Chapter 6 Part 2
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Transcript Chapter 6 Part 2
Buying a Car
Important Car Buying Trade-Offs
The smaller the engine, the less gas it burns
Give up better acceleration and power
Newer Automobiles Cost more
Require fewer repairs
Smaller vehicles are more energy efficient; easier o
move and park
Larger vehicles protect people better
Can you think of any others??????
Two types of vehicles
Costs of Buying a Car
Opportunity Costs of Buying outright: Money and
time spent shopping
That money could be used on other things
Opportunity Costs of the Car loan:
The loan with interest added
Costs of Operation
Registration fee: Annual fee paid to state government
to run a vehicle
Costs depends on many factors
Maintenance:
Minor Maintenance: Oil Change (Tune Ups)
Frequent service=longer lasting vehicle
Major Maintenance: High Cost
Do your research!
Extended Warranty:
Two last vehicle Cost
Depreciation: Decline in value over time
Age, obsolescence, and wear and tear
Insurance:
Making the Best Choice
Talk to friends
Read Consumer Reports
Comparison Shopping: Dealers
Warranty Comparison
Test Drive
Safety Features
Get used cars inspected
Getting a Good Deal
Window Sticker: Suggested Retail Price
Watch for sales and promotions:
Rebates
APR Specials
Buying vs. Leasing
Lease: contract for use of a vehicle for a specified
term
Purchase option: After term is up, you can buy
Why Lease?
No down payment
Does not tie up credit
Pay only for what you use
Ways of Purchase
Cash
Financing
Either through the dealership or lending company
(Bank)
Fixed Rate: Rate remains the same
Variable Rate: Fluctuates according to market index
Buying a Used Car
Check “Buyers Guide Sticker”
Required on all used cars by law
States any warranty info or “As Is”
States you should get vehicle inspected
States you should get all promises in writing
“As IS”
No Warranty
Dealer has no further responsibility
Implied Warranties
Warranty of Merchantibility: product will do what its supposed to
Warranty of fitness for a specific purpose
Ex. It will haul a trailer
Buyers Guide
INSURING A VEHICLE
A. No-Fault Insurance – Passed in 1976
- everyone must have no-fault insurance
- When an accident occurs each owners insurance
company will pay
immediately by their insurance company. Insurance
companies will
investigate who was at fault and settle up later.
INSURING A VEHICLE
A. Liability Insurance
- pays for damage to other person’s car and injury
- required insurance “minimum insurance”
B. ND minimum
- Bodily injury: $25,000/$50,000
- Property: $25,000 per accident
INSURING A VEHICLE
A. Comprehensive Insurance:
- Covers your vehicle for damage/loss that occurs from
theft, damage by flood, fire, or glass breakage.
B. Collision:
- Pays for damage to your car caused by collision (less
the deductible.
INSURING A VEHICLE
A. Uninsured/Underinsured
- covers your losses if someone at fault has no insurance.
B. Deductible
- amount one must pay before insurance kicks in
C. Premium
- payment for insurance