Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved1 Introduction The automobile is the primary mode of transportation in the United States. Some people actually spend more on vehicles than they spend buying a home We have a great affinity for our vehicles and owning one means you can travel at will An automobile is generally the second most expensive purchase you will ever make

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved2 Objectives Define the cost range for new and used vehicles You should be able to do the following after completing this lesson. List the average cost of a new vehicle today Explain where people get the money to buy vehicles Review the businesses where you can get an auto loan Discuss why vehicles decrease in value each year Define down payment, invoice price, MSRP, principal, interest, sales taxes and other key terms introduced in this lesson Summarize why dealers offer cash back, rebates and incentives Contrast leasing to buying a vehicle List some common lease restrictions

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved – Cost of Vehicles What the average cost range of a new vehicle can be How long it typically takes to pay for a vehicle Why it is importance to understand both vehicle and loan terminology In this section, you will learn What the average cost of a new vehicle is today Why it is importance to understand the buying process What the average cost range of a used vehicle is

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved – Paying for a New Vehicle Where people get the money to buy a vehicle What the lender verifies and checks when you apply for an auto loan In this section, you will learn What determines the interest rate you will be charged on an auto loan Car Loan Interest Example You will run the following Interactive Example

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved – Auto Loans Which businesses typically make auto loans Why some car manufactures make auto loans What the collateral for an auto loan is What the normal Term of an auto loan is What happens to the value of your vehicle after you purchase it In this section, you will learn What the lender will require you to have

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved – Auto Loan Terminology How interest and time affect the amount you must repay How the down payment can affect the interest rate for a loan How the Term for a car loan is specified and the typical range In this section, you will learn What MSRP, invoice price and negotiated price mean What the loan principal and additional charges are for the loan How to calculate your monthly payment Buy vs. Lease Exercise You will run the following Interactive Exercise

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved – Leasing a Vehicle What lease principal, inception costs and residual value are Why the lease price may be different than the selling price of the vehicle What a lease is and how a lease works How the inception costs affect the lease price In this section, you will learn What the typical Term for a lease is How to calculate the lease principal Buy vs. Lease Exercise You will run the following Interactive Exercise

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved – Lease Restrictions and Benefits What lease restrictions are designed to do How many miles per year the typical lease permits What happens if the mileage per year is exceeded What normal wear and tear is What insurance coverage you must purchase for a leased vehicle In this section, you will learn

Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved9 Discussion Questions Why does the popularity of leasing vehicles seem to come and go? How and why does the economy have such a strong affect on the number of vehicles that are bought each year?