Transportation

Personal Personal FinanceFinance

Chapter 9Chapter 9

© EMC Publishing, LLC

Transportation ChoicesPublic Transportation

• Urban transportation–Mass transit

–Commuter service


Transportation ChoicesPublic Transportation

• Between cities–Amtrak

–Bus


Transportation ChoicesPrivate Transportation

• Bicycle



• Motorcycle / scooter



• Car / truck

What do you think?Discussion

© EMC Publishing, LLC© EMC Publishing, LLC

• What does it mean to go “green”?

• What public transportation options are there in your community?

• What is the opportunity cost of public transportation?

• Do you use public transportation? Why?


Private TransportationBuying a Car

• Narrow choice as to type of car

>



• Narrow choice as to type of car–Luxury / sports




–SUV / pickup truck





–Full-size • (not very popular;

gas guzzlers)





–Full-size

–Mid-size





–Full-size

–Mid-size

–Compact / mini





–Full-size

–Mid-size

–Compact / mini

–Hybrid (gas / electric)


Buying MY Car!Price $6,500

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price


Buying MY Car!

Price $6,500Taxes (6%) $390

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax

(most states)


Buying MY Car!

Price $6,500Taxes (6%) $390License / Reg. $125

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration


Buying MY Car!Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed


Buying MY Car!

Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015Finance (8.5%/3yrs) $596

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed–Finance charge


Buying MY Car!

Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015Finance (8.5%/3yrs) $596Total $7,611

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed–Finance charge–Total loan


Buying MY Car!

Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015Finance (8.5%/3yrs) $596Total $7,972Monthly pay. $211.42

Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed–Finance charge–Total loan–Monthly payment


Buying MY Car!

Monthly pay. $211.42

Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment


Buying MY Car!

Monthly pay. $211.42Insurance $175.12

Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance


Buying MY Car!

Monthly pay. $211.42Insurance $175.12Gas $175.00

Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas


Buying MY Car!

Monthly pay. $211.42Insurance $175.12Gas $175.00Maintenance $25.00

Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas–Maintenance

(oil, car wash, etc.)


Buying MY Car!

Monthly pay. $211.42Insurance $175.12Gas $175.00Maintenance $25.00Subtotal $586.54

Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas–Maintenance–Monthly subtotal


Buying MY Car!

Monthly pay. $211.42Insurance $175.12Gas $175.00Maintenance $25.00Subtotal $586.54

Emergencies $????

Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas–Maintenance–Monthly subtotal– Emergencies

(car repairs, etc.)


Which of the following costs of buying a car is not ongoing?

A. Purchase price

B. Insurance

C. Gas

D. Maintenance

E. License / registration


Which of the following costs of buying a car is not ongoing?

A. Purchase price

B. Insurance

C. Gas

D. Maintenance

E. License / registration


√

Private TransportationBuying a Used Car

• Shopping for a used car–Blue Book

–Depreciation

–Warranty• Used-Car Rule


Private TransportationBuying a Used Car• Where to look–Private owner (newspaper)–New-car dealer–Banks / finance (repo)–Rental-car agency–Used-car dealer–Online


Private TransportationBuying a Used Car• What to look for–Exterior– Interior–Test drive–VIN report–Mechanic evaluation–Clear title


Private TransportationBuying a New Car

• Warranty–Extended

– “Lemon” laws



• Invoice / sticker price–Never pay sticker• Research pricing

online at Edmunds.com (http://fin.emcp.net/edmunds)

–Exception “ordering car”

http://fin.emcp.net/edmunds



• Trade-in–NADA

(http://fin.emcp.net/nadaguides)

–Kelley Blue Book (http://fin.emcp.net/kbb)

–Dealer will give you less, but less hassle

http://fin.emcp.net/nadaguides

http://fin.emcp.net/nadaguides

http://fin.emcp.net/kbb

http://fin.emcp.net/kbb


Which of the following is not a suggestion to consider when buying a used car?

A. Conduct a VIN check.

B. Consult the NADA guide or Kelley Blue Book for the car’s value.

C. Have a mechanic look at the car for you.

D. Look for a lemon of a car.

E. Don’t buy from private sellers.


Which of the following is not a suggestion to consider when buying a used car?

A. Conduct a VIN check.

B. Consult the NADA guide or Kelley Blue Book for the car’s value.

C. Have a mechanic look at the car for you.

D. Look for a lemon of a car.

E. Don’t buy from private sellers.



• Do you think it is better to trade your car in to the dealer or to sell it on your own?

• What kinds of problems are there with selling a used car on your own?

• Should you accept someone’s personal check for your car? Why?

• What should you look for when buying a used car?



• Financing a new car–Loans (bank, credit union, finance company,

or dealer)

–Length of loan

–Cosigner


Private TransportationLeasing a New Car

• Advantages of lease–New car

–Payments usually lower

–Service included (usually)

–Many dealers quit leasing (Chrysler 2008)


Private TransportationLeasing a New Car• Disadvantages of lease–Don’t own (no equity)–Pay security deposit–Limited mileage– Insurance costs–Always have car payment–Can buy car at end of lease


Private TransportationProtecting Your Investment

• Maintenance–Tire tread



• Maintenance–Tire pressure



• Maintenance–Belts



• Maintenance–Hoses



• Maintenance–Washer fluid



• Maintenance–Coolant /

Anti-freeze



• Maintenance–Brake fluid

–Power-steering fluid



• Maintenance–Transmission Fluid

–Oil (change regularly to extend life of car)



• Arranging for repairs

• Driving for economy (http://fin.emcp.net/cartalk)

http://fin.emcp.net/cartalk

http://fin.emcp.net/cartalk


Which of the following is not an important maintenance tip to prolong the life of your car?

A. Check oil level often.

B. Check tire pressure often.

C. Check fluid levels often.

D. Check hoses.

E. Make sure radio volume is loud enough for you; if not, add speakers.


Which of the following is not an important maintenance tip to prolong the life of your car?

A. Check oil level often.

B. Check tire pressure often.

C. Check fluid levels often.

D. Check hoses.

E. Make sure radio volume is loud enough for you; if not, add speakers.



• Do you thinking leasing or buying is the better option? Why?

• Do you check the oil, brake fluid, hoses, and transmission fluid on your own car? Why?

• How do you make sure your mechanic is not “ripping you off”?


Transportation

Education

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