1. “Everything in life is somewhere else, and you get there in a car” - EB White Copyright © eNestEgg Press, LLC.

2. Learning Objectives Determining if you need a car Determining the type of vehicle to purchase New or Used?/Lease or Own? How will I pay for the car? How to make your car last Copyright © eNestEgg Press, LLC.

3. Need Recognition Step 1: Realizing that you need a car is the first step toward purchasing one. Be careful when you make the decision that you need a car. Sometimes the problem is not that you need to purchase a car, but rather that you need transportation. For instance many people who live in high density urban areas can be well served by public transportation. The average cost of NYC monthly parking is around $430. Many young people attending university do not need a vehicle, at least at first. Keep in mind: depreciation, gas, maintenance, and insurance. It costs an average of $8,876 annually to own and drive a typical sedan. Copyright © eNestEgg Press, LLC.

4. Information Search Step 2: Determining the type of vehicle you should purchase. Think about: What's your lifestyle like? If you have or plan to have children soon for instance you will likely want a car that seats at least four people, and probably wont want a two door vehicle. What car fits you? What car fits your budget? Make sure you can actually afford the car you plan to buy. Vehicle Recommendation Tool (Source: Carmax.com) Vehicle Recommendation Tool What’s the Right New Vehicle for Me? (Source: Carand driver.com) What’s the Right New Vehicle for Me? 5 Smart Resources to Get the Right Car at the Right Price (Source: Business Time) 5 Smart Resources to Get the Right Car at the Right Price Copyright © eNestEgg Press, LLC.

5. Evaluate Alternatives New vs. Used: There are advantages to each: New- Latest Styles and features Able to get exactly what you want May be more reliable Used- Used cars tend to be less expensive Even secondary expenses like insurance and registration fees tend to be less. If you do buy used get it inspected by an outside mechanic before you make the purchase. On average, a new car loses 11% of its value just being driven off the lot, you can find recent model car for substantially less just buying used. The True Cost of a New Car (Source: YouTube) The True Cost of a New Car Copyright © eNestEgg Press, LLC.

6. Evaluate Alternatives Buy or Lease: When you lease a car, you pay monthly payments for a period of time for the use of a car. You are essentially renting a car. Therefore you only pay for the use or depreciation of the car for that time period. At the end of the lease you may either purchase the vehicle or return it to the leasing company. Is It Cheaper to Buy or Lease a Car? (Source: YouTube) Is It Cheaper to Buy or Lease a Car? Copyright © eNestEgg Press, LLC.

7. Buy or Lease? Leasing Advantages: Lower monthly payments than buying. Requires little or no down payment. May enable you to obtain a more expensive or newer car more often, as the payments are lower. Leasing Disadvantages: No ownership interest. Must meet requirements. May have additional costs for extra mileage, turning the car in early, or for certain repairs. Insurers usually charge higher coverage costs for leased vehicles. You essentially pay for the most expensive years of a vehicle's life instead of the dealer, and will ways have a car payment as long as you lease. Copyright © eNestEgg Press, LLC.

8. Buy or Lease? Buying Advantages: Eventual ownership, freeing you from payments. After the vehicle is paid off, you're free to sell it at any time. No mileage limits. You're free to modify and/or accessorize. Insurance costs are generally lower than leased vehicles. Buying Disadvantages: Monthly payments are higher than those of a leased vehicle. Large down payments are generally required. Depreciation, cars lose their value very quickly. Copyright © eNestEgg Press, LLC.

9. Terms to Know Capitalized Cost: the price of the vehicle. Money Factor: the interest rate you are paying on the Capitalized Cost. The Payment Schedule: the monthly payment and the amount of monthly payments. The Residual Value: how much the leased vehicle is worth at the end of the lease. At the end of the lease you may either return, keep, or sell the vehicle. Current Market Vehicle > Residual Value: You can sell for profit! Current Market Value< Residual Value: Return it! Copyright © eNestEgg Press, LLC.

10. Question Cluster 1 Copyright © eNestEgg Press, LLC.

11. Financing a Car Step 3: The next step to purchasing a car is determining how to finance it. Buying a vehicle is a hefty purchase, most people cannot pay for vehicle with cash, therefore they take out an auto loan. There are several different ways to finance a car: Dealership Bank or Credit Union Online financial institution Home equity loan Family member or friend Copyright © eNestEgg Press, LLC.

12. Financing a Car Dealership Pros: Convenient Fast Cons: High pressure Usually not competitive Generally try to pressure you into add-ons Loans are often front-loaded: Payments are made up of more interest in the beginning of the loan than toward the end, this is bad if you might pay the loan off early. Copyright © eNestEgg Press, LLC.

13. Financing a car Bank or credit union: Bank Pros: Competitive rates Personal service No sales pitch for add-ons Often provide free life insurance or disability insurance with loans Loans are usually simple interest loans: Interest is spread evenly throughout the term of the loan. Cons: Not as convenient as dealership financing. Can not be set up at night or on the weekend. Copyright © eNestEgg Press, LLC.

14. Financing a car Online financial institution Pros: Usually competitive rates Quick & Easy Cons: Not a personal service Dealing with an unknown You must watch out for scams Copyright © eNestEgg Press, LLC.

15. Financing a car Home equity loan: Pros: Some interest is tax deductibletax Competitive rates Cons: May be risky as you are tying your car to your home Family member or friend: Pros: Personal service Easy Sometimes flexible Usually competitive rates Cons: Could jeopardize a relationship Copyright © eNestEgg Press, LLC.

16. Question Cluster 2 Copyright © eNestEgg Press, LLC.

17. Getting the Best Price Car Salesman are professional hagglers. They will use many techniques to rope you in. 25 Tricks They Use to Charge You More (Source: Toolbox.com) 25 Tricks They Use to Charge You More When purchasing a car, the best tactic is to come completely prepared: Test drive the vehicle you want. Determine the specs you want. Contact as many dealers as you can to get the best deal possible. The internet is your friend. Copyright © eNestEgg Press, LLC.

18. Using the internet The internet is the greatest resource you now have at your disposal. No salesman You can take your time, no pressure to make a purchase right away. Ability to scan numerous dealerships within minutes. Easy to do comparative shopping, giving you more price, make, model, and color options. Less time spent haggling over price. Can be used to research, or buy the car directly (Ebay). About E-haggling (Source: Chicago Tribune) About E-haggling Online used-car pricing: where the haggling begins (Source: Bankrate.com) Online used-car pricing: where the haggling begins Copyright © eNestEgg Press, LLC.

19. Operating Costs Your purchasing isn't finished when you pay that car off. There are many costs connected to owning and maintain a vehicle. Use this calculator to estimate Copyright © eNestEgg Press, LLC.

20. Operating costs Fixed Costs- These costs will normally stay the same month to month. Interest on loan Insurance License, registration and taxes Depreciation: Your car’s lose value. A new car can lose up to 20% its value when its driven off the lot. What is the Average Car Depreciation Rate? (Source: Cardirect.com) What is the Average Car Depreciation Rate? Copyright © eNestEgg Press, LLC.

21. Insurance Keeping your vehicle insured will be a large part of your auto operating costs, especially for new drivers. There are several ways to keep the costs low: Have a good driving record Taking a higher deductible Selecting a certain type of car A modest sedan will be less than a high performance sports car. Shop around. The internet is your friend. Putting in just a little bit of time can save you big bucks in the long run. Copyright © eNestEgg Press, LLC.

22. Costs of owning a vehicle Variable Costs- Fluctuate depending on amount and type of use. Gas and oil Tires Maintenance Repairs Parking and tolls Copyright © eNestEgg Press, LLC.

23. Maintaining Its crucial that you keep up with your maintenance. The true cost of not maintain your car (Source: Bankrate.com) The true cost of not maintain your car Know Your Basic Car Care (Source: DMV.org) Know Your Basic Car Care Watch out for unscrupulous businesses Auto repair scams (Source: Insurnancefraud.com) Auto repair scams Copyright © eNestEgg Press, LLC.

24. Car Warranties A warranty is a written guarantee from the maker or seller of a product that promises to replace or repair the product if something goes wrong. Many vehicles come with a type of warranty when purchased. You will often be offered an extended warranty as well. Extended car warranties: An expensive gamble (Source: Consumer Report) Extended car warranties: An expensive gamble Copyright © eNestEgg Press, LLC.

25. Question Cluster 3 Copyright © eNestEgg Press, LLC.