1. Personal Finance Garman/Forgue Ninth Edition
Chapter 8: Vehicle and Other Major Purchases
PPT slide program prepared by Amy Forgue and Ray Forgue.

2. Learning Objectives
Explain the three steps in the planned buying process that occur prior to interacting with sellers.
Describe the five aspects of major purchases that require comparison shopping.
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3. Learning Objectives
Negotiate and decide effective when making major purchases.
Evaluate your purchase decisions and, if necessary, effectively seek redress.
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4. Do Your Homework What do you really want? Need Want Impulse Buying
Generic Products
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5. How To Buy Smart Become an expert
Preshopping Research: Gathering information before actually beginning to interact with sellers.
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6. How To Buy Smart What price should you expect to pay?
Manufacturer’s Suggested Retail Price (or MSRP): The suggested initial asking price.
Dealer Sticker Price: Includes additional charges tacked on by the dealer.
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7. How To Buy Smart What is a fair interest rate? Loan preapproval
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8. How To Buy Smart Is a rebate available?
Rebate: A partial refund of a purchase price offered as an inducement to buy.
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9. How To Buy Smart What is my trade-in worth? Can I afford it?
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10. How To Buy Smart Use comparison shopping to find the best buy.
Compare prices.
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11. How To Buy Smart Compare financing options.
Consider leasing instead of buying.
Leasing: Renting a product while the ownership title remains with the lease grantor.
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12. Leasing Terminology Open-end lease
Closed-end lease (or walkaway lease)
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13. Leasing Terminology Additional leasing fees: Disposition fee
Early termination charge
Early termination payoff
See comments on prior slide. ALSO: 2 terms appear on p218 but not here (“early termination payoff” and “balloon automobile loan”) – add the first on this slide and the second on its own slide?
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14. Compare Warranties Warranty Implied Warranty Express Warranties
Full Warranty
Extended warranties are overpriced!
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15. Negotiation Negotiating (or haggling)
Negotiate effectively and decide at home.
Successful negotiators are armed with information.
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16. Negotiation Negotiate your price. New-Vehicle Buying Service
Professional Shoppers
Invoice Price (or Seller’s Cost)
Dealer Holdback (or Dealer Rebate)
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17. Negotiation Negotiate your interest rate.
Get a firm price for the vehicle.
Negotiate the lowest possible APR through the dealer. Borrow elsewhere if the rate is lower.
Obtain a firm commitment on a trade-in allowance. Sell the vehicle yourself if the allowance is too low.
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18. Negotiation Negotiate your trade-in. High-Balling
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19. Make the Decision Finalizing a car deal. Low-balling Buyer’s order
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20. Evaluate Your Decision
Redress
Alternative Dispute Resolution Programs
Mediation
Lemon Laws
Small-Claims Court
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21. The Top 3 Financial Missteps In Big-Ticket Purchases
People slip up in when they do the following:
1. Rely upon the seller as their source of information for price, financial terms, and trade-in value.
2. Tell a seller what they can afford to pay so the seller can avoid disclosing his or her lowest price.
3. Don’t complain when products fail to perform as expected.
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22. Good Money Habits in Vehicle and Other Major Purchases
Think through all of your major purchases using the planned buying process.
When planning to buy vehicles, check repair ratings history in the April issue of Consumer Reports magazine.
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23. Good Money Habits in Vehicle and Other Major Purchases
Purchase late-model, high-quality used vehicles and check their ownership history at and recall history at
Obtain price information from at least three sources and aggressively negotiate prices and financing terms for major purchases.
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24. Good Money Habits in Vehicle and Other Major Purchases
Never tell a seller what payment you can afford.
Promptly and firmly seek redress when dissatisfied with purchases or services.
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