car buying
TRANSCRIPT
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.”
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
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
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
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
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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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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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.
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.
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.
FOR MORE INFORMATION:920.882.4800
www.myprospera.com
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