Consumer Education

Chapter 12

Transportation

12.1 Transportation BasicsOptions for Transportation:

• Bicycle: – Inexpensive. Used bikes: $25. Average cost for new bikes:

$200-$300.

– Make sure you purchase the right bike for the type of riding, usually to be used on street.

• Inline Skates: – Inexpensive. $29-$150.

– Learn how to use them properly and chose the right ones. Hard wheels last longer but don't grip as well. Try medium. Boots should fit more snuggly than street shoes.

• Motorcycle: – Less expensive than a car (to buy and maintain) but still a

bit pricy. Need motorcycle license. More likely to have a fatal injury than in a car. Try to take a training course if inexperienced.

Safety First!

• Bike– Helmet

• Inline Skates – Helmet

– Wrist Guards

– Knee/Elbow Pads

• Motorcycle– Full faced helmet

Public Transportation(Bus, Streetcars, Subway, Trains, Taxis)

• Cost: inexpensive. don't have to pay for gas and repairs. no parking fees. Convenience: goes to the most popular destinations. don't have to find a parking spot.

• Speed: no traffic on subways and trains. some large cities have bus lanes to bypass traffic. –

• Other Benefit: helps environment because it reduces air pollution.

• When available, carpool, which is an arrangement to share private transportation. (usually people within your neighborhood)

12.2 How to Choose a Car

• Should You Buy a Car?

• Vehicle = 2nd most expensive purchase

• Affordable car loan = 20% of take-home pay

• Do not forget cost of insurance, gas, and maintenance

• Can you afford it?

Factor NEW USED

Reliability Fewer problems; warranty

Warranty from dealer only

Cost Much more expensive. Lose value; have to sell for less

Loss of value = buy for less than it’s worth

Mileage(Odometer-a measure of wear)

More repairs; most likely save in long run.

How to Choose a Car

• Consider: styles, sizes, features, options, warranties, safety

• Be realistic; fit life style

• Prioritize

• Features-characteristics of a particular model of car that offer benefits to the owner

• Options- features that you can choose to include or not include on the car

How to Evaluate a Used Car(Look/Check for:)

• Mismatched paint (accident)

• Rust (everywhere)

• Strains on upholstery/carpeting and mold

• Controls/lights

• Fluid drips

• No pulling

• Brakes

• Grinding/slipping of gears

• Blue smoke from tailpipe = oil problem

• Transmission fluid

12.3 To Buy or Lease?• Buying on credit can result in lower interest rates

• Watch ads and look for rebate offers (rebate- a partial refund of the purchase price) IMPORTANT: do the math because sometimes rebates will end up costing more.

Leasing (renting automobiles): Steps involved in Leasing.

• 1.) Negotiate the Price of the Car

• 2.) Know the Residual Value

• 3.) Down Payment and Security Deposit

• 4.) Financing

• 5.) Before You Return Your Lease Car

• 6.) Return Your Lease Car

Should You lease?

You probably shouldn't lease if you...

• can pay cash for the car you want

• drive many miles in a year

• keep cars for many years

• are particularly hard on your car

After you negotiate a price…

• financing and insurance is next. Financing can be done at your bank or with the dealer. Insurance comes in many common policies.

• Accidental Death and Dismemberment: pays off the balance of your lease or loan if you accidentally die or are dismembered.

• Gap Protection: pays the difference between what you owe and what your car is worth if it is totaled in an accident.

• Extended Warranty Protection: extended the manufacturer's warranty on certain parts and services. *check out the company you would be buying it from*

Final Step:

The Sales Contract Includes...

• Cash price

• Principal amount financed

• Down payment

• Finance charge

• Unpaid cash balance

• Total cost of the loan

• Insurance premiums

• Payment schedule

• Other costs

• READ EVERYTHING BEFORE YOU SIGN

12.4 The Car-Buying Process

• Determine a Fair -- Price Check List– Know what you want

– What you can afford

– How to finance

• Know invoice price

• Sticker price is normally 9-11% above invoice

• Trade-ins get less $

• Invoice Price-amount the dealer paid to buy the car from the manufacturer

• Sticker Price-price tag detailing prices of car’s options and the total price

The Buying Process

• Go to several dealers

• Ask experienced car buyers

• Other options-No haggle dealers; internet

• Shop towards end of the month (salespeople = more desperate)

• Shop in colder climates (August/December)

• Examine first, then drive

How to Negotiate the Deal

• Remember: You’re in charge (don’t feel pressured or threatened)

• Don’t tell them the price you can afford

• First offer should be a little above invoice price (do not reveal target price)

• Additional charges: sales tax, destination fee, license and registration, documentation fee

• Read all Paperwork

12.5 How to Maintain a Car• Maintenance Every Car Needs

– Learn how it works (read owner’s manual)– Regularly check tires, oil, and other fluids– Tune-ups, brakes, and routine checks are important

• Repair Services– Choose a repair shop by:

• Getting recommendations• Checking them out• Building a relationship

– When something is wrong with your car• Describe the problem• Get and estimate• Keep in mind guarantees• Check and pay for repairs• Save receipts

– If you’re not satisfied• Talk with manager• Ask Better Business Bureau• Small claims court

Rebuilt/Reconditioned-used parts that were repaired or restored to working order

Lemon Check List

• Defect cannot be fixed after three or four attempts

• Continued major problems that keep it in the shop for 30 days during the warranty period

• Numerous major problems

• Lemon Laws-protect consumers who buy defective new cars