2. Section 1 (Day 4) Virginia Driver Responsibilities: Licensing Responsibilities

3. Bell Ringer Write a half page red to red. Save these to be turned in with your test! Worth 10% of your grade. Come up with your own right of way scenario. Draw the scenario and explain what is going on. Examples of questions to answer: Which car arrived first? What type of intersection are the cars in?

4. Day 4 Objectives The students will learn the steps to take in order to buy a car. The students will learn about insurance. The students will understand the different types of insurance. Related SOL: DE.19

5. This is what you are trying to get at the end of class.. Spotswood High School R.C.P.S 36 x 12/18/2012 Your Name Here “Green Card”

6. How to buy a car:

7. Vehicle Price Formula Purchase Price x Interest Rate x Length of Finance Purchase Price - $10,000 Interest Rate - 8 percent Interest Rate - 8 percent Length of Finance - 24 months Length of Finance - 24 months Purchase Price + Sales Taxes + Interest = Total Price Approximately 11,592.00 Your Monthly Payment What is your monthly payment?

8. Vehicle Price Monthly Payment Formula Your Monthly Payment Price + taxes + interest # of months = Monthly payment Cost of Vehicle $10,000.00 3.5% Titling Tax 8% Interest on Loan (based on unpaid balance) Loan is over 24 Months. $10,000.00 +$350.00 +$1200.00* 24 = $481.25 * 1 st year interest = $10,000 x.08 = $800 *2 nd year interest = $5,000 x.08 = $400

9. Buying A Car Before buying a car, you have to decide whether or not you want to buy a new car or a used car.

10. The benefits and drawbacks of buying new and used cars CarBenefitsDrawbacks New The car has never been in a wreck, never been smoked in, and hasn’t had any past maintenance. You can also customize your car to fit your personal needs. You can also get customer cash or cash rebates on new cars. The car’s cost. When you drive the car off the lot it automatically looses cost if you want to sell it because the car is now a used car. Used Costs less.You have to do extra research to learn the vehicles history. Could have been smoked in, wrecked, or stripped for parts.

11. Five things you should know 1.The invoice price is how much the dealer paid for the car. The dealer's final cost may be even lower because manufactures often give rebates, allowances, and other incentive awards. 2.Dealers may be willing to bargain on their profit margin, which is generally between 10 percent and 20 percent. 3.Don't discuss the possibility of a trade-in until you get the best possible price for your new car. 4.Before buying a service contract, compare it with the manufacturer's warranty. Don't pay extra for coverage you may already have. 5.Buying credit insurance is not required for a loan. www.ican.com/news/fullpage.cfm/articleid/259F8679-8B66-4659-91E5AB37BCC0490B/cx/auto.find_vehicle/article.cfm Buying a new car When buying any new car you should consider these five tips.

12. Buying a used car When buying a used car it is advised to do some research on the car you want to buy. It is helpful to know the number of previous owners, the history of the car, for instance, if the car was involved in some sort of accident, any old mechanical problems, and any maintenance that was done on the car.

13. How to find the history of your car To find the history of yours, or any car, you can go online to many different websites such as CARFAX.com, cars.com, usedcars.com...etc. You can also ask the dealership for information regarding your car.

14. VIN: 1HGED3649KA081343 Year/Make/Model: 1989 HONDA CIVIC DX Body Style: Sedan 4 DR Engine Type: 1.5L L4 FI Manufactured In: UNITED STATES Search Results: 4 records found in our database IMPORTANT! The 4 records on this 1989 HONDA CIVIC DX will confirm a clean history or uncover potential problems. Find out by ordering the complete CARFAX Vehicle History Report. Example from CARFAX.com

15. Places to buy a car You can buy a car at a new/used car dealership, a superstore dealership, websites, print classifieds, or person-to-person transactions. The benefits of buying a car from a dealership or a website is that most of them are required to give a complete and accurate vehicle history report. You can’t always trust person-to-person transactions because it’s easy to lie and say that the car wasn’t ever in an accident when it could very easily have been a salvage vehicle.

16. When Buying a Car Have the mechanic give the car a full inspection Run a vehicle history report to get a full history of the car Avoid “as is” statements Have your finance and loan approvals ready before you even go to the dealership

17. Warranty Options

18. VIN Numbers The VIN number is your Vehicle Identification Number. A VIN number is your cars serial number. Your cars VIN number is located at the bottom left side of the dash (left from the inside) VIN #

19. Using the Internet to search for cars Lets say that I wanted to buy a VW Beetle off the internet. What sites would I visit and what information would I need to know to help me buy this car?

20. VW Beetle Internet Research Go to Autotraders.com (just a suggestion) Select “Used Car” Select “Find your Car” Enter the type of car that you are searching for Select “Next” Enter the type of car, model year, price range, zip code, and select a mile radius to search in Scroll through the cars found in your search

21. Available at: Crown Auto Sales Orange, VA 22960 Contact: David Watson Toll Free 1-800-442-2769 Distance from ZIP 22801: 50 miles Comments: One owner gls,automatic, most power options,factory power sunroof,keyless entry,alloy wheels,best color, excellent miles,serviced and state inspected ready for your inspection please call 1-800- 442-2769 Options Installed: Driver Air Bag; Anti-Lock Brakes; Air Conditioning; Alloy Wheels; Cruise Control; Passenger Air Bag; Rear Window Defroster; Power Door Locks; Power Mirrors; Power Windows; Power Steering; Sunroof/Moonroof; Tinted Glass; Tilt Wheel; 2000 Volkswagen Beetle GLS $11995 This Car's Details Price$11995Mileage31078 Exterior Color: SilverInterior Color:Charcoal Body StyleHatchbackDoorsTwo Door Engine4 Cylinder GasolineTrans.Automatic StereoAM/FM Stereo TapeFuel TypeGasoline Drive Type2 wheel driveStock No.6587 VIN3VWCC21C0YM458717 All advertised prices exclude government fees and taxes, any finance charges, any dealer document preparation charge, and any emission testing charge. Auto information is based in part on data supplied by IntelliChoice. Please refer to our Visitor Agreement for further information on vehicle data. By using this service, you accept the terms of our Visitor Agreement. A few words of caution about buying a pre-owned car. ©2001 AutoTrader.com L.L.C.data supplied by IntelliChoiceVisitor Agreementbuying a pre-owned car VW Beetle Internet Research

22. What To Know Before You Go The first thing that you have to do before going out to buy a car is to check your budget, your credit history, and your vehicle needs (Four-wheels drive, handicap entrance, towing, gas mileage, size,...etc.) You can check your credit history online at Freecreditreport.com, or at your bank

23. Hidden Costs: Any market adjustment prices, taxes- 3% VA sales tax,.2% dealer business license tax; DMV fees- $29.50 plate fee, $10.00 title fee, $10.00 DMV processing fee; $95.00 dealer processing fee Price Differences

24. Average Price- The standard price for the most commonly bought package or option for the car Dealer Price- What the dealership paid for the car Sticker Price- What the dealership asks for the car Price Differences

25. Finding Out About Cars You can find out about cars by reading magazines, and by doing research online. You can also learn about cars by asking your family, friends, co-workers, and neighbors.

26. Getting The Best Price What makes most buyers nervous is having to negotiate for a more beneficial to them When buying a car, never be afraid of negotiating

27. Lemons Once you’ve made your decision, you need to know what to do with your new car if you have any problems If you feel that you’ve been sold a lemon, you do have recourse Recourse- The right to demand that the dealership that gave you your car reimburse you, whether it be with money, or with a new car

28. Helpful Hints Be Realistic- dealerships often see people come in expecting to buy a car, and then not being able to afford it Never Accept The First Offer Do Your Homework- Know what you want Be Prepared To Put Money Down

29. Insurance

30. What is auto insurance? Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

31. Auto insurance provides Auto insurance provides property, liability and medical coverage: Property coverage pays for damage to or theft of your car. Liability coverage pays for your legal responsibility to others for bodily injury or property damage. Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

32. How much Insurance should you have? At a minimum, your insurance must provide the following: $25,000 for injury or death of one person $50,000 for injury of two or more people; and $20,000 for property damage. If your vehicle is not insured, you must pay a $500.00 uninsured motor vehicle fee. This does not provide insurance, but allows you to register and operate a vehicle in VA. For 1 year.

33. Insuring a Car VA Law requires you to provide proof of financial responsibility VA Law requires you to provide proof of financial responsibility If you still owe money on your car, your lender may require collision insurance If you still owe money on your car, your lender may require collision insurance Your parents’ policy covers you while you have a learner’s permit Your parents’ policy covers you while you have a learner’s permit

34. Financial Responsibility Law $ Minimum liability coverage $ Alternatives to insurance coverage $ Types of proof of financial responsibility $ When you must show proof of financial responsibility $ Penalties for driving without insurance

35. Required Minimum Liability Coverage in VA $25,000 for bodily injury / death one person $25,000 for bodily injury / death one person Up to $50,000 for bodily injury / death two or more persons Up to $50,000 for bodily injury / death two or more persons $20,000 for property damage $20,000 for property damage Virginia Auto Insurance

36. You must show Proof of Financial Responsibility when you: Virginia Auto Insurance are asked for it by a police officer; are asked for it by a police officer; have a collision; or have a collision; or register your vehicle or renew its plates. register your vehicle or renew its plates.

37. Virginia Auto Insurance Penalties for Driving without Proof of Financial Responsibility  $500 fine  Suspension of your driver’s license  Suspension of your vehicle registration  Higher insurance premiums for the next 3 years (SR-22)  If you caused the crash, you are responsible for other people’s losses Suspended

38. Virginia Auto Insurance Facts on the Declaration Page of Your Policy  The exact name of your insurance company  The policy number  Your coverage and how much it costs  Your deductibles, if any  The vehicles insured on the policy, their vehicle identification numbers and their classifications for rating purposes

39. Virginia Personal Auto Policy Seven Types of Coverage Liability Liability Medical Payments Medical Payments Uninsured/Underinsured Motorist Uninsured/Underinsured Motorist Collision Collision Comprehensive Comprehensive Towing and Labor Towing and Labor Rental Reimbursement Rental Reimbursement

40. Liability Coverage Pays: Other people’s medical expenses Other people’s medical expenses Other people’s auto repairs Other people’s auto repairs Property damage Property damageCovers: You You Your family Your family Others driving with your permission Others driving with your permissionRequired? Yes, required by Virginia law Yes, required by Virginia law

41. Medical Payments Coverage Pays: Medical expenses Medical expenses Funeral expenses Funeral expenses Covers: You You Your family Your family Your passengers Your passengersRequired? Not required by Virginia law Not required by Virginia law

42. Uninsured/Underinsured Motorist (UM/UIM) Coverage Pays: Medical expenses Funeral expenses Car repairs Car rental Replacement of damaged contents Covers: Covers: (if hit by an uninsured/underinsured or hit-and-run motorist) You Your family Your passengersRequired? Not by Virginia law, but company must offer

43. Collision Coverage Pays: Your car repair Your car replacementCovers: Your car Regardless of driver or who was at faultRequired? Not by Virginia law, but often required by the finance company that loaned you the money to buy the car

44. Comprehensive Coverage Pays: Car repair or replacement after: fire hailstorm theft or other non-collision event rental car after theftCovers: Actual cash value of your carRequired? Not by Virginia law, but often required by car finance companies

45. Towing and Labor Coverage Pays: Towing Towing On site labor charges such as changing a tire On site labor charges such as changing a tire When your car is disabled When your car is disabledCovers: Your car Your carRequired? Not required by Virginia law Not required by Virginia law

46. Rental Reimbursement Coverage Pays: A rental car while your car is being repaired after a crash after comprehensive lossesCovers: You Your family membersRequired? Not required by Virginia law Car Rental Company

47. Insurance Costs  How are car insurance rates determined?  What factors are used in establishing rates?  Discounts?

48. Insurance Costs Factors used to determine your premium: Type of Car Highest for luxury, high-performance, and sports cars Higher for cars that damage easily Higher for cars that cost more to repair Collision and comprehensive rates How you use your car Higher for cars driven a lot of miles and used for school, work or business Your Age, Marital Status, Driving Record, and Grades Highest Rates Male drivers under 25 Unmarried women under 21 Where you live and drive Urban counties have more crashes and auto thefts so rates tend to be higher than those in rural areas

49. Insurance Costs Factors used to determine your individual premium: Factors used to determine your individual premium: Your Deductibles Your share of the cost of a collision or comprehensive claim You can reduce your premium by raising your deductibles Surcharges Penalties added for accidents and certain traffic violations Discounts Some are required by the state, while others are incentives offered by insurance companies

50. Education and Car Equipment Savings NOTE: SOME insurance companies offer the following discounts Premium Discounts Auto Insurance Discount Savings Defensive driving courses Percent off Percent off Liability, Collision, and Medical Payments Airbags and other passive restraints Percent off Percent off Medical Payments and Bodily Injury Drug / alcohol education Percent off Percent off Liability, Collision, Medical Payments, and Bodily Injury Anti-theft devices May Reduce Comprehensive premium; May Reduce Comprehensive premium; amount varies by device and county Two or more cars on a policy May reduce Liability, Medical Payments and Collision Insurance costs

51. Some companies may give discounts for: Some companies may give discounts for: Your age and annual mileage driven Your age and annual mileage driven Policy renewal, no claims, good driving record and anti-lock brakes Policy renewal, no claims, good driving record and anti-lock brakes A parent or family whose young driver is away at school without a car A parent or family whose young driver is away at school without a car Full-time college and high school students with a "B" or 3.0 grade point average Full-time college and high school students with a "B" or 3.0 grade point average Cars with automatic daytime running lights Cars with automatic daytime running lights Membership or adult leadership in certain youth organizations Membership or adult leadership in certain youth organizations Insurance Premium Discounts

52. High Risk Drivers  High risk drivers (bad driving record) Each company has its own rules for deciding whether to insure high risk drivers (Called “underwriting guidelines”) Usually much harder to get car insurance Must pay higher premiums  Assigned-risk drivers VA Auto Insurance Plan—requires all insurance companies to take some high risk drivers High risk drivers are assigned to an insurance company by the state Surcharges are added for at least 3 years

53. Your Driving Record May COST You High Risk Drivers Crashes or Violations Surcharges Your premium MAY increase by: One collision (at-fault) in 36 months 15% Two collisions 35% Three collisions 60% Each moving violation (speeding, etc.) (Surcharges will apply for certain traffic violations.) Varies Involuntary manslaughter 60% Driving under the influence 60% Criminally negligent driving 60%

54. Paying for Insurance Many people can’t afford to pay their car insurance premium in one installment Insurance companies must offer installment plans Agents and insurers may use finance companies that will - lend you money at high interest rates to pay insurance premiums Look for insurance companies that offer installment plans with low interest and fees Installment Plan Number of Months_____ Interest Rate_____% ________________________ Client ________________________ Company Representative Installment Plan

55. Paying for Insurance Ask the agent: Who will provide my installment plan? - the insurance company, or - a premium finance company If it is a premium finance company, what is the interest rate? How much is the down payment? How much is my monthly payment? How many payments do I make? How much is my total payment? (annual or six-month premium plus interest )

56. INSTALLMENT PLAN WORKSHEET Agent or Company Names ____________________________ Interest Rate, if any ____________________________ Down Payment ____________________________ Monthly Payment ____________________________ Number of Months ____________________________ Total you pay ____________________________ Use a worksheet to compare the installment packages offered by agents and companies Paying for Insurance

57. Losing Your Insurance Cancellation First 60 days, company can cancel for any reason, including a ticket or a collision After policy is in effect more than 60 days, can cancel but: - must give 10 days' notice before canceling - Must refund unearned premium Note: Cancellation for non-payment is effective immediately.Non-renewal Company will not offer a new contract Request Reasons in Writing Why company canceled the policy Why company will not renew the policy CANCELED CANCELED

58. After the Collision What Now? Discuss what your policy requires you to do after a collision Your uninsured motorist coverage pays for hit-and-run collisions only if the crash is reported to the police

59. After the Collision Involved in a Crash Stop as close to the scene as possible Check for injuries - make sure your passengers and those in the other vehicle(s) are OK if anyone is injured or killed contact police immediately if no one is injured and your vehicle can be moved, move it from blocking the traffic flow Notify police Warn oncoming traffic Exchange information provide insurance information obtain information from others involved and witnesses Notify your insurance company as soon as possible

60. After the Collision What should you do when you are involved in a crash and have a claim? If the company rejects your claim or pays only part of it, you should be given an explanation for that decision. Notify your insurance company promptly Your agent can help you file the claim correctly and completely fill out any forms needed to verify your claim Keep a copy of the forms for your records

61. Review for Test