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Money Management.

Published byErin McCoy Modified over 6 years ago

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Presentation on theme: "Money Management."— Presentation transcript:

1 Money Management

2 Student Learning Objective
Prioritize financial decisions by systematically considering alternatives and possible consequences

3 Public Transportation
The use of public transportation saves energy and other resources. The use of public transportation may also yield cost savings. e.g. Price of the train or bus ticket Not on time Price of train ticket or bus fare is usually fixed

4 Transportation Choices Public Transportation
Urban transportation Mass transit Commuter service

5 Transportation Choices Public Transportation
Between cities Amtrak Bus

6 Private Transportation
Car Bicycles Motorcycles Scooters

7 Transportation Choices Private Transportation
Motorcycle / scooter

8 Transportation Choices Private Transportation
Bicycle

9 Advantages of Cars Immeadiately Available
Get to your destination in comfort

10 Disadvantages of Cars Purchase Price Maintenance
Interest on the car loan Car Insurance Fuel Costs Registration Taxes

11 Transportation Choices Private Transportation
Car / truck

12 > Private Transportation Buying a Car
Narrow choice as to type of car

13 Private Transportation Buying a Car
Narrow choice as to type of car Luxury / sports

14 Private Transportation Buying a Car
Narrow choice as to type of car Luxury / sports SUV / pickup truck

15 Private Transportation Buying a Car
Narrow choice as to type of car Luxury / sports SUV / pickup truck Full-size (not very popular; gas guzzlers)

16 Private Transportation Buying a Car
Narrow choice as to type of car Luxury / sports SUV / pickup truck Full-size Mid-size

17 Private Transportation Buying a Car
Narrow choice as to type of car Luxury / sports SUV / pickup truck Full-size Mid-size Compact / mini

18 Type of Cars Subcompact Compact Hybrid Electric Sport Cars SUV

19 Private Transportation Buying a Car
Narrow choice as to type of car Luxury / sports SUV / pickup truck Full-size Mid-size Compact / mini Hybrid (gas / electric)

20 Used Car Used Car Lot Dealership CarMax Craigslist Newspaper Ads
Rental Car Companies

21 Private Transportation Buying a Used Car
Where to look Private owner (newspaper) New-car dealer Banks / finance (repo) Rental-car agency Used-car dealer Online

22 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Buying MY Car! Price $6,500

23 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Sales tax (most states) Buying MY Car! Price $6,500 Taxes (6%) $390

24 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Sales tax License / registration Buying MY Car! Price $6,500 Taxes (6%) $390 License / Reg $125

25 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Sales tax License / registration Total borrowed Buying MY Car! Price $6,500 Taxes (6%) $390 License / Reg $125 Subtotal $7,015

26 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Sales tax License / registration Total borrowed Finance charge Buying MY Car! Price $6,500 Taxes (6%) $390 License / Reg $125 Subtotal $7,015 Finance (8.5%/3yrs) $596

27 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Sales tax License / registration Total borrowed Finance charge Total loan Buying MY Car! Price $6,500 Taxes (6%) $390 License / Reg $125 Subtotal $7,015 Finance (8.5%/3yrs) $596 Total $7,611

28 Finance Costs Bank Credit Union Finance Company Dealership

29 Private Transportation Buying a New Car
Financing a new car Loans (bank, credit union, finance company, or dealer) Length of loan Cosigner

30 Private Transportation Buying a Car
Estimate cost to buy car Purchase price Sales tax License / registration Total borrowed Finance charge Total loan Monthly payment Buying MY Car! Price $6,500 Taxes (6%) $390 License / Reg $125 Subtotal $7,015 Finance (8.5%/3yrs) $596 Total $7,972 Monthly pay $211.42

31 Private Transportation Buying a Car
Estimate cost to maintain car Monthly payment Buying MY Car! Monthly pay $211.42

32 Auto Insurance Progressive Geico Allstate

33 Private Transportation Buying a Car
Estimate cost to maintain car Monthly payment Insurance Buying MY Car! Monthly pay $211.42 Insurance $175.12

34 Fuel Costs Type of gas required MPG

35 Private Transportation Buying a Car
Estimate cost to maintain car Monthly payment Insurance Gas Buying MY Car! Monthly pay $211.42 Insurance $175.12 Gas $175.00

36 Maintenance Costs New vs. Old Small Car vs. SUV Foreign or Domestic

37 Private Transportation Buying a Car
Estimate cost to maintain car Monthly payment Insurance Gas Maintenance (oil, car wash, etc.) Buying MY Car! Monthly pay $211.42 Insurance $175.12 Gas $175.00 Maintenance $25.00

38 Private Transportation Buying a Car
Estimate cost to maintain car Monthly payment Insurance Gas Maintenance Monthly subtotal Buying MY Car! Monthly pay $211.42 Insurance $175.12 Gas $175.00 Maintenance $25.00 Subtotal $586.54

39 Private Transportation Buying a Car
Estimate cost to maintain car Monthly payment Insurance Gas Maintenance Monthly subtotal Emergencies (car repairs, etc.) Buying MY Car! Monthly pay $211.42 Insurance $175.12 Gas $175.00 Maintenance $25.00 Subtotal $586.54 Emergencies $????

40 Which of the following costs of buying a car is not ongoing?
Purchase price Insurance Gas Maintenance License / registration

41 Which of the following costs of buying a car is not ongoing?
Purchase price Insurance Gas Maintenance License / registration

42 Private Transportation Buying a Used Car
Shopping for a used car Blue Book Depreciation Warranty Used-Car Rule

43 Warranties New Car Used Car

44 Private Transportation Buying a New Car
Warranty Extended “Lemon” laws

45 Private Transportation Buying a New Car
Invoice / sticker price Never pay sticker Research pricing online at Edmunds.com Exception “ordering car”

46 Private Transportation Buying a New Car
Trade-in NADA Kelley Blue Book Dealer will give you less, but less hassle

47 What do you think? Discussion
Do you think it is better to trade your car in to the dealer or to sell it on your own? What kinds of problems are there with selling a used car on your own? Should you accept someone’s personal check for your car? Why? What should you look for when buying a used car? © EMC Publishing, LLC © EMC Publishing, LLC

48 Private Transportation Buying a Used Car
What to look for Exterior Interior Test drive VIN report Mechanic evaluation Clear title

49 Leasing or Buying If you want to drive a newer car but do not have the necessary down payment to buy it, then you may decide to lease. If you plan to drive the same car for more than a few years, you will save money in the end by purchasing your car.

50 Advantages of Leasing You can drive a new or nearly new car with a lower down payment than if you purchased the same car Your payments are lower than if you purchase a car. You are not paying for the whole life of the car, just for the time of the lease period. Often the dealer will provide an excellent service package to be sure the car stays in good condition for resale at the end of your lease. At the end of the lease you just give back the car to the dealer.

51 Private Transportation Leasing a New Car
Advantages of lease New car Payments usually lower Service included (usually) Many dealers quit leasing (Chrysler 2008)

52 Disadvantages of Leasing
You do not own the car. At the end of the lease, you have nothing to show for the money you have paid. You may have to pay a security deposit and other fees at the beginning of the lease. If you drive more miles than specified in the lease, you will have to pay an extra fee. Your insurance costs might be greater because the dealer could require you to carry a higher level of coverage.

53 Private Transportation Leasing a New Car
Disadvantages of lease Don’t own (no equity) Pay security deposit Limited mileage Insurance costs Always have car payment Can buy car at end of lease

54 Continued You will always have a car payment. People who buy a car and pay off the loan can drive for years without making any car payments. If you want to end the lease early, you will probably have to pay a significant penalty. You can buy the car at the end of the lease period, but you will pay much more than if you had purchased the car in the first place.

55 Links Consumer Reports NYT

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