Transportation Going Mobile
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;
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;
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.
Transportation Systems • Provide freedom in regard to living, working and shopping, • Increase economic activity and • Provide for efficient distribution of goods and services.
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.
Transportation Needs • Travel to • School • Shopping • Work • Recreation • Related to financial resources • Physical limitations • Time availability • Travel type vs. availability
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
Bus advantages • Leave the driving to us • Low price • Bus disadvantages • Schedule • Traffic concerns • Seedy riders • Frequent stops
Air advantages • Speed • Safety • Air disadvantage • Schedule • Airport locations • Cabin air
Mass transit advantages • Price • Leave the driving to us • Mass transit disadvantages • Schedules • Travel companions • Distance to access • Frequent stops • Traffic?
Walking • Exercise • Door to door transportation • No parking • No schedule • Walking Disadvantages • Travel time • Weather?
Bicycling Advantages • Exercise • Door to door transportation • Low/no cost parking • No schedule • Bicycling Disadvantages • Travel time • Weather?
Car Advantages • Relatively efficient schedule • Relatively convenient parking? • Car Disadvantages • Traffic • Cost? • Safety?
Transportation Costs • Explicit costs • Fixed costs • Depreciation • Lost interest on capital invested • Variable costs • Gas • Maintenance • Repairs
Implicit costs • Social costs • Subsidies
Non-economic Selection Factors • Scheduling freedom • Flexibility • Availability • Convenience • Service • Value of time • Reliability • Comfort • Style • Status • Safety • Privacy
Auto Aquisition • There are hundreds of new • Cars • Trucks • Vans and • SUVs • every year
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
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
Options? • AM/FM radio or satellite • Side air bags • On Star • Smooth ride/steering • Multi-changer CD player • DVD player
Can you afford it? • Buy or lease • Cash or finance • Insurance • Maintenance and repair
Where to look for new cars • New car dealerships • Buying services • The Internet
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
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
Buying Services also provide • Financing • Leasing • Extended service contracts and • Dozens of Internet sites provide services to buying services, but you make the deal
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)
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
Don’t pay for what you don’t want • Roof rack • Cow catcher • Spinners • AWD
Consider Operating Costs • Gas • Tires • Insurance • Maintenance • Repairs • Check out car magazines • Car and Driver • Road and Track, etc.
Where to look for used cars • New car dealerships • Used car dealerships • Newspaper want adds • Friends and family • Auctions • Fleet discounts • Internet
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
Company fleets • Taxicab companies • Rebuilt wrecks • Learn the car’s history via • Carfax.com by inserting VIN number from front left dashboard.
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
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.
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.
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.
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
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)
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.
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.
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.
Make sure it is in good working condition • Put all paperwork in the glove box • Title • Registration
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
Avoid Dealer Extras • Rustproofing • Undercoating • Protection packages • Dealer added options • Extended warranties or service contracts • Dealers charge substantial markups for these unnecessary items
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
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
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.
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:
Documentation fee • Destination charge • Preparation charge • License and title • Credit Insurance (ok if you choose it) • Dealer charges (avoid)