1. Chapter 8: Automobiles and Other Major Purchases

2. Objectives Understand several guidelines to save money on major purchases. Employ the three steps in wise buying that occur prior to interacting with sellers. Comparison shop when buying or leasing vehicles and other major purchases.

3. Objectives Negotiate effectively and make intelligent decisions when undertaking major expenditures. Evaluate your purchase decisions as a guide for future behavior.

4. Guidelines for Wise Buying Control buying on impulse Pay cash Buy at the right time Don’t pay extra for a “name” Recognize the high price of convenience shopping Use life-cycle planning for major purchases

5. Steps Before Interacting with Seller Prioritize wants Do pre-shopping research Price Trade-in Cost of financing Fit expenditure into budget

6. Comparison Shopping Warranties Implied Express Service contracts Leasing vs. buying Balloon financing

7. Successful negotiations require information Make the decision Evaluate the decision Negotiate and Decide On Best Deal

8. Decision Making Grid Price30%92.772.151.5 Durability25%61.582.0102.5 Features20%61.281.6102.0 Warranty15%60.9101.581.2 Styling10%101.060.680.8 TOTAL100%7.37.88.0 Criteria Decision Weight (W) Appliance A Score (S)* W x S Appliance B Score (S) W x S Appliance C Score (S) W x S *Using a 10-point scale.

9. Buying services www.comsumerreports.org Internet sites www.buyingadvice.com www.carmax.com www.carsbelowinvoice.com www.edmunds.com www.autosite.com http://auto.consumerguide.com Help When Buying a New Vehicle 8 - 14

10. Rental Car Basics Type Price and gas payment Additional fees Reservations Mileage restrictions Insurance and inspection

11. Get Things Fixed Get estimate in advance Ask how long repairs will take Get claim check Ask to be given all replaced parts Be available when at-home repairs are made Get written receipt

12. Automobile Financing and Leasing Obtain all itemized costs Know underlying vehicle price Comparison shop for a lease

13. Choose Between Low Interest and Rebate Compare actual costs Consider opportunity cost of rebate Add opportunity cost of foregone rebate to finance charge of dealer financing

14. Buy a Used Vehicle Decide on features and options Decide how much to spend Select makes/models in price range Start search Check selection carefully Negotiate and decide

15. Get the Most for Your Car-Buying Dollar Buy used vehicles Buy used vehicles from private owners Visit dealerships at least three times Negotiate price first Consider leasing Use up your vehicles