Chapter 16Chapter 16

Buying and Owning a Vehicle

16.1 Buying a Vehicle16.1 Buying a VehiclePage 336Page 336

Can You Afford to Own a Vehicle?Purchase PriceDepreciation

FinancingOther Costs

What Kind of Vehicle Should You Buy?What Kind of Vehicle Should You Buy?Page 336Page 336

What will I use the car for?Do I need certain passenger and cargo capacities? Will I need to tow anything?

How many miles will I drive each year?Will I use the vehicle more for short trips or

long trips?How long will I expect to keep the vehicle?

Vehicle Size-Page 337Vehicle Size-Page 337

What to consider about vehicle size? Smaller, lighter vehicle usually gets better gas mileage but does not offer as much protection in a

collision as a larger, heavier vehicle. Smaller vehicles are easier to maneuver than

larger vehicles, especially when parking A larger vehicle provides a more comfortable ride

but is usually more costly to operate. A larger vehicle has a greater capacity for

passengers and parcels.

Optional Equipment-Page 337Optional Equipment-Page 337

What is optional equipment?Be aware, optional equipment will add to

the cost of the vehicle.

Leasing a Vehicle-Page 338Leasing a Vehicle-Page 338

What does it mean to lease a vehicle? At end of lease, you must choose one of the

following three options: Return the vehicle and lease another one.

Purchase the vehicle at a cost determined at the start of your lease.

Return the vehicle with no obligations to either lease another vehicle or purchase the vehicle you

returned.

Leasing Cont.-Page 338Leasing Cont.-Page 338

Leasing is not for everyone. Most lease agreements limit how many miles you can put on the vehicle. Extra miles are likely to cost you an additional charge.

Buying a used Vehicle-Page 339Buying a used Vehicle-Page 339

Warranty

How Much Should You Pay-Page 339How Much Should You Pay-Page 339

Blue-Book Prices

Choosing a Used Vehicle-Page 339Choosing a Used Vehicle-Page 339

Good mechanical condition.Was it ever involved in a collision, or needs

repair.When possible, talk to previous owner

about condition of vehicle and previous maintenance service that has be done on

vehicle.

Choosing Used Vehicle Cont.-Choosing Used Vehicle Cont.-Page 339-341Page 339-341

Outside and inside checks.Test Drive-When test driving a vehicle, drive vehicle on a rough road at 25 mph and

TURN RADIO OFF. The vehicle should not rattle or feel unsafe.

Have vehicle inspected.

16.2 Insuring a Vehicle-Page 34216.2 Insuring a Vehicle-Page 342

Financial responsibility lawWhat is it?

What is Vehicle Insurance-Page 342What is Vehicle Insurance-Page 342

Premium—A specified amount of money you pay for coverage over a specified

period of time, to the company.

Liability Insurance-Page 342Liability Insurance-Page 342

What is liability insurance?Liability insurance is the most important

type of insurance to have.Protects the driver who caused the collision.

Bodily-Injury Insurance-Page 342Bodily-Injury Insurance-Page 342

What is bodily insurance?Insurance that covers the driver who is at

fault against claims.

Property-Damage Insurance-Page 342Property-Damage Insurance-Page 342

What is property-damage insurance?Insurance that protects the driver who is at

fault against claims for damages to another person’s property, up to specified limits.

Medical Payment Insurance-Page 342Medical Payment Insurance-Page 342

What is medical payment insurance?Insurance that pays medical expenses for bodily injuries sustained by occupants in an

insured vehicle.

No-Fault Insurance-Page 342-344No-Fault Insurance-Page 342-344

What is no-fault insurance?Insurance that is recovered from your own

insurance company because of long delays in litigation no matter who is at fault.

Chart on Page 343Chart on Page 343

Collision Insurance-Drop after 7-10 years for new or expensive cars of ownership or

when value of car no justifies cost of coverages.

Comprehensive Insurance-Drop after 7-10 years of ownership for new or expensive

cars.

Collision Insurance-Page 344Collision Insurance-Page 344

What is collision insurance?Insurance that covers you if you are at fault

in a collision, or not able to collect from the person who is at fault.

What is a deductible?The amount you agree to pay towards the

repair or replacement of the vehicle.

Comprehensive Insurance-Page 344Comprehensive Insurance-Page 344

What is comprehensive insurance?Insurance that for pay for the replacement or repair of your vehicle if it is damaged for

some reason other than a collision.

Uninsured and Underinsured Uninsured and Underinsured Insurance-Page 344Insurance-Page 344What is uninsured insurance?

Insurance that protects you if you are struck by another vehicle whose driver has no

insurance.What is underinsured insurance?

Your insurance company will pay any costs that exceeds what the other person’s

company will pay as a result of a collision.

Insurance Rates-Page 344Insurance Rates-Page 344Factors that determine what you pay for Factors that determine what you pay for

InsuranceInsurance Driving Record

Age Miles Driven Driver Gender Martial Status

Type of Vehicle Where Driver Lives

Driver’s Claim Record

Reduced Premiums-Page 346Reduced Premiums-Page 346

Good grades in school and in some cases drivers who have completed a driver

education course.No claims or convictions for three years.

Multiple vehicles insured under same policy.

Vehicles with certain safety features like airbags and antitheft devices.

Assigned-Risk Insurance-Page 346Assigned-Risk Insurance-Page 346

What is assigned-risk insurance?Insurance provides bodily injury and

property damage liability coverage to high-risk drivers for a much higher premium.

Must drive violation free several years before can qualify for standard insurance.

16.3 Environmental Concerns-16.3 Environmental Concerns-Page 347Page 347

What are CFC’sCFC stand for chlorinated fluorocarbon.CFC’s are a freon gas located in the air

conditioners units of vehicles.CFC’s are effective in cooling air, but when

freon is released into the atmosphere, they break down the atmosphere’s ozone layer.

Mass Transportation-Page 349Mass Transportation-Page 349

Mass transportation is also known as mass transit.

What are some forms of mass transportation?

Car pooling or van pooling.

Alternative-Fueled Vehicles-Page Alternative-Fueled Vehicles-Page 350350

What is an example of an alternative- fueled vehicle?

Solar-powered vehicles.Capture light from the sun and transforms it

into electrical power.