TransportationTransportation Life is a highway… let’s just hope the crazy drivers aren’t in your lane!

Transportation Options Mass Transit – available in most large, urban areas Mass transit systems are designed to carry large numbers of people in an efficient (and economic) manner Personal Transportation

Buying v. Leasing Buying an automobile will add substantial costs to the overall price of the car Leasing an automobile is often a cheaper way to go…but you don’t have anything of value to show for your money spent

Buying an Automobile Down Payment Monthly Payments Insurance Payments

Leasing an Automobile Up-front Costs Monthly Payments End-of-Lease Costs Insurance Payments

Real Cost of an Automobile

2010 Toyota Camry - $26,423

Loan Costs – $21,400 financed 3-Year Loan 4.03% interest rate $632 per month Car is paid off in 3 years 4-Year Loan 3.89% interest rate $482 per month After 3 years, you still owe $ Year Loan 4.52% interest rate $399 per month After 3 years, you still owe $ Year Loan 4.79% interest rate $343 per month After 3 years, you still owe $12,332

Loan Costs The value of the car after 3 years is roughly $ Year Loan6-Year Loan $9580 owed$12,332 owed

Regular v. Hybrid 2010 Camry - $26, Camry Hybrid - $33,123 Annual fuel savings with the hybrid: $600 “Payback” Period based on fuel savings: 12 years

Insurance Costs To insure your 2010 Camry with 50/100/50 plan, it will cost you $204 per month Total Ownership Cost: 3-year Loan = $836/month 4-year Loan = $688/month 5-year Loan = $603/month 6-year Loan = $547/month

BudgetBudget The typical budget allows 19% of gross income to be spent on transportation expenses (car payments, fuel, insurance) Annual Totals: 3-Year Loan = $9655 = $51k income 4-Year Loan = $7856 = $42k income 5-Year Loan = $6860 = $36k income 6-Year Loan = $6181 = $33k income

Why Insurance is Important

Deal…or No Deal… Set yourself a time limit (at most, 30 minutes) Don’t play the “I have to talk to the manager about this” game Go in with a general idea of what you want to spend (about 5- 8% over invoice is the best possible deal) Never negotiate on an empty stomach Any dealership charging MSRP does not deserve your business

Deal…or No Deal… If you have made an offer, don’t budge from it Negotiate from dealer cost up…not MSRP down Don’t buy based on the “payment” that you will make each month If you leave a deposit, put it on a credit card – that way you can cancel the charge if the deal goes south

Deal…or No Deal… Do not buy a car on impulse! Impulse buyer = VICTIM There is no 3-day “cooling off” period – the 3- day laws apply typically to health clubs and door-to-door sales Negotiate each part of the deal separately – trade-in, new car price, financing (if you choose to go with that)

Deal…or No Deal… Generally speaking, extended warranties are NOT WORTH THE PRICE on a new car