Navigating Vehicle Ownership Laws and Financing Options

1. Owning A Vehicle Chapter 16 Part I

2. Laws of Ownership • There are laws from different sources to protect buyers and sellers • Vehicles are considered “goods” • The “Uniform Commercial Code (UCC)” applies to their sale and lease • If you buy a vehicle for personal, family, or household purposes, both federal and state consumer protection laws may also apply • Financing a vehicle has special laws that regulate credit

3. Financing a Vehicle • One of the 1st steps in buying a vehicle is deciding how much you can AFFORD • You can pay CASH or FINANCE it • Federal law requires lenders to disclose the finance charge and annual percentage rate (APR) to borrowers • Finance charge is the cost of the loan in dollars and cents • APR is the true interest rate of the loan • You can get financed (get a loan) from a bank, credit union, or the dealership

4. Before you sign!!!! • You should know the following information: • The exact price you’re paying for the vehicle • The amount you are financing • The finance charge • The APR • The number and amount of payments • The total sales price (the sum of the monthly payments plus the down payment)

5. Buying a New Vehicle • Do research 1st – magazines, on-line, visit dealerships • Check out • Safety options • Crash ratings • Maintenance • Performance • Affordability • Dealers are willing to negotiate - they will bargain on their profit margin between 10% and 20%

6. Buying New – TRADE-IN • Your current vehicle that you OWN can be used as a ‘trade-in’ towards another vehicle • Research the value of your trade-in using the Internet • Kelly’s Blue Book (kbb.com) • Most times it is better to sell the vehicle yourself (outright) • Trading a vehicle in to a dealership is convenient

7. Leasing a New Vehicle • A popular alternative to buying • Is the most expensive way to get a vehicle • Advantages: • Low down payment • Smaller monthly payments • Always have a newer vehicle • Disadvantages: • No ownership • Still responsible for regular maintenance and insurance

8. “Consumer Leasing Act” • Federal law requiring businesses to tell you all of the terms of the lease • Federal law regulates advertisements of leases • They include……. • The amount of payment • Length of payments • Down payment requirements • Consumer’s responsibility at the end of the lease • Whether the consumer can purchase the vehicle

9. What do YOU think? Do you think leasing is a wise option for obtaining a vehicle? Explain your answer. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________