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CHAPTER12.pptECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
WHAT’S AHEAD
12.1 Transportation Basics
12.2 How to Choose a Car
12.3 To Buy or Lease?
12.4 The Car-Buying Process
12.5 How to Maintain a Car
Economic Educatin for Consumers
Economic Educatin for Consumers
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Chapter 12
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Chapter 12
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
LESSON 12.1
Transportation Basics
GOALS
Describe the importance of transportation in American society.
Discuss transportation alternatives to cars.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
KEY TERM
carpool
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Transportation and Society
When do you use transportation?
Local, state, and federal transportation offices
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Transportation Options
Individual transportation
Public transportation
Carpooling
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Individual Transportation
Bicycles
Inline skates
Motorcycles
Safety equipment
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Public Transportation
Cost
Convenience
Speed
Environmental benefits
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How important is transportation in the American lifestyle?
What methods of transportation can you choose besides driving a car?
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How important is transportation in the American lifestyle?
Americans travel more than people in any other nation.
Travel is an important part of the American way of life.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What methods of transportation can you choose besides driving a car?
Bicycles
Inline skates
Motorcycles
Walking
Public transportation (buses, trains, etc.)
Carpooling
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
LESSON 12.2
How to Choose a Car
GOALS
Explain how to determine whether you should buy a car.
Describe how to evaluate your choices in new and used cars.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
KEY TERMS
odometer
feature
option
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Should You Buy a Car?
Can you pay for a car?
New or used car?
Reliability
Cost
Mileage
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What Car Is Right for You?
What class of car?
Which model?
Features and options
Dealer add-ons
Extended warranty
Safety features
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How to Evaluate a Used Car
You should inspect a used car carefully before buying.
After evaluating the car, take it to a mechanic you trust as a final check before you buy.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Which factors should you consider when deciding whether or not to buy a car?
Where can you find information to help you decide what car is right for you?
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Which factors should you consider when deciding whether or not to buy a car?
Can you fit this cost into your budget?
Spend no more than 20 percent of your take-home pay on a car.
New cars are more reliable and may be higher quality, but they are more expensive to buy and lose value more quickly than used cars.
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Where can you find information to help you decide what car is right for you?
Kiplinger’s Personal Finance Magazine
Edmunds
Kelley Blue Book
Consumer Reports
Car magazines
Internet
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
LESSON 12.3
To Buy or Lease?
GOALS
Explain how to finance the use or purchase of a car.
Describe how to evaluate documents you will be asked to sign when you buy or lease a car.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
KEY TERMS
rebate
leasing
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Finance Options
Dealer
Credit union
Local bank
Internet
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Leasing
How a lease works
Lease terms
Gross capitalized cost Monthly payment
Capitalized cost reduction Mileage allowance
Acquisition fee Excess wear fee
Residual value Disposition fee
Money factor
Steps to leasing
Who should consider a lease
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Steps to Leasing
Step 1: Negotiate the price of the car
Step 2: Know the residual value
Step 3: Make down payment and security deposit
Step 4: Arrange financing
Step 5: Check leased car before you return it
Step 6: Return your leased car
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
The F&I Office
Financing
Insurance
Optional products
The sales contract
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
The Sales Contract
Cash price
Down payment
Unpaid cash balance
Insurance premiums
Other costs
Principal amount financed
Finance charge
Total cost of the loan
Payment schedule
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
Economic Educatin for Consumers
Economic Educatin for Consumers
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Chapter 12
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Chapter 12
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What are the steps in leasing a car?
What kinds of products will the F&I manager want to sell you?
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What are the steps in leasing a car?
Negotiate the price of the car
Know the residual value
Make the down payment and security deposit
Arrange financing
Check your leased car thoroughly before returning it
Return your leased car to the dealer
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What kinds of products will the F&I manager want to sell you?
Insurance policies, such as accidental death and dismemberment, gap protection
Extended warranty protection
“Add-ons,” such as rust proofing
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
LESSON 12.4
The Car-Buying Process
GOALS
Explain how to calculate a fair price.
Describe how to negotiate the purchase of the car you want.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
KEY TERMS
invoice price
sticker price
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Determine a Fair Price
The invoice price
Sticker price
How to calculate a fair price
Your trade-in
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
The Buying Process
Where to shop
When to shop
Test drive
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How to Negotiate the Deal
Round 1—make your first offer
Round 2—wait for a counteroffer and make a new offer
The final price
Read all paperwork
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How can you determine a fair price for the car you want?
What events should you expect to take place in the car negotiation process?
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How can you determine a fair price for the car you want?
The fair price for a car is roughly 3 percent more than the invoice price.
Invoice price of cars can be obtained from Consumer Reports, Edmunds, Kelley Blue Book, or MSN Autos.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What events should you expect to take place in the car negotiation process?
Make an offer.
Evaluate the counteroffer.
Continue this process until you reach a fair price.
Be sure to read all the paperwork.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
LESSON 12.5
How to Maintain a Car
GOALS
Identify routine maintenance checks you should make on your car.
Explain how to find and do business with an automobile repair shop.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
KEY TERMS
owner’s manual
maintenance schedule
dipstick
tune-up
rebuilt (reconditioned)
lemon law
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Every Car Needs Maintenance
Your owner’s manual
Routine preventive tasks
Tires
Oil
Other fluids
Tune-ups
Brakes
Other routine checks
Exterior maintenance
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Repair Services
How to choose a repair shop
Check them out
Build a relationship
Doing business with a repair shop
Describe the problem
Get an estimate
Guarantees
Check and pay for repairs
Save your receipts
Resolve problems
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
Lemon Laws
All states have lemon laws that protect consumers who buy defective new cars.
Generally a car is defined as a lemon if it has
a defect that cannot be fixed after four attempts
continued major problems that keep it in the shop for 30 days during the warranty period
numerous major problems
If a car qualifies as a lemon, you have a choice—replacement or refund.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What types of maintenance should be performed on your car at regular intervals?
How can you find a good repair shop, and what can you expect from the shop when you take your car for service?
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
What types of maintenance should be performed on your car at regular intervals?
Check oil and other fluids regularly and replace them according to the maintenance schedule.
Look under the car to find any leaks.
Check tires and hoses periodically.
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 12
How can you find a good repair shop, and what can you expect from the shop when you take your car for service?
Ask friends and family for recommendations.
Check with the Better Business Bureau.
Look for posted training certificates.
Observe if the shop appears to be tidy and well run.
Expect a written estimate and an explanation of work to be done, an invoice that itemizes labor and parts, and a guarantee for work done.
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