Ch. 16 Buying & Owning a Vehicle

What is the final thing you should do right before closing a deal ?

*if the seller is going to make repairs --> have the repairs written into the sales agreement** 1. Make sure the vehicle includes an owner's manual & receipts of service repairs.

What are the various costs associated w/ owning & operating a vehicle ?

- Maintenance -Tires -Insurance -License -Registration & taxes ------------------- Depreciation (when a vehicle's value decreases over time)

What should you do when considering purchasing a used vehicle ?

- Perform inside & outside checks - Test drive - Read warranty (if there is one)

How does auto insurance work ?

- contract between you & insurance company ------------------ In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.

What does liability insurance do ?

- it financially protects the driver who caused the collision - it provides compensation for a harm or wrong to a 3rd party

What is liability insurance?

...

How would you select a used vehicle ?

1. Make sure the vehicle is in good mechanical condition. 2. Determine whether it was ever involved in a collision, OR needs repairs. 3. When possible, talk to the previous owner about the condition of the vehicle & previous maintenance service that was done on the vehicle.

What is a Financial Responsibility law ?

A law that requires a driver to prove that he/she can pay for any injury, death, or property damage caused by an automobile accident if he/she is at fault.

What might some insurance companies do if a driver or other insured drivers on the policy have been convicted of a drug or alcohol related violation ?

Cancel the policy

What factors might cause an insurance company to offer a reduced premium to a driver ?

If the driver has: - maintained good grades in school - successfully completed an approved driver education program - had no claims or convictions for 3 years - has multiple vehicles insured under the same policy - owns/drives a vehicle w/ certain safety features (like airbags & anti theft devices)

In what ways can individuals reduce the effects on vehicles on the environment ?

They can: - regularly maintain their vehicle (reduces the # of pollutants) - use public transportation - carpool w/ others - purchase alternative - fueled vehicles (ex. hybrid)

What is Uninsured & Underinsured Motorist Insurance ?

Uninsured: -protects you if you are struck by another vehicle whose driver has no insurance - your company covers the costs of injuries to you & your passengers (up to a specified amount) ------------------ Underinsured: -your insurance company will pay any costs that exceed what the other person's insurance company will pay as a result of a collision

What important things should you consider when purchasing a used vehicle ?

Used Car Dealership: - usually have a large selection available - many car dealerships carry a warranty (warranties do not cover everything -> read it carefully) ------------------ Private Owner: - private owners seldom repair the vehicle OR provide you w/ a warranty - in nearly all cases, a private sale is final

What is Collision Insurance ?

a type of insurance that covers repairs to your car regardless of who's at fault

What is Assigned Risk Insurance ?

a type of insurance that provides bodily injury & property damage liability coverage to high-risk drivers for a much HIGHER premium. - Assigned risk drivers must drive violation free several years before they can qualify for standard insurance

What might some insurance companies do if the driver has had several collisions or traffic convictions ?

cancel the family's policy

What is Bodily - Injury Insurance ?

covers the driver who is at fault against claims ----------------- - a type of liability insurance

What are "claims" ?

formal requests for payments related to injuries to other people

What is Medical Payment Insurance ?

insurance that pays medical & funeral expenses for bodily injuries sustained by occupants in an insured vehicle ------------------ this coverage does not depend on who was at fault in the accident

What is Property Damage Insurance ?

insurance that protects the driver who is at fault against claims for damages to another person's property (up to specified limits) ------------------ - a type of liability insurance

What does a solar powered vehicle do ?

it captures light from the sun & transforms it into electrical power

What does it mean "to lease" a vehicle ?

it means you make payments to drive the vehicle (long-term rental)

What is a "deductible" in regards to collision insurance ?

the amount you agree to pay towards the repair or replacement of the vehicle

What things should you check when performing a test drive on a vehicle you are considering purchasing ?

- What do you hear & feel ? - Are the brakes in good condition ? - Is the steering firm ? - How is the suspension ? - Does the vehicle hesitate when you quickly accelerate ? - Is the vehicle comfortable ? ------------------ -Turn on the ignition switch on & check to see that all warning lights, signals, and headlights work. - Start the engine. It should start easily. Warning lights should go out in a few seconds. - Drive @ low speeds & test the brakes several times. The vehicle should stop smoothly & straight. - Make a number of turns. There should not be any play in the wheel; it should steer easily - Accelerate moderately (the vehicle should accelerate smoothly from 0-40 mph without hesitation. - Test the brakes @ various speeds. They should not grab or pull to one side. If equipped w/ antilock brakes, brake hard to ensure that the system works. - Drive on a rough road @ 25 mph & turn off the radio. (the vehicle should not rattle or feel unstable). -Check oil pressure gauges & warning lights for low pressure, overheating, or any other malfunctions indicated by warning lights.

Where can used vehicles be purchased from ?

- a used car dealer - a new car dealer - a private owner

How does vehicle use adversely affect the environment ?

Almost every motor vehicle that uses gasoline or diesel fuel creates engine exhaust --> some exhaust gases contribute to air pollution

What is no-fault insurance?

An insurance system in which drivers are responsible for having insurance which will pay for their own injuries & repair property they damage. ------------------ Your insurance does not have to have coverage for your own vehicle repairs.

What should you do before purchasing a used vehicle after you've already inspected it ?

Have a trained technician also inspect it. (ask about possible needed maintenance or repairs).

What insurance does every state require a driver to carry ?

Liability Insurance

When considering buying a used vehicle what kinds of things should you look for during outside & inside checks ?

OUTSIDE: - doors & locks - vehicle appearance - fluid leaks - evidence of collision damage --------------- INSIDE: - check seats for comfort & condition -lights & accessories - mileage (odometer) - pedals & steering wheel ------------------ TRUNK: - evidence of damage - spare tire - tire jack ------------------ HOOD: - signs of collision damage - hoses & radiator for leaks - condition of belts - coolant level - battery & cables

What are the responsibilities of owning or leasing a vehicle ?

Owning: - must be able to afford it & maintain it -cover annual operating costs, repairs, & fuel ------------------ Leasing: - responsible for monthly payments, fuel, & all other types of operating costs

What happens after your lease contract (for your vehicle) expires ?

You do not get to own the vehicle. ----------------- At the end of your lease you must choose 1 of 3 options: 1. Return the vehicle & lease another vehicle. 2. Purchase the vehicle @ a cost determined at the start of your lease. 3. Return the vehicle w/ no obligations to either lease another vehicle or purchase the vehicle you just returned.

What factors affect the cost of insurance ?

[Driving Record]: (drivers w/ a certain # of convictions for moving violations & collision pay higher premiums) ----------------- [Age]: younger drivers have higher premiums (because of how many collisions are caused by them). ------------------ [Miles Driven]: the more miles a vehicle is driven on a regular basis (usually annual), the greater the premium - this is because the vehicle is more exposed to the possibility of a collision ------------------ [Driver Gender]: Male drivers tend to pay higher premiums - their crash reports are higher - gap based on gender has narrowed ------------------ [Marital Status]: Married drivers statistically have fewer collisions than unmarried drivers. ------------------ [Type of Vehicle]: Sports/Fancier cars tend to be stolen more often. - some insurance companies may charge higher rates ------------------ [Where the Driver lives & drives]: - Drivers who live in rural areas -> tend to pay less than those who live in larger metropolitan areas ------------------[Driver's Claim Record]: Higher & more frequent claims -> usually result in higher premiums

What is Comprehensive Insurance ?

a type of coverage that helps pay to replace or repair your vehicle if it's stolen or damaged in an incident that's not a collision ------------------ - able to select a deductible amount - typically helps cover theft & damage from vandalism, natural disasters, falling objects, fire, hail, flood or animals.