Personal Finance Objective 6.02-BStudents will understand options and practices for meeting transportation needs.

6.02-B “Choosing the Right Vehicle”

Sourcewww.AAA.com December 2011

Factors to Consider Before PurchasingDetermine what is affordable for

youEvaluate your driving habitsList needed featuresConsider vehicle depreciation

costsWill you buy New or “new to

you”?

What Can You Afford?

Value of your trade-inAmount of down payment Budget $ available for

◦Monthly installment payments or◦Monthly lease installment◦Lump sum payment for vehicle

Investment financing optionsInsurance costs

Evaluate Your Driving Habits

How will vehicle be used?◦What types of trips will be most frequent?

Local Short distance…will Electric car work?

◦How many passengers will vehicle need to carry?

◦How much cargo space is needed? Need trunk to lock Open storage (pickup truck)

◦Will vehicle be mostly on 4 lane highways? Weather/geographic conditions? snow,

mountains, gravel/muddy roads

◦Where will you park at home/work?

List of Needed FeaturesNeeded or Wanted?

◦Seating◦Cargo space◦Fuel economy◦Commute –Electric- MPG◦Style: 2 door, 4 door, 2WD, 4WD,

sedan, truck, SUV◦Safety features◦Specialty or convenience: GPS, CD

player, DVD player, Sirius radio

Consider Depreciation Costs Biggest yearly expense for new cars is DEPRECIATION Consider a model that has a track record of holding its value

for longer Research how much models depreciate within the first 5

years

New or “New to You”?

New Vehicle◦ Higher pricing◦ Possible purchase

incentives-rebates, gas for year bonuses, etc.

◦ Longer & broader warranties

◦ Wider variety of units available

◦ More variety in features◦ Can order “custom”

from factory

Will you buy NEW or NEW to YOU vehicles?Both have Benefits & Detriments

Consumer must weigh options and related costs to make best decision.

New or “New to You”?

New to You◦ Lower pricing◦ Less buying incentives◦ Warranties more limited◦ Harder to find desired

vehicle & features◦ Less choices widely

available◦ Search longer to find desired

vehicle◦ More maintenance due to

age & prior usage◦ Get inspection to ensure

quality and performance

Will you buy NEW or NEW to YOU vehicles?Both have Benefits & Detriments

Consumer must weigh options and related costs to make best decision.

WARRANTIES & MAINTENANCE

Review Warranty◦ Length ◦ Coverage◦ Limitations

Investigate maintenance costs◦ Check with an auto

repair shop ( a reputable or trusted mechanic) for estimated costs of Fluids-oil changes, etc. Parts-tires, batteries,

etc. Other repair items Overall value of vehicle Check out major

components-engine, 4WD

INVESTIGATE SAFETY RATINGS

Check with National Highway Traffic Safety Administration (NHTSA)

www.SafeCar.gov Insurance Institute

for Highway Safety (IIHS)

www.IIHS.org/Ratings

# of airbagsVehicle “roll”

factorIf using car seat,

chek out access to vehicle’s LATCH system

SEEK RECOMMENDATIONSRecommendatio

ns◦ Ask friends◦ Ask family◦ Ask colleagues◦ Ask your

mechanic

Reviews◦ Check webwsites for

expert opinions or reviews

◦ www.AAA.com/autosales

◦ www.AAA.com/Go , click “On New Cars”

DON’T LIMIT CHOICESDon’t get stuck

on one vehicle that you can’t live without!

Be flexible to get more negotiating room with seller

Check out vehicles that meet your needs