buying a car

+

Buying a car

Ms. Perez

+Bell ringer

Pick and respond to one: What are the benefits of owning a car? What are some uses for a car? What are some reasons people would and would not

own a car?

+Sticker Price

Manufacturers list price

IS the sticker price the FINAL price on the car?

+NO!!!!

Example in a $20,000 dollar car, the invoice price (which is what the dealership pays) is about $15,000-$3000.

What does this mean?

+Where can you buy a car?

+Where can you buy a car?

New-Car dealerships Used-car dealerships Private parties

Newspapers, online, driving through town

+What are some things that you need to be careful of when you buy a car?

+On-lot inspection

Engine leaks Look under car for leaks of the oil, coolant or transmission

Exterior panels Rusk

Interior panels For water damage/signs of leaking

Tires Tire treads Having to get new tires isn’t a deal breaker BUT uneven wear could

reveal a more serious car problem

Odometer Tells you the mileage of the car

+

http://www.youtube.com/watch?v=NHIfyhDzZ8o

+Pick the BEST

Go to each station and pick out the best choice in cars.

+How can I afford a car?

+Loans and Financing

Credit Unions Banks Car Dealerships Should you get a loan before or after you decide on a

car?

+Payments

Down payment The higher the down payment the _________ the monthly

payments

Monthly Payments How much you pay monthly Depends on the repayment period

+Price points

Private sale price The price you could expect to get for this car if you sold it

yourself to another person

Trade-in price What the dealer would offer you in trade value

Retail price What you would expect to pay for this car at a used

dealership

Why do you think that there are different price points?

+How do you find how much you should pay with your car?

+Kelley Blue Book

Gives car value BASED ON Mileage Location Year Make Model Manufacturer’s Suggested Retail Price Dealers cost

+Given one of four ratings

Excellent Looks new Excellent mechanical condition Never had any paint or body work

+Good

Free of major defects No major mechanical issues Paint, body, and interior Little to no rust Most consumer owed vehicles fall into this category

+Fair

Some mechanical or cosmetic defects Needs servicing but is reasonable Paint, body, and or interior need work from a

professional Tires may need to be replaces Repairable rust repairs

+Poor

Severe mechanical and/or medical cosmetic defects Poor running condition Problems that can’t be readily fixed Mileage is poor

+What do you think the most important factor to buying a car is?

+Financing a car

How do you figure out the ACRUAL cost of a car? How do you figure out what your monthly payments

are?

+Steps to figuring out the actual cost in financing a car Lets say the car costs $13,000 You get a loan that is an interest of 10.25% for 4.5

years What should you do first?

+

Take the interest (10.25) and move the decimal over by 2.

Example .1025

Take that number and multiple it by the car cost.

Example .1025 X 13,000=1332.50, this is the COST of interest.

+

Add the cost of interest to the original car cost.   Example $14, 332.50, this number is the TRUE cost of

your car.

Then what?

+

Next take the length in years multiplied by the # of months in a year.

Example: 4.5X12=54-This is the # of payments you will make

Take the TRUE cost of your car and divide by the # of payments you will make

Example: 14,332.5/54=$265. 42, this is your monthly payment

+Table races

The car cost on the lot is $20,000 dollars The loan is 7% interest for 5.5 years What is the TOTAL cost of the car? What are the monthly payments?

+

.07 X 20,000= 14,000 14,000+20.000=21,400 5.5 X 12=66 21,400/66= 324.24

+

You car costs $50.000 Your interest is 15% for 4 years What is the TOTAL cost of the car? What are the monthly payments?

+

.15 X 50,000= 7,500 50,000 + 7,500= 57,500 4 X 12= 48 57,000/48= $1,197.92

+

The car costs $75,000 dollars The interest rate is 8% for the next 7 years What is the actual cost of the car? What are the monthly payments?

+

.07 X 75,000= 5250 75,000 + 5,250= $80,250 7 X 12=84 80,250/84= 955.34

+

The car costs $10,000 dollars The interest rate is 10% for the next 3 years What is the total cost of the car? What are the monthly payments?

+

.1 X 10,000= 1,000 1,000 + 10,000=11,000 3 X 12=36 11,000/36= 305.56

+

The cost of the car is $45,000 The interest rate is 9% for the next 5 years What is the total cost of the car? What are the monthly payments?

+

45,000 X .09= 4,050 4,050 + 45,000= 49, 050 5 X 12= 60 49.050/60= 817.50

+TOTD:

Does the length of the payments affect the price of the car? Why or why not?