1. Transportation Chapter 12

2. Transportation Local, state, and federal transportation offices Individual transportation –Bicycles –In-line skates –Motorcycles Public transportation Carpooling

3. How to Choose a Car General rule – 20% of take home pay Can you afford it? New or used? –Reliability –Cost –Mileage (odometer) Class, make, model Do your homework (Blue Book, Edmnds’)

4. Choosing a car FeaturesOptions Dealer add-ons Extended warranty Safety features Used cars – see checklist on page 398 – good checklist

5. To Buy or Lease? Purchase –Investigate options (credit unions, banks, special offers—do the math!) Leasing –Renting a vehicle

6. Lease Terms Gross capitalized cost – your cost (negotiate!) Capitalized cost reduction – cash down payment Acquisition fee – Setting up lease (including a security deposit) Residual value – predicted lease-end value (purchase price at end of lease) Money factor - interest rate you pay for financing lease

7. Lease Terms Monthly payment Mileage allowance Excess wear fee – inquire about this before you sign! Disposition fee – fee paid when car is returned at end of lease (cost of getting car ready to sell to someone else)

8. Steps to Leasing Negotiate the price of the car (gross capitalized cost) Know the residual value (if 60%, you should expect to pay 40% over the term of lease) Down payment and security deposit Financing Return car (have mechanic look over first!)

9. You should consider a lease if you… Can’t pay cash for the new car you want Don’t drive a lot of miles Don’t keep your car for many years Keep your cars in excellent condition

10. The F&I Office FinancingInsurance –Accidental Death and Dismemberment –Gap protection –Extended warranty

11. Purchasing the car Invoice price – the amount the dealer paid from the manufacturer Do your homework! Sticker price – the MSRP (9-11% above invoice usually) Fair profit – 3% above invoice Take invoice, subtract rebates, add 3% Trade in –Sell yourself for more $$ –Do your homework first, if you decide to trade it in

12. Shopping for new cars Get referrals No-hassle dealers (Saturn) Shop on the Internet Time to shop –End of month –Cold months –September –Slow months, August/December Test drive

13. Negotiating Don’t be pressured Don’t tell them what you can afford Negotiate the price of the car first, (don’t bring up the trade-in just yet!) Explore other financing first Doc fee, prep fee—look at all the charges and QUESTION! Do your homework!

14. Fees to expect to pay Sales tax Destination charge (shipping) License and registration Documentation fee ($50-$100 MAX!) Any add-ons you agree to!!! READ EVERYTHING!

15. Maintaining a car Owner’s manual Maintenance schedule Tires –Inflated properly –Check treat Check your oil & have regular oil changes Check all fluids Get tune-ups regularly

16. Maintaining a car Brakes (good for about 40,000 miles) Routine checks –Belts –Windshield wipers –Check for leaks Exterior maintenance –Wash –Wax yearly

17. Maintaining a car Repairs –Use dealership for warranty work –Dealerships rather expensive vs. repair shops –Get estimates before agreeing to work –Ask about guarantees –Save your receipts Lemon Laws –Defect cannot be fixed after 3-4 attempts –Car in shop for 30 days or more during warranty period –Numerous major problems