BUYING A

CAR A

ND

INSURIN

G IT

WHAT IS THE DIFFERENCE BETWEEN . . .

Type of Car You WantType of Car You NeedType of Car you Can Afford

NARROWING YOUR CHOICES

Select a vehicle that will best meet your needsConsiderHow many passengers will you carry?

Will you need good fuel economy?What will you use the vehicle for?Price range

RESEARCH AND COMPARE

Before going to dealers research the vehicles you are interested inUse:Consumer Reports —print and internetEdmunds —internetCar and Driver – print and internetKelley’s Blue Book —print and internet (KBB.com)

WHEN RESEARCHING, LOOK FOR . . .

Specific modelsPerformanceRepair recordsSafety featuresSuggested pricesOverall reliability ratings

GETTING CREDIT

Two TypesBankVisit the bank to see how much money you will be able to borrow and at what interest rates.

DealerCheck with the dealer, they may be able to offer you a better interest rate than your bank.

VISITING THE DEALERS

Best day to look—Sunday

When dealership is open:Gather information onlyCollect brochures, ask questions, take notes

STICKER PRICE

Located on driver’s side rear window

ContainsMSRP – Manufacturers Suggested Retail Price

FeaturesOptionsOther costs

SECOND VISIT

Talk to same salespersonAsk to see invoice of carInvoice will show what the dealer paid for it

This should be the price that you start negotiating from

If salesperson refuses, then walk out

TESTING AND INSPECTING CARS

Compare:RideHandlingFeaturesCostWhat else would you compare?

TRADE-INS

Do not talk about the trade-in until the cost of the new car has been determined

MAKING AN OFFER

Decide on a price and STICK WITH IT

This should NOT be your initial offer

Don’t reveal any emotionsBe prepared to bargain

SALES AGREEMENT

Once a price has been agreed upon, the sales agreement will be completed

Legal document that contains the specific details of the purchase

Must be signed before the sale is complete

Buying a Car Without Getting

PURCHASING USED CARS

VARIETY OF PLACES TO FIND

New Car Dealers

Used-car dealersUnlikely to have a service departmentLimited warranty

Private ownersSometimes the best place to find a good dealHave vehicle checked out by mechanic before purchasing

DEALER PACKS

High priced, high profit dealer services

Examples:Dealer preparationWax and polishRustproofing Extended warranties

LEASING A CAR

Contractual agreement

Monthly payments made over set period of time

No ownership interest

When time is finished, car is returned to leasing agent or can be bought for residual value

WHY LEASE???

Can afford nicer vehicleNo large down paymentGet new vehicle more often

LEMON LAWS

Your car is a lemon if:You have taken the car in four unsuccessful attempts for repair for the same defect

Your car has been out of service for a total of at least 30 days

Keep good documentation

INSURIN

G YOUR C

AR

REQUIREMENTS

All states have minimum insurance requirements for registration of vehicle

Illinois requires liability only

COST OF AUTOMOBILE INSURANCE

Premium (cost of insurance) is based on several factors:

CarModel, style, ageLocationColorEngine sizeNumber of miles driven daily

DriverAge, gender, marital status

Driving recordNumber of claims filed

Primary vs. secondary driver

COST FACTORS

TYPE

S OF

AUTOMOBILE

COVERAGE

LIABILITYProtects insured against claims for

personal injury or damages to other person or their property

Insured receives nothing

Described in series of numbers 100/300/50

100 = up to $100,000 medical for one person

300 = up to $300,000 total medical for all persons

50 = up to $50,000 property damage Minimum coverage in Illinois is 20/40/15

COLLISION COVERAGE

Covers repair or replacement of your own car

Will pay regardless of who is at fault

Usually has deductibleOut of pocket expense before insurance pays

COMPREHENSIVE COVERAGE

Damage to your car from events other than collision

Examples:FireHailWaterFalling objectsNatural disastersVandalism

PERSONAL INJURY PROTECTION (PIP)

Also known as Medical CoveragePays, regardless of fault for:MedicalHospitalFuneralOf insured, their family and

passengers

UNINSURED & UNDERINSURED MOTORISTProtects insured against other

drivers who either don’t have enough insurance or no insurance at all