Buying and Owning a Vehicle
The Car-Buying Process
Most people are really excited when they buy their first car. Because it is a large purchase, buying an automobile should also involve taking the time to make a good decision – one that you won’t regret later. Following a decision-making model, such as the one presented in Chapter 20, may help you make better choices as you get ready to buy a car.
Identify Your Needs and Wants
Buying a car starts with identifying your needs (not just your wants). Start by asking yourself some basic questions, such as the following:
- What do I need to do with a car?
- How much will I drive? (Fuel efficiency may be an important consideration.)
- Do I plan to haul a number of people or gear?
- Will I take the car off-road?
- What features would I like to have on the vehicle?
Decide What You Can Afford
Before you start shopping for a car, determine how much you can afford to spend. One general guideline is that you can afford monthly payments of no more than 20 percent of the money you have left after paying all your regular monthly expenses, such as rent, utilities, credit and payments, and so on. Also figure into your budget the costs of maintaining your car as well as the costs of fuel and auto insurance.
Identify and Research Your Choices
Select several types of cars that would meet your needs. In the library or online, research the features of each possibility. Compare the features of the models you are considering against your list of wants and needs. Note the pros and cons of each model. Use your list and price range to narrow your choices to just a few that best fit you. When comparing prices, be sure to compare models that have the same options.
Decide Whether To Buy New Or Used
A primary decision is whether to buy a new car or a used one. Cost is a major factor in this decision. A new car is much more expensive. Also, a new car loses much of its marker value as soon as you drive it off the lot. A car can lose as much as 20 percent of its value in its first year. Buying a well-main-tained used car can save you money. On the other hand, a used car is more likely to need more repairs. Even if you have a mechanic check the car's overall condition before you buy it, a used car is still a bit of an unknown. You could be buying someone else's problems. A dealer may offer a used-car warranty that you would not get from an individual seller, but a dealer will typically charge more for the used car.
Decide How You Will Pay For It
preapproval- is the process of getting a new- or used-car loan prearranged through your bank or credit union
Preapproval separates financing from the process of negotiating the price of the car. It also allows you to compare total costs of buying, including credit rates.You may or may not actually take the preapproval loan, but at least you will know how much you can spend and the interest rate you can get before you shop for a car. To get preapproved, visit your credit union or bank and fill out an application.
Check Insurance Rates
Check out the insurance rates on your vehicle choices. If a car is rated as a "sports car," the cost of insurance may be much higher than for vehicles rated higher for safety and other features. A call to your insurance agent to get this information helps rule out choices that may result in insurance that is too high.
Search For Available Vehicle
Search your newspaper's classified ads and the Internet for cars available from dealers and from individual sellers in your area. Many areas offer a free print publication, such as Auto Trader, dedicated to used-vehicle listings. If your area has such a publication, you can probably find it in the lobby of car parts stores and various other neighborhood stores and restaurant.
Test Drive Vehicles
Sometimes descriptions are quite different from the actual car. Test drive the can of interest to you. Compare ride, handling, braking, features, and cost. Try all the features to see how well they work. Take your time. Don't be in a hurry when shopping for a car. Some sales persons will try to pressure you into buying right away. Resist the temptation. You will enhance your bargaining position with patience and knowledge of you car you are planning to buy. Experts recommend never buying a vehicle on your first visit to a dealership, and before buying, check the dealer's reputation.
Check The History Of A Used Vehicle
vehicle identification number (VIN) - an alphanumeric that identifies each vehicle manufactured or sold in the United States. This number is available on vehicle documents and on the dashboard on the driver's side. It is visible through the front windshield.
Get The Vehicle Checked Mechanically
vehicle emission test - which verifies that a vehicle meets the minimum clean-air standards
Determine A Fair Price
sticker price - or manufacturer's suggested retail price (MSRP), is the price shown on the tag in the car's window
invoice price - a fair price for a new car usually lies somewhere between the sticker price and the price the dealer paid for it
Negotiate The Price
car-buying service - allows you to choose the vehicle features you want, and a professional car buying takes over the price negotiation for you
Dealer Add-Ons
dealer add-ons - high-priced, high-profit, dealer services that add little or no value
Leasing A Car
Rather than purchasing a new car, you might consider leasing. A car lease is similar to an apartment lease. It is a written agreement that allows you to use the property (in this case, a car) for a specified time period and monthly payment.
Lemon Laws
lemon laws - exist in many states and protect consumers from the consequences of buying a defective car.
lemon - is a car with substantial defects that the manufacturer has been unable to fix after repeated attempts.
Financing Your Car
FTC rule - requires that dealers fully disclose to buyers what is and is not covered under warranty for the used vehicles
Costs Of Owning A Car
Most people spend more of their income on transportation than on any other item except housing. Costs of owning a car include the monthly car payment and car insurance (to be discussed in Chapter 26).
Fuel
hybrid - is a type of vehicle that uses alternate energy sources, such as natural gas or battery power, in addition to gasoline
Hybrids can get high miles per gallon while cutting the cost of operation substantially. As technology improves, you will see vehicles developed that use other types of energy, from electricity (with cars that recharge when plugged into your home outlets) to natural gas or eco-fuels that environmentally friendly.
Depreciation
depreciation - is a decline in the value of property due to normal wear and tear
classic cars - older vehicles
appreciate - increase in value
Depreciation is the single greatest cost of owning a car. The cost of gasoline comes second. In most cases, the age of a car is the most important factor in determining its resale or trade-in value. Other factors include mileage, mechanical condition, model popularity, size, and color. A car will retain more of its value over time if it is well maintained and has low mileage at the time of sale.
Registration and Title
car title - is a legal document that establishes ownership of the vehicle
A car title lists the legal owner (usually the lending institution) and the registered owner (you). You must pay title fees and sales taxes only at the time you buy the car.
car registration - or license tag fee
The license plate on your vehicle carries a sticker that shows you have paid the current year's renewal registration fee.
Vehicle Emission Fee
In many states, you are required to have your car tested to be sure it is meeting environment standards for vehicle emissions. Vehicle emissions tests are often required every two years once the car is four or more years old.
Maintenance and Repairs
The owner's manual will tell you what services your car needs and how often. Typically, you can expect to change the oil every few thousand miles, have a major engine tune-up every 20,000 to 30,000 miles, and perform other maintenance at scheduled intervals.
Extending The Life Of Your Car
Because a car is expensive, you will get your best value (cost versus benefit) if you take care of your investment. By performing routine maintenance, taking care of the interior and exterior, and practicing good driving habits, you can keep your car running well and looking good.
1. Maintain Fluid Levels
2. Perform Routine Maintenance
3. Keep Your Car In A Garage
4. Preserve The Exterior
oxidize - permanently lose its color and shine because of chemical reaction with the air
polishing compound - a substance that can smooth out surface scratches, scuffs, and stains
abrasives - coarse materials that scour or rub away a surface
car detail - a service provided by specialists who clean and polish the outside, along with cleaning and treating the interior
5. Preserve The Interior
upholstery - the seat-covering material
The following websites will assist you on buying and owning a vehicle:
Buying A Vehicle
How To Buy A Car
What You Need To Know When Buying A Car
Car Buying Guide
The Cost Of Owning A Car
Owning A Vehicle