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Chapter 16

Chapter 16. Buying/Owning a Vehicle. What are some questions you should ask yourself before buying a vehicle? What type is best for me? Operating expenses? Insurance costs? Buy vs Lease What's a fair price? What can I afford? What features do I need?.

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Chapter 16

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  1. Chapter 16

  2. Buying/Owning a Vehicle • What are some questions you should ask yourself before buying a vehicle? • What type is best for me? Operating expenses? • Insurance costs? Buy vs Lease • What's a fair price? What can I afford? • What features do I need?

  3. Do I Really Need A Car? • Can I afford a car? Purchase price (This is the largest expense) • maintenance, oil & gas, repairs, insurance & license (operating costs) • Am I mature enough for this responsibility?

  4. Factors in Selecting a Car Safety • Air bags • Crash test stats • ABS brakes Comfort Size Fuel efficiency

  5. Buying a Used Car • Usually no warranty • Should test drive/checked by mechanic • Find Blue Book value (National Auto Dealer's Assoc Guide)

  6. Leasing vs Buying • Leasing • paying for the "use" of a car • a new car every few years • Always have car payments • Financial penalties for high mileage

  7. Buying • Paying for the purchase of a car • Can have some years where you have no car payments • Older cars have more repairs

  8. Insurance • Basic Auto Insurance in NJ - $5000 property damages per accident/ $15,000 personal injury per accident • Protects you against major financial loss • Shop around- prices vary from company to company

  9. Deductible- the amount you pay for damages • Depreciation - a steady drop in the value of the car

  10. Types of Insurance • Liability - body & property • Comprehensive • Uninsured/underinsured • Collision • Medical-payments • Towing • No-fault

  11. Liability • Bodily-injury : Pays for claims and lawsuits by people injured as a result of an auto accident caused by you • Property-damage: Pays for claims and lawsuits by people whose property is damaged as a result of an accident caused by you

  12. Comprehensive • Coverage for damage to your car that is not a result of collision • Hit an animal/theft/vandalism/fire/flood

  13. Uninsured/Underinsured • Pays for property damage or bodily injury if you are in an accident caused by an uninsured/underinsured motorist

  14. Collision • Pays for damages to your vehicle caused by a collision with another car or object

  15. Medical Payments • Pays for medical costs for you and your passengers who are injured

  16. No Fault Some states have this because of court backlogs. Your own insurance covers costs - regardless of who is at fault.

  17. Insurance Rates • Determined by: • Driving record - convictions and moving violations pay more • Age - younger pays more usually under 25 • More miles driven annually = higher premiums • Having safety & antitheft devices

  18. Driver Gender- males tend to pay more however the gap is narrowing • Marital Status - married = lower premiums • Type of vehicle - some popular models tend to be stolen more often & some larger vehicles cause greater damage to vehicles they hit • Where you live - rural areas = less premiums • Claim record - more frequent claims = higher premiums

  19. Assigned-Risk Insurance • High premium insurance available to those drivers who have had their insurance cancelled due to a poor driving record • Must drive for violation free for several years before qualifying for standard insurance

  20. Helping the Environment • Mass transportation - moves large numbers of people from place to place - decreasing exhaust emissions • Car Pooling - sharing transportation • Solar and electric & hybrid powered vehicles

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