Personal Finance Objective 6.02-BStudents will understand options and practices for meeting transportation needs.
6.02-B “Choosing the Right Vehicle”
Sourcewww.AAA.com December 2011
Factors to Consider Before PurchasingDetermine what is affordable for
youEvaluate your driving habitsList needed featuresConsider vehicle depreciation
costsWill you buy New or “new to
you”?
What Can You Afford?
Value of your trade-inAmount of down payment Budget $ available for
◦Monthly installment payments or◦Monthly lease installment◦Lump sum payment for vehicle
Investment financing optionsInsurance costs
Evaluate Your Driving Habits
How will vehicle be used?◦What types of trips will be most frequent?
Local Short distance…will Electric car work?
◦How many passengers will vehicle need to carry?
◦How much cargo space is needed? Need trunk to lock Open storage (pickup truck)
◦Will vehicle be mostly on 4 lane highways? Weather/geographic conditions? snow,
mountains, gravel/muddy roads
◦Where will you park at home/work?
List of Needed FeaturesNeeded or Wanted?
◦Seating◦Cargo space◦Fuel economy◦Commute –Electric- MPG◦Style: 2 door, 4 door, 2WD, 4WD,
sedan, truck, SUV◦Safety features◦Specialty or convenience: GPS, CD
player, DVD player, Sirius radio
Consider Depreciation Costs Biggest yearly expense for new cars is DEPRECIATION Consider a model that has a track record of holding its value
for longer Research how much models depreciate within the first 5
years
New or “New to You”?
New Vehicle◦ Higher pricing◦ Possible purchase
incentives-rebates, gas for year bonuses, etc.
◦ Longer & broader warranties
◦ Wider variety of units available
◦ More variety in features◦ Can order “custom”
from factory
Will you buy NEW or NEW to YOU vehicles?Both have Benefits & Detriments
Consumer must weigh options and related costs to make best decision.
New or “New to You”?
New to You◦ Lower pricing◦ Less buying incentives◦ Warranties more limited◦ Harder to find desired
vehicle & features◦ Less choices widely
available◦ Search longer to find desired
vehicle◦ More maintenance due to
age & prior usage◦ Get inspection to ensure
quality and performance
Will you buy NEW or NEW to YOU vehicles?Both have Benefits & Detriments
Consumer must weigh options and related costs to make best decision.
WARRANTIES & MAINTENANCE
Review Warranty◦ Length ◦ Coverage◦ Limitations
Investigate maintenance costs◦ Check with an auto
repair shop ( a reputable or trusted mechanic) for estimated costs of Fluids-oil changes, etc. Parts-tires, batteries,
etc. Other repair items Overall value of vehicle Check out major
components-engine, 4WD
INVESTIGATE SAFETY RATINGS
Check with National Highway Traffic Safety Administration (NHTSA)
www.SafeCar.gov Insurance Institute
for Highway Safety (IIHS)
www.IIHS.org/Ratings
# of airbagsVehicle “roll”
factorIf using car seat,
chek out access to vehicle’s LATCH system
SEEK RECOMMENDATIONSRecommendatio
ns◦ Ask friends◦ Ask family◦ Ask colleagues◦ Ask your
mechanic
Reviews◦ Check webwsites for
expert opinions or reviews
◦ www.AAA.com/autosales
◦ www.AAA.com/Go , click “On New Cars”
DON’T LIMIT CHOICESDon’t get stuck
on one vehicle that you can’t live without!
Be flexible to get more negotiating room with seller
Check out vehicles that meet your needs