1. BUYING AND OWNING A VEHICLE
CHAPTER 17
BUYING AND OWNING A VEHICLE

2. BUYING AND OWNING A VEHICLE
CHAPTER 17
BUYING AND OWNING A VEHICLE
16.1 BUYING A VEHICLE
16.2 INSURING A VEHICLE
16.3 ENVIRONMENTAL CONCERNS

3. DO YOUR NEEDS REALLY JUSTIFY OWNING YOUR OWN CAR?
BUYING A VEHICLE
DO YOUR NEEDS REALLY JUSTIFY OWNING YOUR OWN CAR?

4. CAN YOU AFFORD IT? PURCHASE PRICE DEPRECIATION FINANCING
Vehicles value steadily drops over time
FINANCING
Shop around and look for best rate
OPERATING COSTS
Fuel, oil, tires repairs, replacement parts, licensing fees, registration, insurance, taxes, etc…..

5. WHAT KIND SHOULD YOU BUY?
What will it be used for?
Passengers, cargo?
How many miles?
Keep it how long?

6. VEHICLE SIZE
Smaller, lighter = better gas mileage but does not offer as much protection
Smaller = easier to maneuver
Larger = more comfortable but more costly
Larger = greater capacity for passengers

7. OTHER DECISIONS ENGINE TRANSMISSION OPTIONAL EQUIPTMENT
Smaller more fuel efficient
Larger more powerful for working
TRANSMISSION
Most automatic with overdrive
Manual last longer, harder to learn
OPTIONAL EQUIPTMENT
Technological advancements means lots of toys!

8. LEASING Cheaper than buying When lease is over you:
Return the vehicle and lease another
Purchase the vehicle at reciprical value
Return the vehicle with no obligations

9. BUYING USED VEHICLE
Buying from private owner may cost less but no warranty
Used car dealers usually have a better selection
Some now offer certified pre-owned warranties
Read warranty carefully
How much should you pay?
Kelley’s blue book

10. CHOOSING A USED VEHICLE
Make sure looks good and is in good mechanical condition
Need to know if it was ever involved in collision before
If possible talk to previous owner

11. OUTSIDE AND INSIDE CHECKS
Doors and locks
General appearance
Fluid leaks
Evidence of collision damage
Condition of seats
Lights and accessories
Mileage
Pedals & steering
Spare tire and jack
Hoses, belts, and fluids
Battery and cables

12. TEST DRIVE
Always test drive – make sure everything works and the car drives well.

13. HAVE VEHICLE INSPECTED
Take it to a trusted mechanic and have them inspect it.

14. INSURING THE VEHICLE Every state has financial responsibility laws.
Requires you to prove that you can pay for damage that you might cause

15. KINDS OF INSURANCE

16. LIABILITY INSURANCE Protects the driver who caused the collision.
Provides compensation for a harm or wrong to a third party

17. BODILY INJURY INSURANCE
Covers the driver who is at fault against claims
Claims for injuries to other people

18. PROPERTY DAMAGE INSURANCE
Protects the driver who is at fault against claims for damages to another person’s property, up to specified limits

19. MEDICAL PAYMENT INSURANCE
Pays medical and funeral expenses for bodily injuries sustained by occupants in the insured vehicle

20. NO-FAULT INSURANCE
In some states, people can recover losses and expenses from their own insurance company regardless of who is at fault

21. COLLISION INSURANCE
Provides coverage to pay the costs of repair or replacement of your vehicle

22. COMPREHENSIVE INSURANCE
Pays for damage to your vehicle for reasons other than collisions

23. UNINSURED AND UNDERINSURED MOTORIST
Protects you if you are hit by another driver who has too little or no insurance.

24. INSURANCE RATES DRIVING RECORD AGE MILES DRIVEN GENDER MARITAL STATUS
TYPE OF VEHICLE
WHERE DRIVER LIVES
DRIVER’S CLAIM RECORD

25. PREMIUMS
The amount you agree to pay each month/quarter/year for insurance coverage

26. DEDUCTABLE:
A set amount that you agree to pay in the event of a claim before the insurance company pays the difference.
HIGHER DEDUCTABLE = LOWER PREMIUM
LOWER DEDUCTABLE = HIGHER PREMIUM

27. So if………. Mr. A was in a collision The damage to his cars was $4,500
His deductable was $500
How much dies the Insurance company pay?
How much does Mr. A pay?

28. GOOD GRADES NO CLAIMS OR CONVICTIONS FOR THREE YEARS SAFETY FEATURES
REDUCED PREMIUMS
GOOD GRADES
NO CLAIMS OR CONVICTIONS FOR THREE YEARS
SAFETY FEATURES

29. ASSIGNED RISK INSURNACE
Drivers who have had their insurance cancelled due to poor driving record
Extremely high premium for several years

30. Mr. A’s Insurance
Property Damage Liability 10,000
Bodily Injury Liability 30,000 per person/60,000 MAX
Medical Payments 30,000/60,000 MAX
Collision 20,000/ 500 deductible
How much will Mr. A’s Insurance pay for Ms. B’s Hospital Bills? How Much Will Mr. A pay?
How much will Mr. A’s insurance pay for damages to Ms. B’s Car? How much will Mr. A pay?
How much will insurance pay for Mr. A’s injuries? How much will Mr. A pay?
How much will insurance pay for damages to Mr. A’s car? How much will Mr. A pay?
Mrs. B
Hospital Bills $34,000
Damage to Car $5,500
Mr. A Caused a Collision
Hospital Bills $22,000
Damage to Car $6,000