Researching an Automobile FEFE 6.02 Researching Automobiles Researching an Automobile What should I look for? Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Transportation Part of everyone’s life 15 – 20% of an individual’s budget Automobile is the 2nd most expensive purchase, only after a home Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Want to Buy a Vehicle? Consumers should plan their vehicle purchase to avoid any costly mistakes Any large purchases should be planned Places to purchase a vehicle: Dealership, private owner, internet Instructors: Long, Garrett, Hubbard, Roberts, Torain

Planned Buying Process FEFE 6.02 Researching Automobiles Planned Buying Process Prioritizing wants Pre-shopping research Fitting the budget Comparison shopping Negotiating Making the decision Evaluating the decision Instructors: Long, Garrett, Hubbard, Roberts, Torain

Step 1 - Prioritizing Wants FEFE 6.02 Researching Automobiles Step 1 - Prioritizing Wants Assess transportation needs and wants Need: something thought to be a necessity Want: something unnecessary but desired Consider all automobile options as wants Prioritize the wants from low to high priority Prioritizing wants helps the consumer Consider costs and benefits of different vehicle options Consider the “big picture” of the vehicle purchase rather than a specific want (such as heated seats, color, engine size, etc) Instructors: Long, Garrett, Hubbard, Roberts, Torain

Prioritizing Wants – Questions to Think About FEFE 6.02 Researching Automobiles Prioritizing Wants – Questions to Think About How will the vehicle be used? Where will the buyer be living? How will the vehicle be stored or parked? How much will it be driven? What options would the buyer like in the vehicle? Instructors: Long, Garrett, Hubbard, Roberts, Torain

Step 2 – Pre-shopping Research FEFE 6.02 Researching Automobiles Step 2 – Pre-shopping Research Research should be based on transportation wants Complete this before visiting a car dealership or salesman Helps the buyer to be informed about: What they are looking for Vehicles in their price range Available options Instructors: Long, Garrett, Hubbard, Roberts, Torain

Ways to Perform the Research FEFE 6.02 Researching Automobiles Ways to Perform the Research Family & friends Experiences with different makes and models of different vehicles Likes, dislikes, and recommendations Periodicals Consumer Reports Federal Citizen Information Center Kelley Blue Book Motor Trend Car and Driver Access this information at the public library and/or the internet Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Price Research Price Base price: vehicle price with standard equipment, no extra options MSRP: Manufacturer’s suggested retail price Includes base price, price of options installed by manufacturer, and their transportation charge Sticker Price Dealer’s initial asking price Instructors: Long, Garrett, Hubbard, Roberts, Torain

Price Research continued FEFE 6.02 Researching Automobiles Price Research continued Price continued Determine how much a dealer paid to help decide which vehicles to consider and to negotiate a fair price Consumer Reports, Kiplinger’s Personal Finance magazine, and Edmund’s New Car Prices Used cars Blue book price: dollar value given to the vehicle based on its year and model Used as a guide for car dealers and banks for pricing trade-ins Kelley Blue Book Instructors: Long, Garrett, Hubbard, Roberts, Torain

Vehicle Options Research FEFE 6.02 Researching Automobiles Vehicle Options Research General type of vehicle Car, truck, 2-door, SUV, sporty Make and model Ford Taurus, Honda Accord Safety Braking and emergency handling, airbags Reliability Some specific models have high marks, may be higher priced but will save on repair costs Instructors: Long, Garrett, Hubbard, Roberts, Torain

Vehicle Options Research continued FEFE 6.02 Researching Automobiles Vehicle Options Research continued Fuel economy Type of gas used, gas mileage Power and performance Driving on highways, steep hills, mountains, snow, muddy roads, or in a city Comfort and convenience Size of headroom and legroom, cargo space Instructors: Long, Garrett, Hubbard, Roberts, Torain

Vehicle Options Research continued FEFE 6.02 Researching Automobiles Vehicle Options Research continued Insurance Chosen vehicle affects the price of insurance; obtain a quote for the vehicles being considered Other options Power steering and brakes, manual or automatic, air conditioner, rear-window defogger, radio/tape/CD player, type of tires, cruise control, sun roof, heated seats, power door locks and windows, etc. Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles New vs. Used Research New Vehicle: Not pre-owned Warranty Manufacturer options Wide selection Expensive Depreciation Loss in the vehicle’s value due to time and use (greatest cost) Used Vehicle: Cost less to buy Cost less to insure Avoid rapid deprecation Wide selection May offer warranty Returned leased cars Have an independent mechanic inspect any used car before purchase Instructors: Long, Garrett, Hubbard, Roberts, Torain

Step 3 – Fitting the Budget FEFE 6.02 Researching Automobiles Step 3 – Fitting the Budget “Can I afford it?” Most important question Amount the buyer can afford in his/her budget dictates the vehicle price All costs must be taken into consideration before choosing a vehicle Instructors: Long, Garrett, Hubbard, Roberts, Torain

Fitting the Budget continued FEFE 6.02 Researching Automobiles Fitting the Budget continued *Vehicle price is not the only cost involved Fixed expenses Depreciation Insurance costs Loan payment and interest if financed Parking fees Licensing Registration Flexible expenses Maintenance Gas Oil Repairs Instructors: Long, Garrett, Hubbard, Roberts, Torain

Stop to complete activity FEFE 6.02 Researching Automobiles Stop to complete activity Instructors: Long, Garrett, Hubbard, Roberts, Torain

Step 4 – Comparison Shopping FEFE 6.02 Researching Automobiles Step 4 – Comparison Shopping Comparing services or products to determine the best buy or quality product at a fair price Allows the consumer to build upon the information learned in the pre-shopping research *As the price of a vehicle increases, consumers are often not buying additional safety, capacity, or power, but instead style and prestige Instructors: Long, Garrett, Hubbard, Roberts, Torain

Comparison Shopping continued FEFE 6.02 Researching Automobiles Comparison Shopping continued Narrow the choices to a few specific makes and models with desired options Visit the appropriate store to learn more information about each choice to make comparisons Inquire about price, dealer incentives, financing options, leasing, warranties, and service contracts Test drive each potential vehicle Instructors: Long, Garrett, Hubbard, Roberts, Torain

Comparison Shopping continued FEFE 6.02 Researching Automobiles Comparison Shopping continued Goal of comparison shopping Narrow the choice even further to negotiate for the best deal Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Step 5 - Negotiating Process of deciding the actual terms of the purchase and agreement between the seller and buyer Obtain a firm price before discussing any other aspects including a trade-in Compare prices from different dealers Let them know you have done your research and whether their price is high Instructors: Long, Garrett, Hubbard, Roberts, Torain

Negotiating continued FEFE 6.02 Researching Automobiles Negotiating continued Keys to all negotiations Be able to say NO Take the purchase to another business Instructors: Long, Garrett, Hubbard, Roberts, Torain

Step 6 – Making the Decision FEFE 6.02 Researching Automobiles Step 6 – Making the Decision The best place to decide on which vehicle to purchase is NOT the showroom where you are around the dealer Take the information home to compare all options After making the decision, return to the dealer to close the sale Instructors: Long, Garrett, Hubbard, Roberts, Torain

Step 7 – Evaluating the Decision FEFE 6.02 Researching Automobiles Step 7 – Evaluating the Decision Think about the things which went well and what did not This will be helpful the next time a similar purchase is made If the process was successful and you are happy, compliment the seller If you have a complaint, make the complaint known to the seller then move to the supervisor if necessary Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Lemon Laws Lemon A vehicle in and out of the repair shop with problems monthly An estimated new 150,000 vehicles sold each year are lemons. Money Troubles, 2001, Leonard All states have enacted lemon laws Specifics vary state-to-state and are in place to protect consumers Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Lemon Laws continued To fall under the lemon law New vehicle must have a substantial defect which cannot be fixed in a reasonable time Defect remains unfixed after four repair attempts or the vehicle remains in the repair shop for a total of 30 days This allows the consumer the right to a refund or a new vehicle Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Lemon Laws continued What should you do if you feel you have purchased a lemon? Contact the state’s attorney general office to request information on the state’s lemon laws and how to use them if they have purchased a lemon Instructors: Long, Garrett, Hubbard, Roberts, Torain

FEFE 6.02 Researching Automobiles Conclusion Before purchasing a vehicle, follow the planned buying process to avoid a costly mistake Prioritize wants Pre-shopping research Fit the budget Comparison shop Negotiate Make the decision Evaluate the decision Instructors: Long, Garrett, Hubbard, Roberts, Torain