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Personal Personal FinanceFinance
Chapter 9Chapter 9
© EMC Publishing, LLC
Transportation ChoicesPublic Transportation
• Urban transportation–Mass transit
–Commuter service
© EMC Publishing, LLC
Transportation ChoicesPublic Transportation
• Between cities–Amtrak
–Bus
© EMC Publishing, LLC
Transportation ChoicesPrivate Transportation
• Bicycle
© EMC Publishing, LLC
Transportation ChoicesPrivate Transportation
• Motorcycle / scooter
© EMC Publishing, LLC
Transportation ChoicesPrivate Transportation
• Car / truck
What do you think?Discussion
© EMC Publishing, LLC© EMC Publishing, LLC
• What does it mean to go “green”?
• What public transportation options are there in your community?
• What is the opportunity cost of public transportation?
• Do you use public transportation? Why?
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car
>
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car–Luxury / sports
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car–Luxury / sports
–SUV / pickup truck
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car–Luxury / sports
–SUV / pickup truck
–Full-size • (not very popular;
gas guzzlers)
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car–Luxury / sports
–SUV / pickup truck
–Full-size
–Mid-size
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car–Luxury / sports
–SUV / pickup truck
–Full-size
–Mid-size
–Compact / mini
© EMC Publishing, LLC
Private TransportationBuying a Car
• Narrow choice as to type of car–Luxury / sports
–SUV / pickup truck
–Full-size
–Mid-size
–Compact / mini
–Hybrid (gas / electric)
© EMC Publishing, LLC
Buying MY Car!Price $6,500
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price
© EMC Publishing, LLC
Buying MY Car!
Price $6,500Taxes (6%) $390
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax
(most states)
© EMC Publishing, LLC
Buying MY Car!
Price $6,500Taxes (6%) $390License / Reg. $125
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration
© EMC Publishing, LLC
Buying MY Car!Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed
© EMC Publishing, LLC
Buying MY Car!
Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015Finance (8.5%/3yrs) $596
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed–Finance charge
© EMC Publishing, LLC
Buying MY Car!
Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015Finance (8.5%/3yrs) $596Total $7,611
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed–Finance charge–Total loan
© EMC Publishing, LLC
Buying MY Car!
Price $6,500Taxes (6%) $390License / Reg. $125Subtotal $7,015Finance (8.5%/3yrs) $596Total $7,972Monthly pay. $211.42
Private TransportationBuying a Car• Estimate cost to buy car–Purchase price–Sales tax–License / registration–Total borrowed–Finance charge–Total loan–Monthly payment
© EMC Publishing, LLC
Buying MY Car!
Monthly pay. $211.42
Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment
© EMC Publishing, LLC
Buying MY Car!
Monthly pay. $211.42Insurance $175.12
Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance
© EMC Publishing, LLC
Buying MY Car!
Monthly pay. $211.42Insurance $175.12Gas $175.00
Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas
© EMC Publishing, LLC
Buying MY Car!
Monthly pay. $211.42Insurance $175.12Gas $175.00Maintenance $25.00
Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas–Maintenance
(oil, car wash, etc.)
© EMC Publishing, LLC
Buying MY Car!
Monthly pay. $211.42Insurance $175.12Gas $175.00Maintenance $25.00Subtotal $586.54
Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas–Maintenance–Monthly subtotal
© EMC Publishing, LLC
Buying MY Car!
Monthly pay. $211.42Insurance $175.12Gas $175.00Maintenance $25.00Subtotal $586.54
Emergencies $????
Private TransportationBuying a Car• Estimate cost to maintain car–Monthly payment– Insurance–Gas–Maintenance–Monthly subtotal– Emergencies
(car repairs, etc.)
© EMC Publishing, LLC
Which of the following costs of buying a car is not ongoing?
A. Purchase price
B. Insurance
C. Gas
D. Maintenance
E. License / registration
© EMC Publishing, LLC
Which of the following costs of buying a car is not ongoing?
A. Purchase price
B. Insurance
C. Gas
D. Maintenance
E. License / registration
© EMC Publishing, LLC
√
Private TransportationBuying a Used Car
• Shopping for a used car–Blue Book
–Depreciation
–Warranty• Used-Car Rule
© EMC Publishing, LLC
Private TransportationBuying a Used Car• Where to look–Private owner (newspaper)–New-car dealer–Banks / finance (repo)–Rental-car agency–Used-car dealer–Online
© EMC Publishing, LLC
Private TransportationBuying a Used Car• What to look for–Exterior– Interior–Test drive–VIN report–Mechanic evaluation–Clear title
© EMC Publishing, LLC
Private TransportationBuying a New Car
• Warranty–Extended
– “Lemon” laws
© EMC Publishing, LLC
Private TransportationBuying a New Car
• Invoice / sticker price–Never pay sticker• Research pricing
online at Edmunds.com (http://fin.emcp.net/edmunds)
–Exception “ordering car”
© EMC Publishing, LLC
Private TransportationBuying a New Car
• Trade-in–NADA
(http://fin.emcp.net/nadaguides)
–Kelley Blue Book (http://fin.emcp.net/kbb)
–Dealer will give you less, but less hassle
© EMC Publishing, LLC
Which of the following is not a suggestion to consider when buying a used car?
A. Conduct a VIN check.
B. Consult the NADA guide or Kelley Blue Book for the car’s value.
C. Have a mechanic look at the car for you.
D. Look for a lemon of a car.
E. Don’t buy from private sellers.
© EMC Publishing, LLC
Which of the following is not a suggestion to consider when buying a used car?
A. Conduct a VIN check.
B. Consult the NADA guide or Kelley Blue Book for the car’s value.
C. Have a mechanic look at the car for you.
D. Look for a lemon of a car.
E. Don’t buy from private sellers.
What do you think?Discussion
© EMC Publishing, LLC© EMC Publishing, LLC
• Do you think it is better to trade your car in to the dealer or to sell it on your own?
• What kinds of problems are there with selling a used car on your own?
• Should you accept someone’s personal check for your car? Why?
• What should you look for when buying a used car?
© EMC Publishing, LLC
Private TransportationBuying a New Car
• Financing a new car–Loans (bank, credit union, finance company,
or dealer)
–Length of loan
–Cosigner
© EMC Publishing, LLC
Private TransportationLeasing a New Car
• Advantages of lease–New car
–Payments usually lower
–Service included (usually)
–Many dealers quit leasing (Chrysler 2008)
© EMC Publishing, LLC
Private TransportationLeasing a New Car• Disadvantages of lease–Don’t own (no equity)–Pay security deposit–Limited mileage– Insurance costs–Always have car payment–Can buy car at end of lease
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Tire tread
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Tire pressure
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Belts
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Hoses
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Washer fluid
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Coolant /
Anti-freeze
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Brake fluid
–Power-steering fluid
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Maintenance–Transmission Fluid
–Oil (change regularly to extend life of car)
© EMC Publishing, LLC
Private TransportationProtecting Your Investment
• Arranging for repairs
• Driving for economy (http://fin.emcp.net/cartalk)
© EMC Publishing, LLC
Which of the following is not an important maintenance tip to prolong the life of your car?
A. Check oil level often.
B. Check tire pressure often.
C. Check fluid levels often.
D. Check hoses.
E. Make sure radio volume is loud enough for you; if not, add speakers.
© EMC Publishing, LLC
Which of the following is not an important maintenance tip to prolong the life of your car?
A. Check oil level often.
B. Check tire pressure often.
C. Check fluid levels often.
D. Check hoses.
E. Make sure radio volume is loud enough for you; if not, add speakers.
What do you think?Discussion
© EMC Publishing, LLC© EMC Publishing, LLC
• Do you thinking leasing or buying is the better option? Why?
• Do you check the oil, brake fluid, hoses, and transmission fluid on your own car? Why?
• How do you make sure your mechanic is not “ripping you off”?
© EMC Publishing, LLC