Buying a Car and Insuring It

What is the Difference Between... Type of Car You Want Type of Car You Need Type of Car you Can Afford

Narrowing Your Choices Select a vehicle that will best meet your needs Consider – How many passengers will you carry? – Will you need good fuel economy? – What will you use the vehicle for? – Price range

Research and Compare Before going to dealers research the vehicles you are interested in Use: – Consumer Reports —print and internet Consumer Reports – Edmunds —internet Edmunds – Car and Driver – print and internet Car and Driver – Kelley’s Blue Book —print and internet (KBB.com) Kelley’s Blue Book

When Researching, Look For... Specific models Performance Repair records Safety features Suggested prices Overall reliability ratings

Getting Credit Two Types – Bank Visit the bank to see how much money you will be able to borrow and at what interest rates. – Dealer Check with the dealer, they may be able to offer you a better interest rate than your bank.

Visiting the Dealers Best day to look— – Sunday When dealership is open: – Gather information only – Collect brochures, ask questions, take notes

Sticker Price Located on driver’s side rear window Contains – MSRP – Manufacturers Suggested Retail Price – Features – Options – Other costs

Second Visit Talk to same salesperson Ask to see invoice of car – Invoice will show what the dealer paid for it – This should be the price that you start negotiating from – If salesperson refuses, then walk out

Testing and Inspecting Cars Compare: – Ride – Handling – Features – Cost – What else would you compare?

Trade-Ins Do not talk about the trade-in until the cost of the new car has been determined

Making An Offer Decide on a price and STICK WITH IT – This should NOT be your initial offer Don’t reveal any emotions Be prepared to bargain

Sales Agreement Once a price has been agreed upon, the sales agreement will be completed Legal document that contains the specific details of the purchase Must be signed before the sale is complete

Buying a Car Without Getting

Purchasing Used Cars

Variety of Places to Find New Car Dealers Used-car dealers – Unlikely to have a service department – Limited warranty Private owners – Sometimes the best place to find a good deal – Have vehicle checked out by mechanic before purchasing

Dealer Packs High priced, high profit dealer services Examples: – Dealer preparation – Wax and polish – Rustproofing – Extended warranties

Leasing a Car Contractual agreement Monthly payments made over set period of time No ownership interest When time is finished, car is returned to leasing agent or can be bought for residual value

Why Lease??? Can afford nicer vehicle No large down payment Get new vehicle more often

Lemon Laws Your car is a lemon if: – You have taken the car in four unsuccessful attempts for repair for the same defect Your car has been out of service for a total of at least 30 days Keep good documentation

Insuring Your Car

Requirements All states have minimum insurance requirements for registration of vehicle – Illinois requires liability only

Cost of Automobile Insurance Premium (cost of insurance) is based on several factors:

Cost Factors Car – Model, style, age – Location – Color – Engine size – Number of miles driven daily Driver – Age, gender, marital status – Driving record – Number of claims filed – Primary vs. secondary driver

Types of Automobile Coverage

Liability Protects insured against claims for personal injury or damages to other person or their property Insured receives nothing Described in series of numbers 100/300/50 – 100 = up to $100,000 medical for one person – 300 = up to $300,000 total medical for all persons – 50 = up to $50,000 property damage

Collision Coverage Covers repair or replacement of your own car Will pay regardless of who is at fault Usually has deductible – Out of pocket expense before insurance pays

Comprehensive Coverage Damage to your car from events other than collision Examples: – Fire – Hail – Water – Falling objects – Natural disasters – Vandalism

Personal Injury Protection (PIP) Also known as Medical Coverage Pays, regardless of fault for: – Medical – Hospital – Funeral Of insured, their family and passengers

Uninsured & Underinsured Motorist Protects insured against other drivers who either don’t have enough insurance or no insurance at all