1. The Car-Buying Process Transportation

2. Should you buy a car?  Can you afford it? - Car payment should be no more than 20% of your take-home pay. But don’t forget car insurance, gas, and maintenance. - You should look at your overall budget, then decide what kind of car payment you can afford.

3. New or Use?  New or Used? - Reliability – new most reliable, fewer mechanical problems. Usually comes with a warranty. - Cost – average new car cost around $20,000. You are going to need @ 20% down. ($4,000) * New cars lose value as soon as you drive off the lot. * Average loss is about 25% each year you own the car. - Mileage – on a used car the mileage can determine the value of the car. (more miles, more wear and tear, and more potential repair costs )

4. How to Choose a Car?  What class of car? - Economy size - Midsize - Full-size - Luxury - Sports Utility - Mini Van - Sports Car - Truck  Which Model? -Within each class there are different types of models. -Look online at each  Features and Options - Features: characteristics of a particular model of car that offer benefits to the owner. - Options: features you can choose to include or not include on the car.

5. Features and Options –Air Conditioning –Sunroof –Convertible Top –Automatic/Manual Transmission –Cruise Control –Leather Interior –Cup Holders –Number of Doors –Power Locks, Windows, Seats –Airbags (driver, passenger) –Anti-lock Brakes –Anti-theft Package –Sound System

6. Additional Features and Options  Dealers Options (in their shop) - Rust proofing - Special paint sealers - Protect upholstery  Extended Warranties - Basic warranty usually last 3 years or 36,000 miles - Could have it extended for an additional price  Safety Features - Check Consumer Reports for safety rating - Watch for safety bag recommendations

7. How to Evaluate a Used Car  Look for mismatched paint and panels. This indicates an accident.  Check for rust. Look in less obvious places.  Look for stains on the upholstery and the smell of mold.  Look for fluid drips.  Check all controls and lights.

8. Finance Options  Credit  80% of those who buy a car use credit to finance.  Separate Bank vs. Auto Manufacturers  Offer promotions or special rebates at dealers  Rebate : partial refund of the purchase price.

9. Determine a Fair Price… Invoice Price – the amount the dealer paid to buy the car from the manufacturer. –Know this price ahead of time. –Look at Edmunds, Kelly Blue Book, Microsoft CarPoint –You can call Consumer Reports 1-800-348-2028 and get a full report of a specific car. Gives you dealer cost, available options, current rebates and other incentives.

10. Price Continued… Sticker Price – Price tag in the window detailing the car’s options and total price. –This is the MSRP (Manufacturer’s Suggested Retail Price) –This is almost always higher than what the dealer expects consumers to pay for the car. –Usually 9 to 11% above invoice price.

11. Price Continued… A fair profit for the dealer is about 3% of the invoice price of the car plus options. Invoice price + Options = Adjusted invoice + 3% = Fair price Determine the value of a trade in before you go into the dealer.

12. The Buying Process Where to Shop –No Haggle Dealers –Buying on-line When to Shop –End of the month commission –Cold climates and winter months –New model year (September) dealers might have more incentives to offer for previous year models. –August and December are really slow months

13. The Buying Process Continued… Test Drives (Don’t talk about price) –Examine First Check everything inside and out –Then Drive Focus on the car, listen carefully, try it in different situation. Test its acceleration, braking, shifting and handling as you normally drive.

14. How to Negotiate the Deal Always remember you are in charge Don’t allow them to pressure you BE PREPARED TO WALK OUT! Don’t tell the salesman the price or monthly payment you can afford Let the salesman know you are aware of the invoice price, price of the options, and rebates/incentives.

15. Negotiation Continued… Let them know you intend to shop around for the best deal You will come back later if the price is the lowest NEGOTIATE ON PRICE ALONE, NOT MONTHLY PAYMENT! Negotiate the value of the trade in separately. Be firm!

16. Round 1 Make your first offer at just a little above invoice, but below your target price. Do not make another offer until you get a counteroffer. Counteroffer should be below sticker. If not, stick to your first offer. No matter what the counteroffer is respond by saying your initial offer was fair, and you would pay it today.

17. Round 2 Your next offer should be slightly higher, but still below your target price. Wait for a counteroffer. Keep the process until you reach closer to your target price. Could depend on Supply and Demand

18. The Final Price After you settle you still can expect to pay a few additional charges. –Sales Tax –Destination Fee (shipping) –License and Registration –Documentation Fee ($50-$100) –No administrative or advertising costs –Always read over the paper work, and ask questions! Make sure every amount in paper work was agreed upon.