1. Chapter 16 Part I

2. Laws of Ownership There are laws from different sources to protect buyers and sellers Vehicles are considered “goods” The “Uniform Commercial Code (UCC)” applies to their sale and lease If you buy a vehicle for personal, family, or household purposes, both federal and state consumer protection laws may also apply Financing a vehicle has special laws that regulate credit

3. Financing a Vehicle One of the 1 st steps in buying a vehicle is deciding how much you can AFFORD You can pay CASH or FINANCE it Federal law requires lenders to disclose the finance charge and annual percentage rate (APR) to borrowers Finance charge is the cost of the loan in dollars and cents APR is the true interest rate of the loan You can get financed (get a loan) from a bank, credit union, or the dealership

4. Before you sign!!!! You should know the following information: The exact price you’re paying for the vehicle The amount you are financing The finance charge The APR The number and amount of payments The total sales price (the sum of the monthly payments plus the down payment)

5. Buying a New Vehicle Do research 1 st – magazines, on-line, visit dealerships Check out Safety options Crash ratings Maintenance Performance Affordability Dealers are willing to negotiate - they will bargain on their profit margin between 10% and 20%

6. Buying New – TRADE-IN Your current vehicle that you OWN can be used as a ‘trade-in’ towards another vehicle Research the value of your trade-in using the Internet Kelly’s Blue Book (kbb.com) Most times it is better to sell the vehicle yourself (outright) Trading a vehicle in to a dealership is convenient

7. Leasing a New Vehicle A popular alternative to buying Is the most expensive way to get a vehicle Advantages: Low down payment Smaller monthly payments Always have a newer vehicle Disadvantages: No ownership Still responsible for regular maintenance and insurance

8. “Consumer Leasing Act” Federal law requiring businesses to tell you all of the terms of the lease Federal law regulates advertisements of leases They include……. The amount of payment Length of payments Down payment requirements Consumer’s responsibility at the end of the lease Whether the consumer can purchase the vehicle

9. What do YOU think? Do you think leasing is a wise option for obtaining a vehicle? Explain your answer. ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________