car buying

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MAKING MONEY SENSE TIPS AND IDEAS TO HELP YOUR FAMILY PROSPER The Car Buying Process “Transportation costs make up almost one-fifth of the average consumer’s budget.”

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Page 1: Car Buying

MAKING MONEY SENSETIPS AND IDEAS TO HELP YOUR FAMILY PROSPER

The Car Buying Process

“Transportation costs make up almost one-fifth of the average consumer’s budget.”

Page 2: Car Buying

QUESTIONS TO ASK…WHAT KIND OF CAR DO YOU NEED?

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How long do you want it to last Who will be in the car Main use of the car Special needs Weather conditions Maintenance New or used Safety features Resale value Insurance cost

Page 3: Car Buying

VEHICLE PRIORITY WORKSHEET

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Category Desired features

How important?

Overall

Type (sedan, pick up, SUV, convertible, compact)

Manufacturer

Style (2-dr., 4-dr, hatchback

Maximum odometer reading

Model-year range

Color

Body free of dings or dents

For each characteristic, fill in the quality you’re seeking and how important it is to you using this scale:0= Not Important 1= Fairly Important 2= Very Important 3= MUST Have

Page 4: Car Buying

VEHICLE PRIORITY WORKSHEET CONT…

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Category Desired features

How important?

Performance

Fuel economy (10 mpg, 20 mpg, 30+ mpg)

Horsepower

Rated as reliable

Handles well on the highway

4-wheel drive

Safety

Driver air bag

Passenger/side air bags, antilock brakes

Rated as safe in crash tests

Daytime running lights

Page 5: Car Buying

VEHICLE PRIORITY WORKSHEET CONT…

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Category Desired features

How important?

Interior

Comfortable seats

Interior (vinyl, cloth or leather)

A/C

Stereo/sound system

Comfortable/quiet ride

Pricing

Maximum sales price

Low insurance premiums

Other

Page 6: Car Buying

CONSIDER ALL VEHICLES IN A CLASS

Helpful Website: http://www.edmunds.com/new-cars/

Pick the type of vehicle you are interested in Once you select a vehicle click on the review &

specs tab At the bottom left hand side under helpful tools

click on compare to popular models

According to the 2006 edition of AAA’s Your Driving Costs Study, the overall average cost of owning and operating a passenger vehicle that is driven 15,000 miles in one year is $7,823

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Page 7: Car Buying

CONSIDER ALL THE COSTS OF OWNERSHIP

Another helpful link: http://www.edmunds.com/apps/cto/CTOintroController

This is a pricing system that calculates the additional costs you may not have included (depreciation, interest on your loan, taxes and fees, insurance premiums, fuel costs, maintenance and repairs) when considering what car to purchase.

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Page 8: Car Buying

BUYING VS. LEASING

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Buying• You are paying for the purchase of the vehicle.• Expect to pay off & still drive.• The vehicle purchased is solely yours.• You can sell the vehicle.• When purchasing you can negotiate the price.

Leasing• You are paying for the use of the vehicle (its depreciation due to

time and mileage)• With leasing you can expect a new car every couple years.• You would be more concerned about mileage.• Have to drive much more careful.• You could afford to drive a higher-end vehicle.• Don’t own the vehicle.• Most likely a two year commitment to the vehicle.

Page 9: Car Buying

HOW MUCH CAN YOU AFFORD

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“New cars depreciate 20-30 percent the second you

drive them off the lot.” Bring your own financing! The last place you

want to secure financing is at the dealership. http://www.myprospera.com/rates_and_calcul

ators/calc-loan.asp Estimate your monthly payment right at

Prospera’s website by entering in your loan amount, length of loan and interest rate.

http://www.edmunds.com/apps/calc/CalculatorController?pmtcalAction=basic_calc Estimate what your monthly payment will be

based on purchase price, down payment, interest rate and length of loan.

Page 10: Car Buying

RATE VS. REBATE

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To determine if taking a low rate is better than cash back view the following example: If you borrow $16,000 for 36 months at 0% your

monthly payment would be $444.44 and you would pay back $16,000 over the life of the loan.

Suppose you take a $2,000 rebate and finance $14,000 for 36 months at 4.49%; your monthly payment would go down to $416.39 and you would pay back $14,990.04 over the life of the loan.

By taking the rebate and financing with your credit union you could save $1,009.96.

Page 11: Car Buying

FOR MORE INFORMATION:920.882.4800

www.myprospera.com

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