Researching an
Automobile
What should I look for?
1.16.2.G1
Transportation



Part of everyone’s life
15 – 20% of an individual’s budget
Automobile is the 2nd most
expensive purchase, only after a
home
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Want to Buy a Vehicle?



Consumers should plan their vehicle purchase to
avoid any costly mistakes
Any large purchases should be planned
Places to purchase a vehicle:
• Dealership, private owner, internet
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Planned Buying Process
1.
2.
3.
4.
5.
6.
7.
Prioritizing wants
Pre-shopping research
Fitting the budget
Comparison shopping
Negotiating
Making the decision
Evaluating the decision
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Step 1 - Prioritizing
Wants

Assess transportation needs and wants
• Need: something thought to be a necessity
• Want: something unnecessary but desired

Consider all automobile options as wants
• Prioritize the wants from low to high priority
• Prioritizing wants helps the consumer
• Consider costs and benefits of different vehicle options
• Consider the “big picture” of the vehicle purchase rather than
a specific want (such as heated seats, color, engine size, etc)
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Prioritizing Wants –
Questions to Think About





How will the vehicle be used?
Where will the buyer be living?
How will the vehicle be stored or
parked?
How much will it be driven?
What options would the buyer like in
the vehicle?
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Step 2 – Pre-shopping
Research



Research should be based on transportation wants
Complete this before visiting a car dealership or
salesman
Helps the buyer to be informed about:
• What they are looking for
• Vehicles in their price range
• Available options
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Ways to Perform the
Research

Family & friends
•
•

Periodicals
•
•
Experiences with different
makes and models of
different vehicles
Likes, dislikes, and
recommendations
•
•
•

Consumer Reports
Federal Citizen
Information Center
Kelley Blue Book
Motor Trend
Car and Driver
Access this information at the
public library and/or the internet
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Price Research

Price
• Base price: vehicle price with standard equipment, no
•
extra options
MSRP: Manufacturer’s suggested retail price
• Includes base price, price of options installed by manufacturer,
and their transportation charge
• Sticker Price
• Dealer’s initial asking price
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Price Research
continued

Price continued
• Determine how much a dealer paid to help decide which
vehicles to consider and to negotiate a fair price
• Consumer Reports, Kiplinger’s Personal Finance magazine, and
Edmund’s New Car Prices
• Used cars
• Blue book price: dollar value given to the vehicle based on its year
and model
• Used as a guide for car dealers and banks for pricing trade-ins
• Kelley Blue Book
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Vehicle Options
Research

General type of vehicle
•

Make and model
•

Ford Taurus, Honda Accord
Safety
•

Car, truck, 2-door, SUV, sporty
Braking and emergency handling, airbags
Reliability
•
Some specific models have high marks, may be higher priced but
will save on repair costs
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Vehicle Options
Research continued

Fuel economy
• Type of gas used, gas mileage

Power and performance
• Driving on highways, steep hills, mountains, snow,
muddy roads, or in a city

Comfort and convenience
• Size of headroom and legroom, cargo space
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Vehicle Options
Research continued

Insurance
• Chosen vehicle affects the price of insurance; obtain a
quote for the vehicles being considered

Other options
• Power steering and brakes, manual or automatic, air
conditioner, rear-window defogger, radio/tape/CD
player, type of tires, cruise control, sun roof, heated
seats, power door locks and windows, etc.
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
New vs. Used Research

New Vehicle:
•
•
•
•
•
•
Not pre-owned
Warranty
Manufacturer options
Wide selection
Expensive
Depreciation
• Loss in the vehicle’s value

due to time and use (greatest
cost)
Used Vehicle:
•
•
•
•
•
•
•
Cost less to buy
Cost less to insure
Avoid rapid deprecation
Wide selection
May offer warranty
Returned leased cars
Have an independent
mechanic inspect any used car
before purchase
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Step 3 – Fitting the
Budget

“Can I afford it?”
• Most important question


Amount the buyer can afford in his/her budget
dictates the vehicle price
All costs must be taken into consideration before
choosing a vehicle
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Fitting the Budget
continued
*Vehicle price is not the only cost involved

Fixed expenses
•
•
•
•
•
•
Depreciation
Insurance costs
Loan payment and interest
if financed
Parking fees
Licensing
Registration

Flexible expenses
•
•
•
•
Maintenance
Gas
Oil
Repairs
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Stop to complete
activity
1.16.2.G1
Step 4 – Comparison
Shopping


Comparing services or products to determine the
best buy or quality product at a fair price
Allows the consumer to build upon the
information learned in the pre-shopping research
*As the price of a vehicle increases, consumers are
often not buying additional safety, capacity, or
power, but instead style and prestige
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Comparison Shopping
continued


Narrow the choices to a few specific makes and
models with desired options
Visit the appropriate store to learn more
information about each choice to make
comparisons
• Inquire about price, dealer incentives, financing options,
leasing, warranties, and service contracts

Test drive each potential vehicle
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Comparison Shopping
continued

Goal of comparison shopping
• Narrow the choice even further to
negotiate for the
best deal
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 20
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Step 5 - Negotiating



Process of deciding the actual terms of the
purchase and agreement between the seller and
buyer
Obtain a firm price before discussing any other
aspects including a trade-in
Compare prices from different dealers
• Let them know you have done your research and
whether their price is high
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 21
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Negotiating continued

Keys to all negotiations
• Be able to say NO
• Take the purchase to another business
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 22
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Step 6 – Making the
Decision

The best place to decide on which vehicle to
purchase is NOT the showroom where you are
around the dealer
• Take the information home to compare all options

After making the decision, return to the dealer to
close the sale
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 23
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Step 7 – Evaluating the
Decision

Think about the things which went well and what did
not
•


This will be helpful the next time a similar purchase is made
If the process was successful and you are happy,
compliment the seller
If you have a complaint, make the complaint known to
the seller then move to the supervisor if necessary
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 24
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Lemon Laws

Lemon
• A vehicle in and out of the repair shop with problems
monthly

An estimated new 150,000 vehicles sold each year
are lemons.
• Money Troubles, 2001, Leonard

All states have enacted lemon laws
• Specifics vary state-to-state and are in place to protect
consumers
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 25
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Lemon Laws continued

To fall under the lemon law
• New vehicle must have a substantial defect which
•

cannot be fixed in a reasonable time
Defect remains unfixed after four repair attempts or the
vehicle remains in the repair shop for a total of 30 days
This allows the consumer the right to a refund or
a new vehicle
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 26
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Lemon Laws continued

What should you do if you feel you have
purchased a lemon?
• Contact the state’s attorney general office to request
information on the state’s lemon laws and how to use
them if they have purchased a lemon
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 27
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.16.2.G1
Conclusion

Before purchasing a vehicle, follow the planned buying
process to avoid a costly mistake
1.
2.
3.
4.
5.
6.
7.
Prioritize wants
Pre-shopping research
Fit the budget
Comparison shop
Negotiate
Make the decision
Evaluate the decision
© Family Economics & Financial Education – Revised December 2004 – Transportation Unit – Researching an Automobile – Slide 28
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona