CHAPTER 28 – CARS AND THE CONSUMER

BUYING A CAR  When you shop for a car, you should consider:  Safety  Price  Quality  Warranty  Fuel economy

SAFETY OF A CAR  Federal law requires car dealers to provide a pamphlet that outlines the safety features of all new cars  Pamphlet includes information on acceleration and passing ability, stopping distance, and tire load  Check visibility from driver’s seat – check for blind spots, windshield glare, mirrors, accessibility of all controls

PRICE OF A CAR  Virtually no one pays the sticker price for a new or used car  Size of the discount depends on the time of year, your negotiating ability, special sales, manufacturer’s bonuses, rebates and other factors

QUALITY, WARRANTY, FUEL EFFICIENCY OF A CAR  Warranty  Many new cars have “bumper to bumper” warranties covering most parts except batteries, tires, and defects  Some have extended warranties for the engine and drivetrain  Be certain to read and fully understand exactly what protections the warranty provides  Federal Trade Commission requires used-car dealers to place a large sticker (a Buyer’s Guide) in every window with the warranty information  Fuel Efficiency  Cars that are fuel efficient can save money and help protect the environment

FINANCING A CAR  Buyers typically make their purchases on credit  Buyers select the length of the repayment periods (up to 5 years) – the longer the repayment period, the lower the monthly payments will be  Interest rates on the car loans vary depending on a variety of factors  Car is new vs. used  Depended on the lender  Your creditworthiness  General economic conditions  Some require a down payment (cash at time of purchase)  Truth in Lending Act – requires that creditors give you written disclosure of important terms of the credit agreement before you sign it, including APR, total finance charges, total amount financed, and charges for late payments

LEASING A CAR  Under a lease agreement, the consumer does not own the car but pas a monthly fee to drive the car for a certain period of time  At the end of the term, the consumer can pay an agreed-upon amount, which may equal the rest of the car’s value, to purchase the car – most return the car and pay the required end-of-lease charges  Lease agreement usually restricts mileage and wear and tear, imposing additional fees for exceeding the limits on those terms  Agreement also includes provisions for an initial down payment, security deposit, and other fees  Some people take advantage of car sharing – renting a car by the hour in which the fee includes fuel and insurance