CHAPTER 17 BUYING AND OWNING A VEHICLE

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CHAPTER 17 BUYING AND OWNING A VEHICLE • 16. 1 BUYING A VEHICLE • 16. 2 INSURING A VEHICLE • 16. 3 ENVIRONMENTAL CONCERNS

BUYING A VEHICLE DO YOUR NEEDS REALLY JUSTIFY OWNING YOUR OWN CAR?

CAN YOU AFFORD IT? • PURCHASE PRICE • DEPRECIATION –Vehicles value steadily drops over time • FINANCING –Shop around and look for best rate • OPERATING COSTS –Fuel, oil, tires repairs, replacement parts, licensing fees, registration, insurance, taxes, etc…. .

WHAT KIND SHOULD YOU BUY? • What will it be used for? • Passengers, cargo? • How many miles? • Keep it how long?

VEHICLE SIZE • Smaller, lighter = better gas mileage but does not offer as much protection • Smaller = easier to maneuver • Larger = more comfortable but more costly • Larger = greater capacity for passengers

OTHER DECISIONS • ENGINE –Smaller more fuel efficient –Larger more powerful for working • TRANSMISSION –Most automatic with overdrive –Manual last longer, harder to learn • OPTIONAL EQUIPTMENT –Technological advancements means lots of toys!

LEASING • Cheaper than buying • When lease is over you: –Return the vehicle and lease another –Purchase the vehicle at reciprical value –Return the vehicle with no obligations

BUYING USED VEHICLE • Buying from private owner may cost less but no warranty • Used car dealers usually have a better selection • Some now offer certified pre-owned warranties • Read warranty carefully • How much should you pay? –Kelley’s blue book

CHOOSING A USED VEHICLE • Make sure looks good and is in good mechanical condition • Need to know if it was ever involved in collision before • If possible talk to previous owner

OUTSIDE AND INSIDE CHECKS • Doors and locks • General appearance • Fluid leaks • Evidence of collision damage • Condition of seats • Lights and accessories • Mileage • Pedals & steering • Spare tire and jack • Hoses, belts, and fluids • Battery and cables

TEST DRIVE Always test drive – make sure everything works and the car drives well.

HAVE VEHICLE INSPECTED Take it to a trusted mechanic and have them inspect it.

INSURING THE VEHICLE Every state has financial responsibility laws. Requires you to prove that you can pay for damage that you might cause

KINDS OF INSURANCE

LIABILITY INSURANCE Protects the driver who caused the collision. Provides compensation for a harm or wrong to a third party

BODILY INJURY INSURANCE Covers the driver who is at fault against claims Claims for injuries to other people

PROPERTY DAMAGE INSURANCE Protects the driver who is at fault against claims for damages to another person’s property, up to specified limits

MEDICAL PAYMENT INSURANCE Pays medical and funeral expenses for bodily injuries sustained by occupants in the insured vehicle

NO-FAULT INSURANCE In some states, people can recover losses and expenses from their own insurance company regardless of who is at fault

COLLISION INSURANCE Provides coverage to pay the costs of repair or replacement of your vehicle

COMPREHENSIVE INSURANCE Pays for damage to your vehicle for reasons other than collisions

UNINSURED AND UNDERINSURED MOTORIST Protects you if you are hit by another driver who has too little or no insurance.

INSURANCE RATES • DRIVING RECORD • AGE • MILES DRIVEN • GENDER • MARITAL STATUS • TYPE OF VEHICLE • WHERE DRIVER LIVES • DRIVER’S CLAIM RECORD

PREMIUMS The amount you agree to pay each month/quarter/year for insurance coverage

DEDUCTABLE: A set amount that you agree to pay in the event of a claim before the insurance company pays the difference. HIGHER DEDUCTABLE = LOWER PREMIUM LOWER DEDUCTABLE = HIGHER PREMIUM

So if………. Mr. A was in a collision The damage to his cars was $4, 500 His deductable was $500 How much dies the Insurance company pay? How much does Mr. A pay?

REDUCED PREMIUMS • GOOD GRADES • NO CLAIMS OR CONVICTIONS FOR THREE YEARS • SAFETY FEATURES

ASSIGNED RISK INSURNACE Drivers who have had their insurance cancelled due to poor driving record Extremely high premium for several years

Mr. A’s Insurance Property Damage Liability 10, 000 Bodily Injury Liability 30, 000 person/60, 000 MAX Medical Payments 30, 000/60, 000 MAX Collision 20, 000/ 500 deductible Mrs. B Hospital Bills $34, 000 1. How much will Mr. A’s Insurance pay for Ms. B’s Hospital Bills? How Much Will Mr. A pay? 2. How much will Mr. A’s insurance pay for damages to Ms. B’s Car? How much will Mr. A pay? 3. How much will insurance pay for Mr. A’s injuries? How much will Mr. A pay? 4. How much will insurance pay for damages to Mr. A’s car? How much will Mr. A pay? Damage to Car $5, 500 Mr. A Caused a Collision Hospital Bills $22, 000 Damage to Car $6, 000

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