Buying a Car

Objectives Students will:

be able to find a car that fits your needs. be able to decide whether a new or used

car is right for you. decide whether buying or leasing is right

for you. Understand the hidden costs of operation

and maintenance.

Do Now: Is it better to buy or lease a car? Why

or why not? Support your answer.

Buy Vs. Lease Own the vehicle

Monthly payments are usually higher

Early termination: you can sell or trade your car at any time

Free to drive as many miles as you want

Don’t own the vehicle

Monthly payments are always lower

If you end the lease early, early-termination charges

Most leases limit the number of miles you drive to 12,000 or 15,000 per year

Leasing Vs. BuyingLeasing might be a good option if:

If you want a new car and you plan on driving it only for a couple of years:

Can get a car with little or no money down.

Can help you get a more expensive car than you might otherwise be able to afford.

Buying a Car: A 20% down payment

is recommended You will probably pay

off the loan before the car stops working

At the end of your lease you have the option of buying out the car, but overall it will cost you more money than purchasing the car flat out.

Which Car is Right for You? Want Good Gas Mileage:

smaller car Do you carry many passengers?

Larger car

New or Used? New cars can cost you a

lot more without offering much value.

Over the first two years, a new car loses 30% of its resale value Offer a warranty and

certain peace of mind that used cars cannot offer.

New cars you can get exactly what you want.

Used cars look like a better option. However, cars can

break down after they are purchased

Solution: car dealers offer certified pre-owned programs to combat this problem and to ensure the quality of their used cars.

What can I Afford? Need verse Wants Coupe: is a small car with two doors and

two main seats: saves on gas SUVs: have multiple rows of seating Minivan: provides even more room Sedan: very popular, offers two rows of

seats, and a spacious trunk

Insurance No-fault auto Insurance: the driver’s insurance

will pay to fix the damage of his or her car even if the driver wasn’t faulted for the accident. (not in every state)

Liability Insurance Covers the cost of any damages you cause to other

drivers, but does not pay to fix your car if the accident is your fault.

Required by law Collision Insurance: pays to fix the damages to

your own car if the accident is your fault. Optional

Where to Go to Find a Car Magazine like Consumer Reports,

Car and Driver, and Road and Track offer expert opinions and test-drive reviews.

Used cars: Kelley Blue Book Will help determine the value of a

particular make and model and offer advice on how to deduct for any damages caused by the previous owner

http://www.kbb.com

What Lenders look for? Steady Income: Established Residence: Established Employment: Credit History:

Operation and Maintenance Gas: the size of your car will greatly affect

how much you have to spend on gas If you have a long commute, you should

look for a car that is fuel efficient. Other costs:

Parking Oil Changes Repairs Tire Replacement

https://www.youtube.com/watch?v=dxhlCSEiGjU Video

Video Main Idea What did you learn from this video? Write down what you learned and hand

it in at the end of the class.