1. Selling & Buying a Car

2. What to know? How much can you spend every month?
What are Benefits to new, used & leases?
Should I Buy or lease?
Do I have a Down payment or Trade-In?
What is the current Interest Rates?
What is the current Sales Tax?
Am I driving for Style, Comfort, Family?

5. Buying a Car: Starts with what you currently have!!!

6. Car Ownership Importance to your future?
You need to drive (maybe not)- big city
You need insurance to drive
Not knowing can leave you vulnerable

7. Credit/Loan How could buying a car help your credit?
Types of Credit: 10% of score
Installment Plan: Monthly Payments prove you are trustworthy
Where do you get a car loan?

8. Prior to Buying Options:
1. Down payment- Cash you put down for a car. Lowers payments & banks like.
2. Trade-In- Provide dealer with your current car and they buy it off you.
3. Combination of both
4. Neither

9. Downpayment Cash you have to pay for car.
This lowers the principal (amount you owe)
Example: $20,000 with $5,000 down = $15,000 Loan
You do not need a down payment

10. Selling your Car Trade-in Dealer buys your car off you
Reminder: They are trying to make money off you.
Goes for down payment on next car
Typically dealers Offer you less but much easier
Benefit for buying cars- turn one in

11. Selling Your Car Private Party Sale- Sell by yourself
Cars.com, craigslist, put a sign on car
Costs of advertisement and title
Will get more money off sale

12. What is my cars Value? Cars.com, nada.com, edmunds
Kelly blue book (kbb.com)
An advantage to owning your car

13. Go to Kbb.com Students start project after instruction

14. Depreciation
Loan-Calculators/Car-Depreciation-Calculator/
Depreciation - Cars lose value once you drive them
20% to drive new car off the lot, that is $6-8,000 off a $22,000 and $10-12,000 off $40,000 car, it is more like 35%
65% in first 5 years

15. Consumer Reports Some models depreciate slower
Total a car in crash- only covers the principal, not interest.
So if you crash a new car early, you will have paid more in interest than later

16. Are cars a good investment?
No- not a good investment
Get you from point A-B
Include maintenance, oil, tires, interest, insurance could mean $$$ every year
It is an asset that keeps going down in value and becomes less reliable

17. How to minimize depreciation?
Buy slightly used cars 1-3 years
Still have warranties, minimal miles
If you buy new, keep it for a long time
Stay on top of maintenance, cars can last 200,000 miles
Buy older cars, less depreciation but old car and more likely to have problems

18. Financing Car (buy) 24, 36, 48, 60, 72 months
Loan by bank or dealer- check this out interest rate higher can cost you
More months = less monthly payments
More months = more interest

19. Financing
Know the APR- Annual Percentage Rate- the interest rate on the loan
The lower the APR- the cheaper the car
Default- Failure to make payments on the car. Results in repossession of car.

20. Use Bankrate to see costs of loan
calculator.aspx
Change the payment options
Change interest rates

21. 3 yr. 15,000 loan `

22. 4yr. 15,000 loan

23. Leasing vs. Buying Buying- pay for the car and you own it
Leasing- is payment for use of car but will turn back to dealer after several months

24. Leasing Terms
Lease- long term rental and allows specific period of time and mileage.
Mileage limit- The max distance a vehicle can be driven during a lease
Excess Mileage charges- Penalty at end of lease if vehicle went over mileage limit
Early Termination Fee- Penalty paid for withdrawing or ending a lease early

25. Leasing Terms cont...
Lease Payment- The amount you pay every month for the lease of a car.
Lessee- The person leasing (driving) the car
Lessor- The company (true owner) of the car, who you pay
Term- The length of the lease. 24,36 etc..

26. Reasons to Lease New car every 2-3 years Lower monthly payments
Car under warranty or dealer protection
Don’t like buying or selling car
Don’t drive a lot of miles per week
Will pay more over the long haul.

28. Leasing Payments Depreciation charge goes to dealer- depreciation
Finance charge added to payment to cover
Dealer gets the car back- you don’t get anything

29. Reasons to Buy Don’t mind higher payments
Like having trade in and resale value
Prefer to be equity free after done with payments
Don’t mind unexpected breakdowns
Drive many miles
Unexpected future

30. Buy Used or New
Used Good: Depreciation, Resale, Drive a lot, lower payments than new
Used Bad: Breakdowns you pay
New Good: Less mechanical issues, warranty, Style, Drive a lot
New Bad: Depreciation, higher payments

31. Buy Terms
Sticker Price- The price on the sticker of the car. Cars should always be bought below sticker unless brand new
MSRP- Manufactures Suggested Retail. The suggested base sale price.

32. Payments Principal- Amount the car costs (sticker price)
Interest- The amount to finance the car
Monthly Payment- Principal and interest. Paying for car and the loan.

33. Certified Pre-Owned
CPO- Certified Pre-Owned- means dealer did inspection on car and passed test.

34. Incentives to Buy
Rebates- Money off car sale prices money off the MSRP- Manufactured sticker retail price
Little or no interest (finance)
0% financing- Pay no interest

35. Warranty
Warranty: New cars usually have 3-5 years for major breakdowns. Bumper to Bumper.
Tires, Wipers, dents etc... not covered
Extended- Dealerships offer extensions to these. Have to do math to see if worth it.
What do they cover? Transmission, engine- these can be expensive to fix.

36. Decisions? Choose based on personal preferences Gas Mileage
Resale and length you will have
Family or Single? Passengers? Safety?
Looks, style

37. Buying Used Never offer full price. Used car prices are negotiated.
Make sure to print off Kelly blue book sticker price and look at other similar cars before you accept any offer.

38. Car Account It is easier to plan for the maintenance.
Make sure you have $ in account
If you don’t pay they repo the car, make sure you can pay.

39. MPG - Miles Per Gallon City - Start and stop causes worse mileage
Highway - Better mileage
SUV and trucks worse than car
Electric cars-

40. Other costs Insurance (Average $400 per half) Sales tax Tires
Oil changes
Wipers and other broken parts