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