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Researching an Automobile
What should I look for?
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Transportation Part of everyone’s life 15 – 20% of an
individual’s budget Automobile is the 2nd most
expensive purchase, only after a home
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Want to Buy a Vehicle? Consumers should plan their
vehicle purchase to avoid any costly mistakes
Any large purchases should be planned
Places to purchase a vehicle:•Dealership, private owner, internet
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© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Planned Buying Process
1. Prioritizing wants2. Pre-shopping research3. Fitting the budget4. Comparison shopping5. Negotiating6. Making the decision7. Evaluating the decision
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 1 - Prioritizing Wants
Assess transportation needs and wants•Need: something thought to be a necessity
•Want: something unnecessary but desired Consider all automobile options as wants
•Prioritize the wants from low to high priority
•Prioritizing wants helps the consumer•Consider costs and benefits of different vehicle
options
•Consider the “big picture” of the vehicle purchase rather than a specific want (such as heated seats, color, engine size, etc)
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Prioritizing Wants – Questions to Think About
How will the vehicle be used? Where will the buyer be
living? How will the vehicle be
stored or parked? How much will it be driven? What options would the
buyer like in the vehicle?
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 2 – Pre-shopping Research
Research should be based on transportation wants
Complete this before visiting a car dealership or salesman
Helps the buyer to be informed about:•What they are looking for
•Vehicles in their price range
•Available options
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Ways to Perform the Research
Family & friends•Experiences with
different makes and models of different vehicles
•Likes, dislikes, and recommendations
Periodicals•Consumer Reports
•Federal Citizen Information Center
•Kelley Blue Book
•Motor Trend
•Car and Driver Access this information
at the public library and/or the internet
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Price Research Price
•Base price: vehicle price with standard equipment, no extra options
•MSRP: Manufacturer’s suggested retail price•Includes base price, price of options installed
by manufacturer, and their transportation charge
•Sticker Price•Dealer’s initial asking price
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Price Research continued
Price continued•Determine how much a dealer paid to
help decide which vehicles to consider and to negotiate a fair price•Consumer Reports, Kiplinger’s Personal
Finance magazine, and Edmund’s New Car Prices
•Used cars•Blue book price: dollar value given to the
vehicle based on its year and model
•Used as a guide for car dealers and banks for pricing trade-ins
•Kelley Blue Book
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Vehicle Options Research
General type of vehicle•Car, truck, 2-door, SUV, sporty
Make and model•Ford Taurus, Honda Accord
Safety•Braking and emergency handling, airbags
Reliability•Some specific models have high marks, may be
higher priced but will save on repair costs
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 12Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Vehicle Options Research continued
Fuel economy•Type of gas used, gas mileage
Power and performance•Driving on highways, steep hills,
mountains, snow, muddy roads, or in a city
Comfort and convenience•Size of headroom and legroom, cargo
space
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 13Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Vehicle Options Research continued
Insurance•Chosen vehicle affects the price of
insurance; obtain a quote for the vehicles being considered
Other options•Power steering and brakes, manual or
automatic, air conditioner, rear-window defogger, radio/tape/CD player, type of tires, cruise control, sun roof, heated seats, power door locks and windows, etc.
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 14Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
New vs. Used Research New Vehicle:
•Not pre-owned
•Warranty
•Manufacturer options
•Wide selection
•Expensive
•Depreciation•Loss in the vehicle’s
value due to time and use (greatest cost)
Used Vehicle:•Cost less to buy
•Cost less to insure
•Avoid rapid deprecation
•Wide selection
•May offer warranty
•Returned leased cars
•Have an independent mechanic inspect any used car before purchase
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 15Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 3 – Fitting the Budget
“Can I afford it?”•Most important question
Amount the buyer can afford in his/her budget dictates the vehicle price
All costs must be taken into consideration before choosing a vehicle
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 16Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Fitting the Budget continued
Fixed expenses•Depreciation
• Insurance costs
•Loan payment and interest if financed
•Parking fees
•Licensing
•Registration
Flexible expenses•Maintenance
•Gas
•Oil
•Repairs
*Vehicle price is not the only cost involved
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 17Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 4 – Comparison Shopping
Comparing services or products to determine the best buy or quality product at a fair price
Allows the consumer to build upon the information learned in the pre-shopping research
*As the price of a vehicle increases, consumers are often not buying additional safety, capacity, or power, but instead style and prestige
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 18Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Comparison Shopping continued
Narrow the choices to a few specific makes and models with desired options
Visit the appropriate store to learn more information about each choice to make comparisons•Inquire about price, dealer incentives,
financing options, leasing, warranties, and service contracts
Test drive each potential vehicle
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 19Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Comparison Shopping continued
Goal of comparison shopping•Narrow the choice even further to
negotiate for the best deal
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 20Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 5 - Negotiating Process of deciding the actual terms
of the purchase and agreement between the seller and buyer
Obtain a firm price before discussing any other aspects including a trade-in
Compare prices from different dealers•Let them know you have done your
research and whether their price is high
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 21Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Negotiating continued Keys to all negotiations
•Be able to say NO
•Take the purchase to another business
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 22Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 6 – Making the Decision
The best place to decide on which vehicle to purchase is NOT the showroom where you are around the dealer•Take the information home to compare
all options After making the decision, return to
the dealer to close the sale
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 23Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Step 7 – Evaluating the Decision
Think about the things which went well and what did not•This will be helpful the next time a similar
purchase is made If the process was successful and you are
happy, compliment the seller If you have a complaint, make the
complaint known to the seller then move to the supervisor if necessary
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 24Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Lemon Laws Lemon
•A vehicle in and out of the repair shop with problems monthly
An estimated new 150,000 vehicles sold each year are lemons.
•Money Troubles, 2001, Leonard
All states have enacted lemon laws•Specifics vary state-to-state and are in
place to protect consumers
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 25Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Lemon Laws continued To fall under the lemon law
•New vehicle must have a substantial defect which cannot be fixed in a reasonable time
•Defect remains unfixed after four repair attempts or the vehicle remains in the repair shop for a total of 30 days
This allows the consumer the right to a refund or a new vehicle
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 26Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Lemon Laws continued What should you do if you feel you
have purchased a lemon?•Contact the state’s attorney general
office to request information on the state’s lemon laws and how to use them if they have purchased a lemon
1.16.2.G1
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 27Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Conclusion Before purchasing a vehicle, follow the
planned buying process to avoid a costly mistake
1. Prioritize wants2. Pre-shopping research3. Fit the budget4. Comparison shop5. Negotiate6. Make the decision7. Evaluate the decision