Consumer Ed Chapter 19

Thorough inspection

A _________ __________ is most important when you buy a used vehicle from a private seller, since the responsibility for future repairs and service work will be entirely in your hands.

Convenience

A benefit of mass transit; Bus and train passengers can read, work, make phone calls, or relax while riding.

Less congestion

A benefit of mass transit; By cutting down on the number of vehicles entering a city, public transportation systems reduce traffic congestion in downtown areas.

Less pollution

A benefit of mass transit; Exhaust emissions are a major threat to the environment. When fewer vehicles are driven, exhaust emissions are reduced, thereby reducing air pollution.

Energy savings

A benefit of mass transit; Many passengers can be moved for a fraction of the energy required to move them individually.

Economy

A benefit of mass transit; Public transportation fares can be less than the cost of gas, tolls, and parking.

Social Cost

A disadvantage of owning your own vehicle; Commuters' vehicles contribute greatly to air pollution. They also add to the need for well-paved streets and highways that are expensive to build and maintain. More traffic on the roads means more accidents. Traffic accidents cost billions of dollars and claim more than 40,000 lives every year.

Expensive

A disadvantage of owning your own vehicle; In addition to monthly loan or lease payments, drivers must pay for fuel, licenses, insurance, maintenance, repairs, and parking.

Traffic

A disadvantage of owning your own vehicle; drivers have to deal with traffic jams, road repairs, and other aggravating circumstances. Drivers have to remain alert at all times as opposed to mass transit commuters.

Stress

A disadvantage of owning your own vehicle; people who drive to work may experience more of this than those who use public transportation, especially when bad weather creates difficult driving conditions.

Title

A legal document that shows who owns a vehicle.

Recall

A manufacturer's request for owners to take a vehicle to a dealership for repair. Most are made for safety reasons. Usually mailed directly to owners.

How long do you want to keep the vehicle?

A question that can help provide an indication of whether buying or leasing is a better choice for you; In the long run, the least costly option usually is to buy a vehicle and keep it as long as you possibly can. However, for consumers who want a new vehicle every two or three years, leasing may cost less than frequent buying.

How much wear and tear will you put on the vehicle?

A question that can help provide an indication of whether buying or leasing is a better choice for you; Most lease agreements require that you pay an extra charge if the vehicle has excessive wear and tear when you return it. If you haul a lot of belongings in your vehicle or if you tend to drive off-road and in rough terrain, leasing may not be right for you. If you buy a vehicle it's still wise to keep it in god condition so that you'll get a good price when you trade it in or sell it.

How much will you drive the vehicle?

A question that can help provide an indication of whether buying or leasing is a better choice for you; Most leases include a mileage limit. At the end of the lease period, you must pay a certain amount (between 10 and 20 cents) for every mile over the limit. If you drive more than 12,000 to 15,000 miles a year, a lease probably isn't the way to go. Sometimes has a mileage limit.

Manufacturer's rebate

A return of part of the price you pay for a vehicle.

Inspection

A thorough _________ is most important when you buy a used vehicle from a private seller.

Maintenance Schedule

A timetable for routine servicing and for checking or replacing parts.

Safety

An important factor to consider when you do your research into the make and model of cars; Braking and emergency handling are important elements for accident avoidance. Airbags and head restraints provide protection in the event of a crash.

Reliability

An important factor to consider when you do your research into the make and model of cars; Some manufacturers and some specific models of vehicles get high marks for quality and _______. You might have to pay a little more for a reliable model, but you'll save on repairs and aggravation.

Comfort and convenience

An important factor to consider when you do your research into the make and model of cars; Some vehicles have more headroom and legroom or can hold more cargo than other vehicles of similar size.

Insurance

An important factor to consider when you do your research into the make and model of cars; The vehicle you choose can affect what you pay for _______. Once you know which vehicles interest you, call your auto insurer and find out what your premiums would be.

Power and performance

An important factor to consider when you do your research into the make and model of cars; depending on how you plan to use your vehicle, you'll need to keep in mind such factors as how well it can accelerate to highway speeds or handle steep hills.

Fuel economy

An important factor to consider when you do your research into the make and model of cars; in general, the larger or more powerful a vehicle is, the more gas it uses. Some vehicles require premium fuel, which is more expensive. If you want to control your fuel costs, look for a vehicle that runs on regular gas and gets good mileage.

Internet

An option you have to find vehicles; Many dealers have Web sites that let you compare what you're looking for with what they have in their inventory. Some sites allow buyers to list the price they're wiling to pay for a vehicle. Dealers look over the offers and decide whether they're willing to meet the buyer's request.

Private owners

An option you have to find vehicles; People who want to sell their used vehicles often place classified ads in newspapers or other publications. You can usually get the best price by buying directly from an owner. However, a private owner will not offer a warranty.

Dealers

An option you have to find vehicles; Some sell only used cars. New-car dealers sell vehicles made by specific manufacturers, and may also sell a variety of used cars.

Capitalized Cost Reduction

An up-front payment, made when leasing a vehicle, that results in a lower monthly fee.

Advantages of using your own vehicle

Comfort, independence, and flexibility. Don't have to wait for trains or buses, and they can run errands or work late if they wish.

Monthly payments

Depend on the amount borrowed, the interest rate, and the length of the repayment period. Will remain the same throughout the loan period. However, the amount that goes toward the interest will gradually decrease and the amount going toward the principal will increase.

Trade-in

Don't discuss ______-_____ or whether you are buying or leasing. These are not relevant when determining a fair price for the vehicle.

Options

Features available on a vehicle at extra cost. Ex. A CD player, a sunroof, tinted windows, leather seats, etc.

Charges and fees

Find out before you sign a lease agreement what all the _______ ______ ______ will be.

Find the lowest interest rate

Generally the goal of loan shopping. Remember, though, that the total amount you pay depends on the length of the loan as well as the interest rate. A low-interest rate loan stretched over a longer period of time can actually cost you more than a loan at a higher interest rate over a shorter period of time.

Writing

Get everything in _______ when completing a deal.

Included

If you want the option to buy the vehicle when the lease expires, make sure that's ________ in the contract.

Lemon Laws

Laws that protect buyers of vehicles with serious defects. All 50 states have them. Vehicles are known as "lemons" because they are a sour deal for buyers. Although state laws vary, a lemon is usually defined as a vehicle that has not been successfully repaired after four attempts for the same defect or that has been out of service because of defects for 30 days during one year. Typically require dealers to replace such a vehicle or to refund the customer's money.

Manufacturers' rebates

Leave any __________ _________ out of the discussion. The rebate comes directly to you and doesn't cut into the dealer's profit.

MSRP

Manufacturer's suggested retail price; for a vehicle, it includes the base price, the price of options installed by the manufacturer, and the manufacturer's transportation charge.

Ways transit officials try to respond to consumer resistance

Modernizing equipment, improving cleanliness, and increasing security.

Up

Negotiate ______ from the invoice price rather than down from the sticker price.

End-of-lease costs

One of the three main categories leasing costs fall into; At the end of the lease period, you may have to pay a disposition fee to cover the leasing company's expense of "disposing" of the vehicle. You may also have to pay charges if you exceed the mileage limit, or if there is significant wear and tear to the vehicle. Remember, too, that if you decide to end a lease early, you may have to pay a considerable penalty.

Up-front costs

One of the three main categories leasing costs fall into; The first month's payment must be made when signing the lease. Other costs may also have to be paid up front, such as a refundable security deposit, taxes, registration fees, an acquisition fee, and various other charges.

Monthly Payments

One of the three main categories leasing costs fall into; The lessee pays for the vehicle's depreciation if you make these payments. Also includes an additional amount, similar to interest that is paid to the leasing company in return for the use of their vehicle.

Stress

People who drive to work may experience more _______ than those who use public transportation.

Exhaust Emissions

Pollutants that are released when gasoline is burned.

Road tests

Practical tests conducted by professional drivers to judge the performance of new-model cars. They report on features such as handling and braking, acceleration, convenience and comfort, and fuel economy.

Rebuilt

Restored to good working condition; refers to used vehicle parts. (1)

Reconditioned

Restored to good working condition; refers to used vehicle parts. (2)

Crowded

Some people dislike ________ conditions that come with mass transportation.

Schedules

Some people dislike having to plan their time around the transit system's __________.

Dirty

Some people protest that facilities are _______ and poorly maintained.

Windshield washer fluid

Something that should be checked regularly in your car; Check the level each time you refuel the vehicle. Deals with cleaning your windshield.

Tire pressure

Something that should be checked regularly in your car; Low inflation causes tires to wear out faster, reduces fuel efficiency, and can cause accidents. Overinflation causes a bumpy ride. Check once a month and keep it at the level specified in your owner's manual.

Lights

Something that should be checked regularly in your car; Once a month, check to make sure the headlights, tail lights, signal lights, brake lights, hazard warning flashers, and interior lights work properly.

Brake fluid

Something that should be checked regularly in your car; essential to the proper operation of your braking system. Usually does not need to be changed, but check the fluid level when you change the engine oil to make sure it's not leaking.

Battery

Something that should be checked regularly in your car; inspect once a month. Check the water level and add more if needed. Clean and tighten the terminals if needed.

Engine oil

Something that should be checked regularly in your car; keeping your vehicle's oil at the proper level helps keep the engine lubricated and running well. Check the oil level each time you refuel, and replace the oil and oil filter at recommended intervals.

Transmission fluid

Something that should be checked regularly in your car; lubricates the transmission gears. It rarely, if ever, needs to be changed, but check the fluid levels when you change the engine oil.

Radiator coolant/antifreeze

Something that should be checked regularly in your car; this fluid helps keep your engine at a safe operating temperature. Check the level once a month to ensure that it continues to protect your engine. Replace it every few years or more often if needed.

Mechanical systems

Something to check when inspecting a used car; Check for fluid leaks by looking under the hood and under the vehicle. Test the steering, brakes, and transmission. Problems could signal the need for a major repair.

Exterior finish

Something to check when inspecting a used car; Check for signs of rust or pitting. Remember, some people try to mask such problems with a coat of paint. Check along window moldings as well.

Interior

Something to check when inspecting a used car; Check the brake and accelerator pedals, as well as the upholstery, for wear (a clue to the vehicle's age and use). Check for signs of leaks or flooding, including water marks on the upholstery, trim, or floor and swelling or buckling of interior trim panels.

Tires

Something to check when inspecting a used car; Examine the depth of the tire tread on all four tires. Uneven wear can indicate a number of problems.

Body and frame

Something to check when inspecting a used car; Look for new or improperly fitting parts, mismatched paint, or suspension problems that might signal that the vehicle has been in a major accident. Some states require this information to be disclosed in all used-car sales.

Odometer

Something to check when inspecting a used car; This is the instrument on the dashboard that tells you how many miles the vehicle has been driven. The more miles a vehicle has been driven, the more likely it is to need major repairs in the near future. When you buy a used vehicle from a dealer, the dealer must supply you with a disclosure form revealing the true mileage.

Heating and electrical systems

Something to check when inspecting a used car; With the engine running, test the heating and cooling systems, lights and signals, wipers, radio, and CD or tape player.

Title

The _______ is a legal document that shows who owns the vehicle.

Book value

The ________ is the estimated value of a given make, model, and year of a vehicle.

The down payment

The amount of _____ ________ ___________ is a percentage of the vehicle's price. Typically, the minimum is 10%. However, if you are first-time buyer with no credit history, or if you have a poor credit history, you may be asked to pay a higher percentage. The larger the down payment, the less money you'll have to borrow and the less you'll pay in monthly finance charges. Make it as large as possible but don't use up all your savings.

Payments

The amount you budget for vehicle expenses must cover more than just monthly ________.

Sticker Price

The dealer's initial asking price for a vehicle, as marked on the sticker affixed to the vehicle's window. It is the sum of the MSRP plus the price of dealer-installed options, dealer preparation, and additional dealer markup and profit. The dealer preparation fee covers the cost of cleaning the vehicle, handling paperwork, filling the tank with gas, and completing other tasks before turning the vehicle over to you.

Depreciation

The difference between the vehicle's original value and its projected value at the end of the lease period.

Book Value

The estimated value of a given make, model, and year of vehicle. Based on factors such as the condition of the vehicle, mileage, overall condition, and even the part of the country in which the vehicle is being sold. Kelly Blue Book.

What safety concerns do you have?

The fifth question you should consider when deciding which type of transportation to use; Taking mass transit may be safer than driving on busy highways and streets. On the other hand, driving your own car may be preferable to waiting for a bus in an unsafe neighborhood.

Buying with a loan

The first of two financing options; Most consumers who buy a vehicle make a down payment and take out a loan for the remaining amount. The loan is repaid in monthly installments. Once you have repaid the loan, the vehicle belongs to you. You can keep it and make no more payments; you can sell it; or you can trade it in for a newer vehicle

Use new parts

The first option for replacing vehicle parts; made to the manufacturer's specifications.

Where do you go most often, and how far away are those places?

The first question you should consider when deciding which type of transportation to use.

If you use your own vehicle, where will you park? (Is parking available near both your destination and your home?)

The fourth question you should consider when deciding which type of transportation to use.

Interest

The goal of loan shopping is to find the lowest _______ rate.

Transportation

The majority of Americans continue to rely on their own _________ to get to work.

Lessee

The person who leases a vehicle or other merchandise.

Base Price

The price of a vehicle with its standard equipment (features that every model comes with). Does not cover various options. Ex. A basic radio system may be standard equipment, while a CD player is an option.

Invoice Price

The price the dealer pays the manufacturer for a vehicle. The dealer usually won't tell you, but it's available from sources such as Consumer Reports and several Web sites. Good idea to obtain because it helps when negotiating. Often higher than the price the dealer actually pays.

Which costs less overall?

The question you should ask when considering whether to buy or lease. Monthly lease payments are usually lower than monthly loan payments. However, in the long run, leasing may be more expensive than buying a vehicle.

Leasing

The second of two financing options; When you lease a vehicle, you make monthly payments in exchange for exclusive use of the vehicle for a specified period of time. You do not own the vehicle. At the end of the leasing period, you must return the vehicle, unless you decide to buy it at that point. Applies to new vehicles only.

Rebuilt or reconditioned parts.

The second option for replacing vehicle parts; usually less expensive than using new parts, used interchangeably and describe used parts that have been restored to a good working condition.

How much will transportation cost you?

The second question you should consider when deciding which type of transportation to use; Investigate and compare the costs of using mass transit, owning a vehicle, or using other forms of transportation.

Exceed

The shop cannot ______ the written estimate without your permission.

What other choices are available?

The sixth question you should consider when deciding which type of transportation to use; If you can't afford a vehicle and don't have access to mass transit, perhaps you could join a carpool, ride a bike, walk, skate, or use a scooter

Where are your local mass transit terminals or stations located? (Can you walk?)

The third question you should consider when deciding which type of transportation to use.

Lease

To make monthly payments in exchange for exclusive use of a vehicle for a specified period of time.

Mass Transit

Transportation systems designed to carry large numbers of people.

Budget, priorities

When considering what type of vehicle to buy, determine which will best suit your _______ and _________.

Live

When it comes to transportation, your choices will depend largely on where you _______.

Lease

When you _______ a vehicle, you make monthly payments in exchange for exclusive use of the vehicle.

Fear

_______ of crime is another reason some people stay away from the mass transportation system.

Mass transit systems

________ are transportation systems designed to carry large numbers of people.

Exhaust Emissions

_________ are a major threat to the environment.

Depreciation

_________ is the difference between the vehicle's original value and its projected value at the end of the lease period.