Buying A Car Precalculus

How to Buy A Car Research – Needs/Wants – Reliability – Safety Used Car Buying – Dealer or Individual New Car Buying – Finance – Lease – Cash 2

What do you want? Afford? Appearance Reliability Cost of Maintenance Gas Mileage Ability to impress my friends Cheapest price Safety Make of car (Toyota) Everything MUST work all the time Easy to park, learn to drive, etc. Lower anxiety about vandalism, theft, etc. 3

Generalizations 4 Japanese cars RUST but are typically more dependable. Repairs sometimes expensive. European cars are well designed but expensive to repair, more complicated. Complicated electrical systems are their death knoll. Motors and bodies last forever. American cars have numerous annoying faults, are not as well designed, but parts and repairs are readily available. These cars are usually more practical in design, and there are several that stand out as very reliable.

The Truth about “Economy Cars” Rank the following Cars: Which one costs $141 to replace the water pump? Which one costs $624 to replace the water pump? $46,000 MSRP $18,000 MSRP $10,000 MSRP $33,000 MSRP $322 $624! $545 $141!

Who would think that this car would have the most expensive repair ($624)? Of the cars on the previous page, the Acura would have the highest rating for $545 to replace the water pump…you might want to think again about purchasing one! And who would think that you could replace a water pump on a $46,000 Cadillac for under $150?

Economy vs. Reliability 7 Economy – Bottom Line - How much $ is car to run? MPG Reliability – How often does car break? – A car considered reliable isn’t necessarily the cheapest to drive – Lower miles on a car do not necessarily mean less repairs

Example 8 If your car gets 20 mpg, gas costs $2.30/gallon and you work 30 miles away, how much will you spend on gas during your work week?

Anticipating Repairs 9 Tires Battery Exhaust Struts/Shocks ATF/Antifreeze change Timing Belt Repairs k: Alternator Water Pump Air Conditioning Automatic Transmission Repairs beyond 100k: Sometimes a car with 100k on it is cheaper to drive than a comparable vehicle with 60k on it

Why start with a cheaper car? Most new drivers are very nervous Nervous drivers make mistakes Mistakes cost $$$, raised insurance premiums for years to come ~Thus, a cheaper car may help you have less anxiety about driving and save you $$$

Where To Start? Periodical Literature Web sites; Governmental, Complaint sites, Consumer Websites, Message Boards The advice of mechanics, friends, relatives Junk Yard – What newer models are in there? 11

For Example… This junkyard had 3 or 4 Mazda 626s in this condition…why are they there when they appear to be in great condition and only five to seven years old? BAD transmissions!

Periodicals Consumer Reports – Provides: Reliable Surveys/Research Which cars are the most dependable? What new laws or recalls will affect me? Complaints and Recommendations – Does NOT Provide: Costs of maintaining a vehicle Costs of typical repairs

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Periodicals The Car Book – Provides: Predicts maintenance costs and charts total costs of ownership including depreciation, etc. Summaries of replacement costs for major and minor components on popular vehicles Estimates the costs for preventative maintenance as prescribed by the manufacturers of the new cars Complaint charts Crash test results Depreciation (Use this in your favor…you can get a 3 year old car for 60% of its new price!)

The Car Book

Website Results Search Engine Lots of complaint web-sites, some profane and not legitimate Some helpful things Some commercial sites, designed to make money off all information they provide 18

Useful Websites

Used Car Buying Benefits – $$ Drawbacks – No warranty – Reduced lifetime use of vehicle – Limited ability to determine previous care of vehicle 20

Used Car Buying Look at the dipstick (does it have enough oil?) and the engine (clean?) Ask if there’s an owner’s manual Ask if there are maintenance records or warranties Try everything (locks, windows, air conditioning, stereo) Is it generally clean inside and out Was it JUST started before I arrived?

New Car Buying Benefits – New car smell – Unused/unmolested – As close to mechanically/aesthetically perfect as will ever be Drawbacks – $$ – Buying Experience 22

Things to do… Walk away… THINK about it and take another look at your budget Test drive the car (Hwy & backroads) Have an unrelated auto shop do a “new car assessment” ($30-75) Research the car’s history on carfax.com or similar site (has it been stolen, wrecked?) Look up it’s worth to compare to price on Kelly Blue Book

I LOVE This One! Before you get emotionally carried away, consider the following… – What is the monthly payment? – For how many months? (You should get the shortest term that you can afford the monthly payments on.) – Did I ask them or figure out for myself how much I’d be paying for the car in the end? – Did I ask how much MORE over the price, tax and licensing will cost me? – Am I feeling pressured? – How’s the mileage for the age of the vehicle? Typical is 10,000 miles a year.

Make an Offer Let them know you’ve done your research Use your “new car assessment” results to “talk ‘em down” Offer about 10% lower than you’re willing to pay (so you have room to negotiate)

It’s a Done Deal Sign the papers Get the title (store at home in safe place) Get insurance (BEFORE driving home!) Go to Licensing location and get it registered (may need Emissions test) Keep insurance info and registration in glove compartment Keep maintenance paperwork so YOU have it when time comes to sell

Installment Buying (Financing) If you need to buy an expensive item, some companies let you to purchase it, and pay for it over a period of months and/or years. Sometimes they charge interest (APR) If 0% APR, there is limited downside to financing a purchase. Just make sure you make all of the payments on time! 27