Copy of 1 NGPF Buying a Car lecture notes for semester 1 PDF

Preview

Summary

It has lecture notes for semester one of Buying a car NGPF if needed...

Description

Semester Course 9.6 Buying a Car

Name: In this lesson, you will learn to: ● ● ● ●

Identify the steps they can take to find a car that meets their needs and budget Understand the pros and cons of financing from a bank or credit union vs. from a dealership Explain how the terms of an auto loan impact how much they pay overall for the car they are buying Use negotiating strategies to practice the process of “haggling” for a car

RESOURCES

QUESTIONS Estimated time: 5 mins

2

10 Steps to Finding the Right Car for You Skim this web page to see what steps you can take to find a car that meets your needs. Then, answer the questions.

1.

Suppose you have just graduated from college and are looking for a reliable used, but nice, car. Which of the items under “Assess Your Needs” would you care most about? Are there additional items not listed that matter to you?

2. -In my car I do need many seats to drive all my friends around -Have a lot of miles - Have an electric car -Make sure it's not a stick shift - Have a big trunk space

3.

What is the rule of thumb for how much you should spend on vehicle expenses per month?

-Shouldn't exceed 15% of your budget

4.

What other costs of ownership do you need to factor in when thinking about your vehicle costs?

-

Insurance Gas Oil changes Tires

www.ngpf.org

Last updated: 8/1/19

1

Estimated time: 5 mins

3

Financing or Leasing a Car Let’s say you’ve found the perfect car to buy. Congratulations! However, you probably need to take out an auto loan. Who should you borrow from - a financial institution like a bank or credit union? Or, should you borrow straight from the dealership? Read the section “Should I Use Financing to Buy a Car” of this article to see which option is better for you. Then, answer the questions.

1.

How are direct lending and dealer financing similar? Different? When Lending your financing with the bank, you have to make monthly payments and have a finance charge You apply financing with the dealership and also making monthly payments Your still financing a car and paying a finance charge Direct lending your pre approved

2.

Which seems like the better option? Why?

-

Direct lending because there's a certain amount I can spend and know what to look for.

Estimated time: 18 mins

4

COMPARE: Auto Loans You’ve chosen a financing option and are now comparing different loan offers. Which one should you choose and why? Follow the directions on the worksheet to complete this activity and to learn more about comparing auto loans.

Molly is celebrating her exciting new career and wants to upgrade her junky old car for a shiny new Jeep Patriot. She heads to Jeep’s website and sees the following financing deals:

Note: For this activity, assume Molly’s going to pay the exact MSRP of $25,495. This is most likely NOT true, but we’ll use it for simplicity.

Part I: 0% APR sounds PERFECT! Answer the following questions using the details from the 0% APR offer www.ngpf.org

Last updated: 8/1/19

2

above. Please round all answers to the nearest dollar. 1. Molly has a $2500 down payment saved for this purchase, and the dealer’s $1500 Cash Allowance will come straight off her total. How much loan does Molly need? $21,495 2. How much will Molly’s monthly payment be? $597.08 3. How much total interest will Molly pay using this plan? $0.00 4. When Molly adds all of her payments, how much will the car cost her? $21,495

Part II: Maybe the 1.9% is more manageable? Oh, boy! Look at that monthly payment from Question 2 above! Molly cannot afford the monthly payment using the 0% financing. She opens up Bankrate’s Loan Calculator to see how much she’d pay with the other financing option. 5. Remember that Molly has a $2500 down payment saved for this purchase. The dealer will take the $500 Cash Allowance straight off her total. How much loan does Molly need? $22,495 6. Using the Loan Calculator and the 1.9% APR offer, how much will Molly’s monthly payment be? 286,89 7. How much total interest will Molly pay using this plan? $1,546.84 8. When Molly adds all of her payments, how much will the car cost her using this plan? $24,410.84 Reflection: 9. Why would someone choose an auto loan where they have to pay interest instead of getting a 0% interest loan? 10.

Estimated time: 7 mins

5

The Art of the Deal: How to Haggle for a Used Car When buying a car, you want to negotiate and get the best deal you can. Watch the video to learn about some of these negotiating strategies. Then answer the questions.

1.

Why is it important to “haggle” when negotiating to buy a car?

So you can get a cheaper price on the car.

2. www.ngpf.org

What strategies were most effective during the “haggling” process? Why Last updated: 8/1/19

3

do you think they were effective? -

3.

Ask for the first price Leave the lot Shop more than one dealer ship and make it known Give good reasons and a good number Make a smaller increment

Do you think that you could successfully negotiate a fair price for a car? If yes, why? If no, what could you do to help prepare yourself?

I feel like I really couldn't but I would have to do my research and see the prices and practice negotiating.

www.ngpf.org

Last updated: 8/1/19

4...