2 12.1 Transportation Basics Options for Transportation:Bicycle:Inexpensive. Used bikes: $25. Average cost for new bikes: $200-$300.Make sure you purchase the right bike for the type of riding, usually to be used on street.Inline Skates:Inexpensive. $29-$150.Learn how to use them properly and chose the right ones. Hard wheels last longer but don't grip as well. Try medium. Boots should fit more snuggly than street shoes.Motorcycle:Less expensive than a car (to buy and maintain) but still a bit pricy. Need motorcycle license. More likely to have a fatal injury than in a car. Try to take a training course if inexperienced.
4 Public Transportation (Bus, Streetcars, Subway, Trains, Taxis)Cost: inexpensive. don't have to pay for gas and repairs. no parking fees. Convenience: goes to the most popular destinations. don't have to find a parking spot.Speed: no traffic on subways and trains. some large cities have bus lanes to bypass traffic. –Other Benefit: helps environment because it reduces air pollution.When available, carpool, which is an arrangement to share private transportation. (usually people within your neighborhood)
5 12.2 How to Choose a Car Should You Buy a Car? Vehicle = 2nd most expensive purchaseAffordable car loan = 20% of take-home payDo not forget cost of insurance, gas, and maintenanceCan you afford it?
6 Fewer problems; warranty Warranty from dealer only FactorNEWUSEDReliabilityFewer problems; warrantyWarranty from dealer onlyCostMuch more expensive. Lose value; have to sell for lessLoss of value = buy for less than it’s worthMileage(Odometer-a measure of wear)More repairs; most likely save in long run.
7 How to Choose a CarConsider: styles, sizes, features, options, warranties, safetyBe realistic; fit life stylePrioritizeFeatures-characteristics of a particular model of car that offer benefits to the ownerOptions- features that you can choose to include or not include on the car
8 How to Evaluate a Used Car (Look/Check for:)Mismatched paint (accident)Rust (everywhere)Strains on upholstery/carpeting and moldControls/lightsFluid dripsNo pullingBrakesGrinding/slipping of gearsBlue smoke from tailpipe = oil problemTransmission fluid
9 12.3 To Buy or Lease?Buying on credit can result in lower interest ratesWatch ads and look for rebate offers (rebate- a partial refund of the purchase price) IMPORTANT: do the math because sometimes rebates will end up costing more.Leasing (renting automobiles): Steps involved in Leasing.1.) Negotiate the Price of the Car2.) Know the Residual Value3.) Down Payment and Security Deposit4.) Financing5.) Before You Return Your Lease Car6.) Return Your Lease Car
10 Should You lease? You probably shouldn't lease if you... can pay cash for the car you wantdrive many miles in a yearkeep cars for many yearsare particularly hard on your car
11 After you negotiate a price… financing and insurance is next. Financing can be done at your bank or with the dealer. Insurance comes in many common policies.Accidental Death and Dismemberment: pays off the balance of your lease or loan if you accidentally die or are dismembered.Gap Protection: pays the difference between what you owe and what your car is worth if it is totaled in an accident.Extended Warranty Protection: extended the manufacturer's warranty on certain parts and services. *check out the company you would be buying it from*
12 Final Step: The Sales Contract Includes... Cash price Principal amount financedDown paymentFinance chargeUnpaid cash balanceTotal cost of the loanInsurance premiumsPayment scheduleOther costsREAD EVERYTHING BEFORE YOU SIGN
13 12.4 The Car-Buying Process Determine a Fair Price Check ListKnow what you wantWhat you can affordHow to financeKnow invoice priceSticker price is normally 9-11% above invoiceTrade-ins get less $Invoice Price-amount the dealer paid to buy the car from the manufacturerSticker Price-price tag detailing prices of car’s options and the total price
14 The Buying Process Go to several dealers Ask experienced car buyers Other options-No haggle dealers; internetShop towards end of the month (salespeople = more desperate)Shop in colder climates (August/December)Examine first, then drive
15 How to Negotiate the Deal Remember: You’re in charge (don’t feel pressured or threatened)Don’t tell them the price you can affordFirst offer should be a little above invoice price (do not reveal target price)Additional charges: sales tax, destination fee, license and registration, documentation feeRead all Paperwork
16 12.5 How to Maintain a Car Maintenance Every Car Needs Repair Services Learn how it works (read owner’s manual)Regularly check tires, oil, and other fluidsTune-ups, brakes, and routine checks are importantRepair ServicesChoose a repair shop by:Getting recommendationsChecking them outBuilding a relationshipWhen something is wrong with your carDescribe the problemGet and estimateKeep in mind guaranteesCheck and pay for repairsSave receiptsIf you’re not satisfiedTalk with managerAsk Better Business BureauSmall claims courtRebuilt/Reconditioned-used parts that were repaired or restored to working order
17 Lemon Check List Defect cannot be fixed after three or four attempts Continued major problems that keep it in the shop for 30 days during the warranty periodNumerous major problemsLemon Laws-protect consumers who buy defective new cars