What to know? How much can you spend every month? What are Benefits to new, used & leases? Should I Buy or lease? Do I have a Down payment or Trade-In? What is the current Interest Rates? What is the current Sales Tax? Am I driving for Style, Comfort, Family?

Buying a Car: Starts with what you currently have!!!

Car Ownership Importance to your future? Do you need to drive (maybe not if you live in a large city) You need insurance to drive Cars require maintenance

Credit/Loan How could buying a car help your credit? Types of Credit: count for roughly 10% of your credit score Installment Plan: Monthly Payments prove that you are trustworthy Where do you get a car loan?

Prior to Buying Options: 1. Down payment- Cash you put down for a car. Lowers payments & banks like. 2. Trade-In- Provide dealer with your current car and they buy it off you. 3. Combination of both 4. Neither

Downpayment Cash you have to pay for car. This lowers the principal (amount you owe) Example: $20,000 with $5,000 down = $15,000 Loan You do not need a down payment

Selling your Car Trade-in Dealer buys your car off you Reminder: They are trying to make money off you. Goes for down payment on next car Typically dealers Offer you less but much easier Benefit for buying cars- turn one in

Selling Your Car Private Party Sale- Sell by yourself Cars.com, craigslist, put a sign on car Costs of advertisement and title Will get more money off sale

What is my cars Value? Cars.com, nada.com, edmunds Kelly blue book (kbb.com) An advantage to owning your car

Go to Kbb.com (Kelly Blue Book) to start project

Depreciation zine.com/Calculators/Auto-Loan- Calculators/Car-Depreciation-Calculator/ zine.com/Calculators/Auto-Loan- Calculators/Car-Depreciation-Calculator/ Depreciation - Cars lose value once you drive them 20% to drive new car off the lot, that is $6-8,000 off a $22,000 and $10-12,000 off $40,000 car, it is more like 35% 65% in first 5 years

Consumer Reports Some models depreciate slower Total a car in crash- only covers the principal, not interest. So if you crash a new car early, you will have paid more in interest than later ndex.htm ndex.htm

Are cars a good investment? No- not a good investment Get you from point A-B Include maintenance, oil, tires, interest, insurance could mean $$$ every year It is an asset that keeps going down in value and becomes less reliable

How to minimize depreciation? Buy slightly used cars 1-3 years Still have warranties, minimal miles If you buy new, keep it for a long time Stay on top of maintenance, cars can last 200,000 miles Buy older cars, less depreciation but old car and more likely to have problems

Financing Car (buy) 24, 36, 48, 60, 72 months Loan by bank or dealer- check this out interest rate higher can cost you More months = less monthly payments More months = more interest

Financing Know the APR- Annual Percentage Rate- the interest rate on the loan The lower the APR- the cheaper the car Default- Failure to make payments on the car. Results in repossession of car.

Use Bankrate to see costs of loan calculator.aspx calculator.aspx Change the payment options Change interest rates

3 YR. 15,000 LOAN `

4YR. 15,000 LOAN

Leasing vs. Buying Buying- pay for the car and you own it Leasing- is payment for use of car but will turn back to dealer after several months

Leasing Terms Lease- long term rental and allows specific period of time and mileage. Mileage limit- The max distance a vehicle can be driven during a lease Excess Mileage charges- Penalty at end of lease if vehicle went over mileage limit Early Termination Fee- Penalty paid for withdrawing or ending a lease early

Leasing Terms cont... Lease Payment- The amount you pay every month for the lease of a car. Lessee- The person leasing (driving) the car Lessor- The company (true owner) of the car, who you pay Term- The length of the lease. 24,36 etc..

Reasons to Lease New car every 2-3 years Lower monthly payments Car under warranty or dealer protection Don’t like buying or selling car Don’t drive a lot of miles per week Will pay more over the long haul.

Leasing Payments Depreciation charge goes to dealer- depreciation Finance charge added to payment to cover Dealer gets the car back- you don’t get anything

Reasons to Buy Don’t mind higher payments Like having trade in and resale value Prefer to be equity free after done with payments Don’t mind unexpected breakdowns Drive many miles Unexpected future

Buy Used or New Used Good: Depreciation, Resale, Drive a lot, lower payments than new Used Bad: Breakdowns you pay New Good: Less mechanical issues, warranty, Style, Drive a lot New Bad: Depreciation, higher payments

Buy Terms Sticker Price- The price on the sticker of the car. Cars should always be bought below sticker unless brand new MSRP- Manufactures Suggested Retail. The suggested base sale price.

Payments Principal- Amount the car costs (sticker price) Interest- The amount to finance the car Monthly Payment- Principal and interest. Paying for car and the loan.

Certified Pre-Owned CPO- Certified Pre-Owned- means dealer did inspection on car and passed test.

Incentives to Buy Rebates- Money off car sale prices money off the MSRP- Manufactured sticker retail price Little or no interest (finance) 0% financing- Pay no interest

Warranty Warranty: New cars usually have 3-5 years for major breakdowns. Bumper to Bumper. Tires, Wipers, dents etc... not covered Extended- Dealerships offer extensions to these. Have to do math to see if worth it. What do they cover? Transmission, engine- these can be expensive to fix.

Decisions? Choose based on personal preferences Gas Mileage Resale and length you will have Family or Single? Passengers? Safety? Looks, style

Buying Used Never offer full price. Used car prices are negotiated. Make sure to print off Kelly blue book sticker price and look at other similar cars before you accept any offer.

Car Account It is easier to plan for the maintenance. Make sure you have $ in account If you don’t pay they repo the car, make sure you can pay.

MPG - Miles Per Gallon City - Start and stop causes worse mileage Highway - Better mileage SUV and trucks worse than car Electric cars-

Other costs Insurance (Average $400 per half) Sales tax Tires Oil changes Wipers and other broken parts