CHAPTER 28CARS &

THE CONSUMER

What should you look for? Safety

Insurance Institute for Highway Safety Price

Edmunds, Kelly Blue Book, NADA, Carfax

All cars have a VIN (Vehicle Identification Number) Quality

Consumer Reports Warranty

What does it cover? Bumper-to-bumper? Powertrain?

Sex appeal Fuel Economy Fueleconomy.gov

What to expect Federal law requires that all dealerships provide a pamphlet

with their cars to detail safety features of cars No one pays (or should pay) the sticker price for a car

Rebates Incentives Cool stuff in the car Discounts Haggling

The Federal Trade Commission requires that all used car dealers place a “Buyer’s Guide” sticker in the car’s window Does the car come with a warranty?

If not, it must be listed as “As-is. No warranty” Before you buy a car, you should have a mechanic you trust

to look at the car. If the dealer is weary of allowing you to do this, DON’T BUY FROM

THEM Car warranties are important and you must keep up with

scheduled maintenance to keep it valid

Financing Unless you have the money with you at the time of purchase, you

must get your car financed You do NOT have to purchase financing from the dealer you buy the car

from Car dealerships make a ton of money off of this Go to a bank first to get your financing

The type of loan (i.e. how good is it) is determined by The type of car you are loaning

Interest rates are usually lower on new cars Your FICO score

You get loans from Banks Finance Companies (i.e. Quicken Loans Arena) Credit Unions

Two important things to consider for a loan APR Duration of the loan

NEVER TELL A CAR SALESPERSON HOW MUCH YOU CAN AFFORD A MONTH Your concern is a bottom-line price

What the cost of the car is

Insurance is also a key When you buy a car, how much your

insurance is should play a huge role in the decision to buy

Everything from the color of the car, to the make and model year, to the safety/anti-theft features play a role in the price

Before you buy a car, call your insurance agent with the VIN to get a good estimate as to what you will pay

Leasing It’s like renting a car. . .for 2-4 years

You have monthly payments You also have a yearly mileage requirement

Issues of wear and tear become key Lease or buy?

Why lease? Upfront costs are low You get a new car every few years

Why NOT lease If you drive a lot, it could be a problem You always have a car payment

C 2H 9APTERHousing and the Consumer

Housing

A mortgage is a home loan The bank owns the deed (legal receipt) of

the house Usually a 15-30 year mortgage

Tenants (renter) pays the landlord (owner)

Leasing Contract to rent

Specifies the amount to be paid Specifies the term

You should inspect the property before you rent You should also check the contract you are

signing A lease application must be filled out

Name, age, address, place of employment, source of income and previous residences

This is where they check your credit

Types of leases Month-to-month leases are for people who

plan on living in a certain area for a short period of time Almost always more expensive

Tenancy at will Tenant moves in with the understanding that the

lease is for an indefinite period of time Tenant can leave at any time

Tenancy for years Lease is 6 months to a year In this way, the tenant and the landlord are

protected

Negotiations with landlords Knowing the area you will be in really helps out

If there is a high supply of places to rent, but a low demand, the renter is in a good position

If there is a high demand and a low supply, the landlord has the advantage

When you sign a standard lease, the landlord is at an advantage Pay your rent, or get evicted

Make sure you get the payment date in writing Generally, landlords cannot raise rent during the term of the

lease. . .however Sometimes leasing contracts have provisions to raise the rent

due to variable costs i.e. utilities or other maintenance fees

Rent controlled apartments Law limiting the amount of rent you put on a property

Keep it up Most states make laws requiring landlords to maintain

properties to basic living standards Warranty of habitability

Landlord promises to provide a place that is fit for human habitation

Housing codes are minimum standards needed to be upheld for living standards

Tenants must notify the landlord when repairs are due A residence is a residence

You can’t use it as a business “Zoned” for business purposes

Leases can specify the maximum number of tenants allowed

Leases can also specify what is to be done if there are damages to an apartment If damages are committed, it is known as waste