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Chapter 16
Buying/Owning a Vehicle
What are some questions you should ask yourself before buying a vehicle?
What type is best for me? Operating expenses?
Insurance costs? Buy vs Lease
What's a fair price? What can I afford?
What features do I need?
Do I Really Need A Car?
Can I afford a car? Purchase price
(This is the largest expense)
maintenance, oil & gas, repairs,
insurance & license
(operating costs)
Am I mature enough for this
responsibility?
Factors in Selecting a Car
Safety
Air bags
Crash test stats
ABS brakes
Comfort
Size
Fuel efficiency
Buying a Used Car
Usually no warranty
Should test drive/checked by mechanic
Find Blue Book value (National Auto Dealer's Assoc Guide)
Leasing vs Buying
Leasing
paying for the "use" of a car
a new car every few years
Always have car payments
Financial penalties for high mileage
Buying
Paying for the purchase of a car
Can have some years where you have no car payments
Older cars have more repairs
Insurance
Basic Auto Insurance in NJ - $5000 property damages per accident/ $15,000 personal injury per accident
Protects you against major financial loss
Shop around- prices vary from company to company
Deductible- the amount you pay for damages
Depreciation - a steady drop in the value of the car
Types of Insurance
Liability - body & property
Comprehensive
Uninsured/underinsured
Collision
Medical-payments
Towing
No-fault
Liability
Bodily-injury : Pays for claims and lawsuits by people injured as a result of an auto accident caused by you
Property-damage: Pays for claims and lawsuits by people whose property is damaged as a result of an accident caused by you
Comprehensive
Coverage for damage to your car that is not a result of collision
Hit an animal/theft/vandalism/fire/flood
Uninsured/Underinsured
Pays for property damage or bodily injury if you are in an accident caused by an uninsured/underinsured motorist
Collision
Pays for damages to your vehicle caused by a collision with another car or object
Medical Payments
Pays for medical costs for you and your passengers who are injured
Some states have this because of court
backlogs. Your own insurance covers costs - regardless of who is at
fault.
No Fault
Insurance Rates
Determined by:
Driving record - convictions and moving violations pay more
Age - younger pays more usually under 25
More miles driven annually = higher premiums
Having safety & antitheft devices
Driver Gender- males tend to pay more however the gap is narrowing
Marital Status - married = lower premiums
Type of vehicle - some popular models tend to be stolen more often & some larger vehicles cause greater damage to vehicles they hit
Where you live - rural areas = less premiums
Claim record - more frequent claims = higher premiums
Assigned-Risk Insurance
High premium insurance available to those drivers who have had their insurance cancelled due to a poor driving record
Must drive for violation free for several years before qualifying for standard insurance
Helping the Environment
Mass transportation - moves large numbers of people from place to place - decreasing exhaust emissions
Car Pooling - sharing transportation
Solar and electric & hybrid powered vehicles