BUYING A CAR AND INSURING IT. WHAT IS THE DIFFERENCE BETWEEN... Type of Car You Want Type of Car You...
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Transcript of BUYING A CAR AND INSURING IT. WHAT IS THE DIFFERENCE BETWEEN... Type of Car You Want Type of Car You...
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