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Transportation

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  1. Transportation Going Mobile

  2. ISBE Objectives • After studying this unit students will be able to: • Identify alternative means of transportation; • Determine the relative advantages of each; • Determine the need for transportation based on usage patterns, operating costs, maintenance costs and storage fees;

  3. Recognize the importance of counting a person’s time, safety and comfort as costs of alternative transportation modes; • Recognize that a large portion of income is used for the purchase and use of an automobile; • Recognize the care needed in the efficient and economic operation of an automobile;

  4. Understand how to evaluate different modes of transportation with regards to financing, insurance, safety, convenience, maintenance, and energy use; • Be aware of the various social costs of transportation, i.e., pollution, depletion of resources and congestion; • Understand that as much care should be taken in shopping for automobile financing as is taken in shopping for the car itself.

  5. Transportation Systems • Provide freedom in regard to living, working and shopping, • Increase economic activity and • Provide for efficient distribution of goods and services.

  6. System Interdependence • Competition between • The network of highways, streets and alleys • Railroads • Subways and • Airlines • Policies that favor one might hurt others, e.g., free streets, subsidies to others.

  7. Transportation Needs • Travel to • School • Shopping • Work • Recreation • Related to financial resources • Physical limitations • Time availability • Travel type vs. availability

  8. Travel Advantages/Disadvantages • Rail advantages • Leave the driving to us • Beautiful scenery without billboards • Few stops on long distance trips • Sleeping quarters • Rail disadvantages • High cost • Schedule • Can’t stop for closer inspection

  9. Bus advantages • Leave the driving to us • Low price • Bus disadvantages • Schedule • Traffic concerns • Seedy riders • Frequent stops

  10. Air advantages • Speed • Safety • Air disadvantage • Schedule • Airport locations • Cabin air

  11. Mass transit advantages • Price • Leave the driving to us • Mass transit disadvantages • Schedules • Travel companions • Distance to access • Frequent stops • Traffic?

  12. Walking • Exercise • Door to door transportation • No parking • No schedule • Walking Disadvantages • Travel time • Weather?

  13. Bicycling Advantages • Exercise • Door to door transportation • Low/no cost parking • No schedule • Bicycling Disadvantages • Travel time • Weather?

  14. Car Advantages • Relatively efficient schedule • Relatively convenient parking? • Car Disadvantages • Traffic • Cost? • Safety?

  15. Transportation Costs • Explicit costs • Fixed costs • Depreciation • Lost interest on capital invested • Variable costs • Gas • Maintenance • Repairs

  16. Implicit costs • Social costs • Subsidies

  17. Non-economic Selection Factors • Scheduling freedom • Flexibility • Availability • Convenience • Service • Value of time • Reliability • Comfort • Style • Status • Safety • Privacy

  18. Auto Aquisition • There are hundreds of new • Cars • Trucks • Vans and • SUVs • every year

  19. That new ‘vette you’d love to have probably • costs more than you can afford • only carries two passengers • only carries minimal luggage • guzzles gas • is expensive to maintain and • is out f the world to insure

  20. When “ride” shopping • Consider • Typical number of passengers • Other items to be transported • Where you will drive • Climate where you will drive • How much will you drive • Ease of maintenance

  21. Options? • AM/FM radio or satellite • Side air bags • On Star • Smooth ride/steering • Multi-changer CD player • DVD player

  22. Can you afford it? • Buy or lease • Cash or finance • Insurance • Maintenance and repair

  23. Where to look for new cars • New car dealerships • Buying services • The Internet

  24. New car dealers can • Special order American cars • Search other dealer’s inventory • Negotiate prices • Usually offer one of the Big Three and one or more import

  25. Tell Buying Services • The make • Model and • Options you want and they will • Buy @ a rock bottom price • Deliver it to a dealer near you

  26. Buying Services also provide • Financing • Leasing • Extended service contracts and • Dozens of Internet sites provide services to buying services, but you make the deal

  27. Evaluating a New Car • Does it have the options you want? • Special order • Buy off lot – better deal • or let dealer locate • Ensure satisfactory handling, • driving, • parking (size)

  28. The Sticker • Each new car sticker must include fuel economy guides for highway and city driving, plus an estimate for annual fuel cost based on a specified number of miles

  29. Don’t pay for what you don’t want • Roof rack • Cow catcher • Spinners • AWD

  30. Consider Operating Costs • Gas • Tires • Insurance • Maintenance • Repairs • Check out car magazines • Car and Driver • Road and Track, etc.

  31. Where to look for used cars • New car dealerships • Used car dealerships • Newspaper want adds • Friends and family • Auctions • Fleet discounts • Internet

  32. Buying a Used Vehicle: Questions to ask • Where did it come from • New car dealerships - trade-ins • Used car dealerships – trade ins • Bought from individuals • Rental companies

  33. Company fleets • Taxicab companies • Rebuilt wrecks • Learn the car’s history via • Carfax.com by inserting VIN number from front left dashboard.

  34. How is the Economy Doing? • Use any source you want to, newspaper, TV, radio, parents, the internet, etc., in coming up with an answer tomorrow. • Multiple Choice – We are in… • Recovery • Prosperity • Recession • depression

  35. Evaluating Used Vehicles • Late models may have manufacturer’s/dealer’s warantee. • Usually sold “As is” (WYSIWYG). • You’re responsible for all repairs. • Evaluate in daylight so bright light won’t hide defects. • Get a mechanic’s check and tell the owner you’re going to do it.

  36. Check for rust. • Check for body repairs. • Look around the trunk lid and doors to see if the car has been painted. • Check out the tires to see if they’ll need to be replaced soon (Lincoln). • Check the shocks by pushing down on each fender – cars should settle down quickly an not keep bouncing.

  37. Open and close all windows, doors and trunk. • Look at the condition of the interior to see how well the car has been maintained. • Make sure it has a good spare and jack. • Drive it on different kinds of roads and speeds to see how it rides, handles and sounds with the sound system off.

  38. Test brakes to ensure they are quiet • and stop the car smoothly. • Test all gears, including reverse. • Check all electrical devices: • Turn signals • Headlights, including brights • Radio • Air Heat • Power windows and seats

  39. Cruise • Windshield wipers and washer • Get an odometer statement and talk to the previous owner • Inspect the title • If it has a salvage title, don’t buy it • (totaled by insurance companies and repaired by someone…anyone)

  40. Negotiating • Begins with the Manufacturer’s Suggested Retail Price (MSRP). • Determine the true dealer cost • Copy all info from the window sticker • Use a buyer’s guide to find the actual dealer’s cost of base vehicle and each option. • Total the dealer costs to determine dealer’s invoice price.

  41. Find the dealer’s holdback in the buyer’s guide. • Subtract the holdback from the dealer invoice price along with rebates and dealer incentives. • Add the destination charges to get the true dealer cost.

  42. Add 5% to the dealer invoice for fair profit and expect non-negotiable advertising fees of 1-3% of the sticker price to be added to the total. • If you have a trade-in, use a buyer’s guide to find its wholesale value and try not to accept that it is less than 5% below that wholesale value. • Clean it thoroughly.

  43. Make sure it is in good working condition • Put all paperwork in the glove box • Title • Registration

  44. Subtract the trade-in value of your vehicle from the price you’ve determined in steps 1 and 2 then add: • Dealer prep charges • Documentation fees • Sales tax • License and title fees to reach total cost

  45. Avoid Dealer Extras • Rustproofing • Undercoating • Protection packages • Dealer added options • Extended warranties or service contracts • Dealers charge substantial markups for these unnecessary items

  46. Buying a Used Car • Use a buyer’s guide like: • Edmunds • Pace • NADA Blue Books • To determine the value of a vehicle they’ll give an average trade in and retail value as well as mileage adjustments

  47. Inspect vehicles as indicated before • After inspection, decrease the book value of the vehicle based on its condition. • If you have a trade-in, use a buyer’s guide to find the wholesale value of your trade-in and try not to accept the value that is less than 5% below the wholesale value

  48. Clean it thoroughly • Make sure it’s in good operating condition • Put all paperwork in the glove box • Title • Registration • Subtract the trade-in value of your vehicle from the price you determined in steps 1-3.

  49. Paying Cash • Your cost will include the • Negotiated price • Minus the trade-in value • Minus the down-payment • Plus sales tax on one or more of the following:

  50. Documentation fee • Destination charge • Preparation charge • License and title • Credit Insurance (ok if you choose it) • Dealer charges (avoid)