Researching an Automobile

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Researching an Automobile

• What should I look for?

2
Researching An Automobile

• Lesson Objectives
• Assess personal transportation needs
• Perform market research to determine which
  vehicle options are needs versus wants
• Compare the different automobile options that are
  available
• Estimate the total cost of owning a vehicle
• Understand consumer rights as defined by the
  lemon law

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Transportation

• Part of everyones life
• 15 20 of an individuals budget
• Automobile is the 2nd most expensive purchase,
  only after a home

4
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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Planned Buying Process

1. Prioritizing wants
2. Pre-shopping research
3. Fitting the budget
4. Comparison shopping
5. Negotiating
6. Making the decision
7. Evaluating the decision

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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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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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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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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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Price Research

• Price
• Base price vehicle price with standard
  equipment, no extra options
• MSRP Manufacturers suggested retail price
• Includes base price, price of options installed
  by manufacturer, and their transportation charge
• Sticker Price
• Dealers initial asking price

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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, Kiplingers Personal Finance
  magazine, and Edmunds 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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Vehicle Options Research

• General type of vehicle
• Car, truck, 2-door, SUV, sporty
• Make and model
• Examples 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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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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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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New vs. Used Research

• New Vehicle
• Not pre-owned
• Warranty
• Manufacturer options
• Wide selection
• Expensive
• Depreciation
• Loss in the vehicles 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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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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Fitting the Budget continued
Vehicle price is not the only cost involved

• Fixed expenses
• Depreciation
• Insurance costs
• Loan payment and interest if financed
• Parking fees
• Licensing
• Registration

• Flexible expenses
• Maintenance
• Gas
• Oil
• Repairs

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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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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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Comparison Shopping continued

• Goal of comparison shopping
• Narrow the choice even further to negotiate for
  the best deal

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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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Negotiating continued

• Keys to all negotiations
• Be able to say NO
• Take the purchase to another business

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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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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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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.
• All states have enacted lemon laws
• Specifics vary state-to-state and are in place to
  protect consumers

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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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Lemon Laws continued

• What should you do if you feel you have purchased
  a lemon?
• Contact the states attorney general office to
  request information on the states lemon laws and
  how to use them if they have purchased a lemon
• http//ago.mo.gov/

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Conclusion

• Before purchasing a vehicle, follow the planned
  buying process to avoid a costly mistake
• Prioritize wants
• Pre-shopping research
• Fit the budget
• Comparison shop
• Negotiate
• Make the decision
• Evaluate the decision

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Researching An Automobile

• Lesson Objectives Review
• Assess personal transportation needs
• Perform market research to determine which
  vehicle options are needs versus wants
• Compare the different automobile options that are
  available
• Estimate the total cost of owning a vehicle
• Understand consumer rights as defined by the
  lemon law

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Researching An Automobile

• Assignments
• Researching an Automobile worksheet 1.16.2.A1
• Part 1 What Do I Want/Need in a Vehicle
  worksheet 1.16.2.A2
• Part 2 What Types of Vehicles Fit My Needs?
  worksheet 1.16.2.A3
• Part 3 Comparison of Vehicles worksheet
  1.16.2.A4
• Part 4 Making Evaluating a Decision worksheet
  1.16.2.A5