Buying a Car
Objectives Students will: be able to find a car that fits your needs. be able to decide whether a new or used car is right for you. decide whether buying or leasing is right for you. Understand the hidden costs of operation and maintenance.
Do Now: Is it better to buy or lease a car? Why or why not? Support your answer.
Buy Vs. Lease Own the vehicle Monthly payments are usually higher Early termination: you can sell or trade your car at any time Free to drive as many miles as you want Don’t own the vehicle Monthly payments are always lower If you end the lease early, early- termination charges Most leases limit the number of miles you drive to 12,000 or 15,000 per year
Leasing Vs. Buying Leasing might be a good option if: If you want a new car and you plan on driving it only for a couple of years: Can get a car with little or no money down. Can help you get a more expensive car than you might otherwise be able to afford. Buying a Car: A 20% down payment is recommended You will probably pay off the loan before the car stops working At the end of your lease you have the option of buying out the car, but overall it will cost you more money than purchasing the car flat out.
Which Car is Right for You? Want Good Gas Mileage: smaller car Do you carry many passengers? Larger car
New or Used? New cars can cost you a lot more without offering much value. Over the first two years, a new car loses 30% of its resale value Offer a warranty and certain peace of mind that used cars cannot offer. New cars you can get exactly what you want. Used cars look like a better option. However, cars can break down after they are purchased Solution: car dealers offer certified pre- owned programs to combat this problem and to ensure the quality of their used cars.
What can I Afford? Need verse Wants Coupe: is a small car with two doors and two main seats: saves on gas SUVs: have multiple rows of seating Minivan: provides even more room Sedan: very popular, offers two rows of seats, and a spacious trunk
Insurance No-fault auto Insurance : the driver’s insurance will pay to fix the damage of his or her car even if the driver wasn’t faulted for the accident. (not in every state) Liability Insurance Covers the cost of any damages you cause to other drivers, but does not pay to fix your car if the accident is your fault. Required by law Collision Insurance : pays to fix the damages to your own car if the accident is your fault. Optional
Where to Go to Find a Car Magazine like Consumer Reports, Car and Driver, and Road and Track offer expert opinions and test-drive reviews. Used cars: Kelley Blue Book Will help determine the value of a particular make and model and offer advice on how to deduct for any damages caused by the previous owner
What Lenders look for? Steady Income: Established Residence: Established Employment: Credit History:
Operation and Maintenance Gas: the size of your car will greatly affect how much you have to spend on gas If you have a long commute, you should look for a car that is fuel efficient. Other costs: Parking Oil Changes Repairs Tire Replacement
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Video Main Idea What did you learn from this video? Write down what you learned and hand it in at the end of the class.