Researching an automobile_powerpoint_presentation

Researching an Automobile

What should I look for?

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© 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

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© 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

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© 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)

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© 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?

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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.

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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

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© 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