Acquiring a Vehicle Section 16.1

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Section 16.1 Acquiring a Vehicle Section 16.2 Motor Vehicle Insurance 16 Chapter Owning a Vehicle

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle 16.1 Laws of Ownership The Uniform Commercial Code Consumer protection laws Laws regulating credit The law that applies to the purchase of a vehicle comes from several sources.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle One of the first steps in buying a car is to decide how much you can afford to pay. You can buy a car Financing a Vehicle With cash With credit

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Federal law requires lenders to disclose the finance charge and annual percentage rate (APR) to borrowers. Financing a Vehicle

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The finance charge is the cost of the loan in dollars and cents. The annual percentage rate (APR) is the true interest rate of the loan. Financing a Vehicle

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle 1.The exact price you’re paying for the vehicle 2.The amount you’re financing 3.The finance charge What You Should Know Before You Buy

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle 4.The APR 5.The number and amount of payments 6.The total sales price (the sum of the monthly payments plus the down payment) What You Should Know Before You Buy

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The advantages to leasing a new vehicle are: Leasing a New Vehicle Low down payment. Smaller monthly payments.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The disadvantages to leasing a new vehicle are: Leasing a New Vehicle Most expensive way to acquire a car. After making a lot of payments, you end up with nothing to trade in toward your next vehicle

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The Consumer Leasing Act is a federal law requiring businesses to tell you about all of the terms of a lease of personal property. Consumer Leasing Act

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle This information can be used to compare different leases or to compare the cost of leasing with the cost of buying. Consumer Leasing Act

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle A pre-owned vehicle may be purchased from: Leasing a New Vehicle A new car dealer A used car dealer A car rental company A private party Sometimes banks and loan companies

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle When selling a vehicle, a dealer Warranties Gives an implied warranty that the vehicle is merchantable (reasonably fit for the ordinary purposes), unless this warranty is excluded. Often gives a 30-, 60-, or 90-day guarantee.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The FTC’s Used Car Rule requires all used car dealers to place a large sticker, called a Buyer’s Guide, in the window of each used vehicle they offer for sale. The Used Car Rule

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The guide explains any specific warranty protection that is provided and also states whether there is The Used Car Rule No warranty, An “as is” warranty, or An implied warranty.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The advantage to buying from a private party is that the prices are lower, but there are disadvantages, as well. Buying from a Private Party No implied warranty of merchantability. No recourse if something goes wrong

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Another disadvantage is that the car might be stolen. In this case, a bank or loan company may have the right to repossess, or take back, the car, regardless of who presently owns it. Buying from a Private Party

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Before you buy from a private party, be sure to: Buying from a Private Party Test-drive the vehicle. Ask for the vehicle’s maintenance record. Talk to previous owners. Ask to see the certificate of title.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Advantages: Buying from Rental Companies Are usually only a year or two old Can be good buys Usually have had regular maintenance Come with warranties

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Disadvantages: Buying from Rental Companies Have probably had heavy use Have high mileage

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Under the UCC (Uniform Commercial Code), a contract for the sale of goods valued at $500 or more must be in writing to be enforceable. *the goal of substantial uniformity in commercial laws. *the goal of substantial uniformity in commercial laws. The Contract to Buy a Vehicle

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Such a standard-form contract is called an adhesion contract. Such a standard-form contract is called an adhesion contract. An adhesion contract is a standardized agreement. Adhesion contracts are on a "take it or leave it" basis. If you don't agree to the terms of the contract, you cannot acquire the products or services. Smart buyers read the small print and cross out items with which they disagree. The Contract to Buy a Vehicle

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle If you buy a car that continuously has mechanical problems, you should notify the seller immediately. What to Do if You Buy a Defective Car

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The seller can be asked to: What to Do if You Buy a Defective Car Fix the problem. Pay to have the vehicle fixed. Give you your money back.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Revoking the Acceptance If you buy a car that doesn’t conform to the contract, you may be able to revoke your acceptance, even after taking possession of the vehicle.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Revoking the Acceptance This revocation is allowed under the UCC if the defect is serious and undetectable. It must be made within a reasonable time after the defect is discovered.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Notifying the Seller about Defects Buyers must notify sellers of defects in vehicles within a reasonable time after the purchase. If you fail to do so, you may lose the right to recover.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle State Lemon Laws Many states have passed “lemon laws” to protect consumers when they buy defective vehicles, either new or used.

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle State Lemon Laws A “lemon” is defined in one state as “a substantially defective new car that has been at a dealer’s three times for the repair of the same defect or any combination of defects.”

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle The Federal Motor Vehicle Information and Cost Savings Act has established bumper standards for passenger vehicles. ( Reporting the right mileage for the correct condition of the car). The act also establishes average fuel economy standards. Federal Consumer Protection

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle It is illegal for a vehicle owner to turn back or disconnect the odometer, or mileage indicator, of a vehicle. Odometer Protection

Understanding Business and Personal Law Acquiring a Vehicle Section 16.1 Owning a Vehicle Many state laws require motor vehicle repair shops to be licensed and registered. Laws are being adopted in many states requiring: Repairing a Vehicle Repair estimates. Advanced disclosure of prices. Specific training for mechanics.