Ch 19 Cars

Installment loans

A loan repaid in equal monthly payments over a period of time

Determines auto insurance costs

Age Gender Record of driver

Bodily injury liability

Coverage that protects when you are responsible for an auto accident that results in injury or death of other parties

MSRP

Manufacturers Suggested Retail Price

Medical payments or personal injury protection (PIP)

Pays the insured for medical expenses resulting from an accident in your car, regardless of who is at fault

Collision insurance

Pays you for damage to your car due to an accident with another car or object

Comprehensive physical damage insurance

Pays you for loss or damage to your car resulting from fire, theft, falling objects, explosion, earthquake, flood, riot, civil commotion, and collision with a bird or animal

Premiums

Periodic payments for an insurance policy

APR

Rate of interest figured in a yearly basis

Uninsured motorist

Insurance coverage that pays for injuries caused by a hit-and-run driver

Collision

Insurance you may want to drop as the car gets older

Finance charges

Total amount paid for the use of credit, including interest charges and other fees

Collateral

Something of value pledges as security for a loan

Certified Used Cars

(1) many dealerships, auto manufacturers and superstores, sell used cars with full warranties (2) This can provide some buyer protection (3) The car has received a thorough inspection

Car expenses when owning a car

(1) routine maintenance (2) fuel costs (3) insurance (4) sales tax (5) license and registration (6) parking fees

Gain when operate and maintain car properly

(1) safe driving (2) better, cheaper insurance

Options

features available with a particular car

Truth in lending law

Required creditors to provide borrowers with a complete written account of credit terms and costs

Compulsory Auto Insurance Law

Requires proof of car insurance prior to the occurrence of an accident

Where to Buy?

(1) Check AT LEAST 3 places to begin comparison shopping (2) Look at the reputation (3) Ask for referrals from friends and family (4) Check out service departments (5) Car Dealerships (6) Online (7) Used car lots (8) Somebody's front yard (private sellers) (9) Car magazines/newspapers (private sellers) (10) Government and Bank Auctions (11) Rental Agencies

Before buying a car

(1) Consumer Reports (2) NADA - National Automobile Dealer's Association THE BLUE BOOK (3) Library (4) AAA (5) Magazines and online

Depreciation

(1) Decrease in the value of property (2) New cars lose value fast (3) value drops nearly 50% in ONE year!

Financing a Car

(1) For the best deal on a loan - negotiate the price for the car .... Then talk about how to pay for it. (Dealers make $$$$ on this part of the transaction!) (2) Car Manufacturers (3) Banks (4) Credit Unions (5) Finance Companies (6) Savings and Loans

Owner's Responsibility

(1) Must buy adequate insurance! All states have compulsory insurance laws. (2) Must operate and maintain your car properly and safely

Warranties

(1) New cars generally have 3 year - 36,000 mile BUMPER TO BUMPER (2) Some have 5 year - 100,000 mile drive train (3) Used cars have limited warranties (4) You can often buy EXTENDED WARRANTIES $$$ (5) Private sellers offer NO WARRANTY

Uninsured and underinsured motorist insurance

(1) Pays you for injuries caused by an uninsured or hit-and-run driver (2) covers insured persons driving, riding, or walking (3) covers if you are injured as pedestrian

VIN (Vehicle identification number)

(1) You can check the history of a used car on line (2) Just enter VIN in the search engine - but there is a charge $15 - $30 for one report

Where to get auto loan at reasonable interest rate

(1) car dealerships (2) banks (3) credit unions (4) online (5) used car lots

Four Point Check

(1) in the driver's seat (2) on the road (3) under the hood (get a mechanic to take a look) (4) on paper - see page 499 for "car review checklist"

Major car ownership responsibilities

(1) insurance (2) maintain and operate car safely

Rebate

Money back Manufacturers offer these to sell cars; incentives

Property damage liability

Protects you when you are responsible for an auto accident in which property of others is damaged

No-fault

Under this form of insurance, each policyholder makes a claim to his of her own insurance company for the actual financial losses and medical expenses caused by the accident