month, try to find a car payment of $200 at the most • Work with a budget

  8. Before Buying a Car • Narrow your choices • Research and compare • Credit Pre-approval • Visit Dealers • Test/Inspect

  9. Price Bargaining Schemes

  10. Discussion Questions • What’s better NEW or USED? • Compare the Advantages and Disadvantages of New/Used Cars • Come up with 3 Pros and 3 Cons for each

  11. NEW CARS USED CARS PROS PROS CONS CONS ANALYZE:NEW and USED Cars

  12. Places to Buy a Car • From a dealer • From a private party • From an auction • Others? • Internet? • Using the internet as a research tool

  13. A used car from a dealer • Consider costs, reliability, dealer reputation • Read the "Buyer's Guide" sticker • Consider the warranty and the service contract • What to do if you have problems?

  14. A used car from a private party • No warranty • Cost less than from a dealer • Make sure you get the TITLE. • A TITLE proves ownership of the car

  15. 5 Tips When Looking at Used Cars • Check Body Condition • Check Odometer • Consider Mileage • Get a Mechanic to Check the Car • Get Registration and Title before you buy

  16. IDENTIYFING PROBLEM AREAS IN USED CARS Muffler Radiator Exhaust Pipe Lights Engine Steering Wheel Electrical Suspension Arm Shock Absorbers Brake Shoes and Lining Tires

  17. THINK: What should a test drive include? • Drive on bumpy roads, freeways, etc • Run in all gears • Test brakes • Start the car several times • Listen for strange noises • Park the car on a clean surface and check for drips • Check lights, windows, radio,heater, A/C, etc.

  18. A new car • Read about new car features and prices • Shop around • Plan to negotiate price • Learn the terms • Consider the service contract

  19. Types of warranties • As-is warranty • Implied warranty • Dealer warranty • Manufacturer's warranty

  20. Service contracts • Preventing problems • Resolving disputes • Comparing promises of warranties and service contracts

  21. AUTO INSURANCE • Why do you need it? • Required by Law • Good Idea in case you get in a wreck

  22. Age Sex Marital status Personal habits (e.g., smoking) Type of use Frequency of use Location Driving record deductible Type of car Value and age of car Type of coverage Type of car Grades How are insurance rates set?

  23. DEDUCTIBLES • Usually either $500 or $250 • Deductible • The amount you pay after a Claim is filed • example: You back into a tree and do $650 in damages. • Your deductible is $250, then the insurance company pays you $400 • Your deductible is $500, then the insurance company pays you $150

  24. DEDUCTIBLES (cont) • So why would you ever want a $500 deductible? • Accident free discounts • You may not even want to file a claim. • Keeps insurance rates down.

  25. Types of coverage • Bodily injury liability • Property damage liability • Collision • Comprehensive • Medical payments • Uninsured motorist • Rental reimbursement • Towing and labor

  26. WHAT IS THE CAR WORTH? • New Cars • MSRP • Sticker Price / Retail Price • INVOICE PRICE • The Price the Dealer Pays • Your goal? To get as close to the invoice price as you can!

  27. Dealer Tricks • Highballing • Lowballing • Talk to the Manager • Bait and Switch • The Waiting Game • Good Guy / Bad Guy

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