1. CAR BUYING

2. 90% of people in our culture purchase things they can’t afford. To impress people they do not like. Don’t be one of them! Especially when you are buying a car.

3. Purchasing a Car Step 1 Step 1 Determine your needs: Determine your needs: Ask yourself – how are you going to use this car? Ask yourself – how are you going to use this car? How many people do you really want to drive around? How many people do you really want to drive around? Safety features, Gas mileage, Automatic transmission… Safety features, Gas mileage, Automatic transmission…

4. Purchasing a Car Cont. Step 2 How much can you afford? Step 2 How much can you afford? How much do you make? ____________ How much do you make? ____________ Assume you made $15 dollars an hour and worked 40 hours a week and your Federal income and State sales taxes equaled 30% of your gross income. Assume you made $15 dollars an hour and worked 40 hours a week and your Federal income and State sales taxes equaled 30% of your gross income.

5. The Real Numbers Budgeting Safe Percentages Charitable Gifts 10- 15% Charitable Gifts 10- 15% Savings 5-10% Savings 5-10% Housing 25-35% Housing 25-35% Utilities 5-10% Utilities 5-10% Transportation 10- 15% Transportation 10- 15% Food 5-15% Food 5-15% Clothing 2-7% Clothing 2-7% Medical/Health 5-10% Medical/Health 5-10% Personal 5-10% Personal 5-10% Recreation 5-10% Recreation 5-10% Debt 5-10% Debt 5-10% Take your net income and multiply that by.15=________ this is what you have to work with.

6. Things to watch out for Did you know that banks are poised to offer you approximately 30% of your gross income in the form of a car loan. Did you know that banks are poised to offer you approximately 30% of your gross income in the form of a car loan. Why???? Why????

7. Affording the Car Save up until you can purchase with cash. Save up until you can purchase with cash. Take out a personal loan Take out a personal loan Finance through the car company Finance through the car company Lease the car with out a down payment. Lease the car with out a down payment. Mom and Dad buy it. Mom and Dad buy it.

8. To Get A Car Loan You need to have a past credit history You need to have a past credit historyor You need to have someone co-sign. Someone who is willing to guarantee your ability to pay off the loan. If you fail to pay they are legally responsible for the sum of the loan and will have to pay it in full.

9. Purchasing a Car Cont. Step 3 Step 3 Do your research at home Do your research at home Use Consumer Reports to determine what cars meet your needs Use Consumer Reports to determine what cars meet your needs Use Kelley Blue Book to determine the value of the cars you have selected Use Kelley Blue Book to determine the value of the cars you have selected Use Safercar.gov to see if there has been a recall on your car or if there are a large amount of consumer complaints Use Safercar.gov to see if there has been a recall on your car or if there are a large amount of consumer complaints

10. Purchasing a Car Cont. Now where? Now where? Look online at various dealers and prices on the vehicles that you want to drive. Look at AutoTrader.com and Craigslist. Look online at various dealers and prices on the vehicles that you want to drive. Look at AutoTrader.com and Craigslist. Talk to friends, mechanics and owners of the same type of car but do not feel obligated. Talk to friends, mechanics and owners of the same type of car but do not feel obligated.

11. Car Fax - Step 3 Enter the VIN (vehicle identification number) http://vin.carfax.com Enter the VIN (vehicle identification number) http://vin.carfax.comhttp://vin.carfax.com This will give you the history of the vehicle you are interested in. This will give you the history of the vehicle you are interested in.

12. Ready to Buy? Check out http://www.edumunds.com/tco.html Check out http://www.edumunds.com/tco.html http://www.edumunds.com/tco.html To find the true cost of the car you want to purchase. Edmunds will compute car maintenance, fuel, insurance, taxes and more. To find the true cost of the car you want to purchase. Edmunds will compute car maintenance, fuel, insurance, taxes and more. Make sure you check if your new car changes your insurance rate. Make sure you check if your new car changes your insurance rate.

13. But I Really Want a New The sales associate suggested leasing as a way to get into a new car with out all the risks. The sales associate suggested leasing as a way to get into a new car with out all the risks.

14. Do the Math New cars paid with cash results in $82.00 profit New cars paid with cash results in $82.00 profit New cars financed result in $775.00 profit New cars financed result in $775.00 profit New cars leased result in $1,300.00 profit New cars leased result in $1,300.00 profit What would you sell?! What would you sell?!

15. Do the Math The Break Down If you (rent) lease a car with a value of $22,000 for three years, and then turn it in the car is only valued at $10,000, someone has to cover the $12,000 loss. If you (rent) lease a car with a value of $22,000 for three years, and then turn it in the car is only valued at $10,000, someone has to cover the $12,000 loss. Your lease payments are designed to cover the $12,000 in 36 months plus a profit this will equal over $333.00 a month. Your lease payments are designed to cover the $12,000 in 36 months plus a profit this will equal over $333.00 a month. Bargain?!?! Bargain?!?!

16. Did You Know? The Auto Industry does not have to disclose the amount of interest they are charging you with a lease. The Auto Industry does not have to disclose the amount of interest they are charging you with a lease. This is usually monitored by the FTC but they don’t have the power here because you are “renting” not purchasing your car. This is usually monitored by the FTC but they don’t have the power here because you are “renting” not purchasing your car. The average leasing interest rate is 14% The average leasing interest rate is 14%

17. Don’t Forget the Tiny Numbers If you go over the allotted miles you are charged around 10-17 cents a mile. If you go over the allotted miles you are charged around 10-17 cents a mile. Excessive wear and tear will penalize you too. Option to purchase fee, doc fee, tire fee and the early termination fees. Excessive wear and tear will penalize you too. Option to purchase fee, doc fee, tire fee and the early termination fees.

18. To Keep You Coming Back! Dealerships will offer to roll in the charges for your last car into a brand new “beauty”, for only an extra $13.00 a month…What a deal…

19. The Excuses

20. It Comes with a Warranty Some people want to buy or lease a new car for the warranty. Some people want to buy or lease a new car for the warranty. Consumer Reports conducted a study and found 55% of those that purchased an extended warranty did not use it during the lifetime of the warranty. Consumer Reports conducted a study and found 55% of those that purchased an extended warranty did not use it during the lifetime of the warranty. Among survey participants who used their policy, the median out-of-pocket savings on repairs covered by extended warranties for all brands was $837. Based on a $1,214 average initial cost, that works out to a net loss of more than $375. Among survey participants who used their policy, the median out-of-pocket savings on repairs covered by extended warranties for all brands was $837. Based on a $1,214 average initial cost, that works out to a net loss of more than $375.

21. The Price of, peace of mind. If you do buy an extended warranty make sure you… Don’t buy under pressure. Dealers often try to sell the convenience of rolling coverage into a new-car loan, but that means you may be paying up front for coverage that you already have with the factory warranty. Don’t buy under pressure. Dealers often try to sell the convenience of rolling coverage into a new-car loan, but that means you may be paying up front for coverage that you already have with the factory warranty. Don’t be afraid to bargain. Don’t be afraid to bargain. You can save about $325 on average. You can save about $325 on average.

22. Go all in. There is little difference in cost between limited and bumper-to-bumper coverage, which is more likely than powertrain plans to include reimbursement for towing, travel expenses, and a rental car. If you’re going to buy, get the full protection. Go all in. There is little difference in cost between limited and bumper-to-bumper coverage, which is more likely than powertrain plans to include reimbursement for towing, travel expenses, and a rental car. If you’re going to buy, get the full protection. Read the small print. Before signing, be sure you understand what is covered and where you can take your car for authorized service. Read the small print. Before signing, be sure you understand what is covered and where you can take your car for authorized service.

23. It is said The car payment is the curse of the middle class. How about trying something different? The car payment is the curse of the middle class. How about trying something different?

24. Sources Created By: Chantel Sukraw Created By: Chantel Sukraw Dave Ramsey’s Dave Ramsey’s Total Money Makeover Total Money Makeover Financial Peace Financial Peace Bank of America Bank of America http://www.bankrate.com http://www.bankrate.com http://www.bankrate.com Kiplinger report Kiplinger report http://www.consumerreports.org/cro/magazine/2014/04 /extended-warranties-for-cars-are-an-expensive- game/index.htm http://www.consumerreports.org/cro/magazine/2014/04 /extended-warranties-for-cars-are-an-expensive- game/index.htm http://www.consumerreports.org/cro/magazine/2014/04 /extended-warranties-for-cars-are-an-expensive- game/index.htm http://www.consumerreports.org/cro/magazine/2014/04 /extended-warranties-for-cars-are-an-expensive- game/index.htm