CHAPTER 14: Car Buying Strategies
CHAPTER 14:Car Buying StrategiesINTRODUCTIONCar Buying Strategies is a 60- to 90-minute programsuitable for all audiences.Purchasing a vehicle is a large investment that can have asignificant impact on an individual’s short-term and longterm financial circumstances. Because purchasing a car canbe a complex process, it is important that buyers understandthe specific steps involved in making a wise purchase. Thischapter is designed to develop knowledge and skills that will enable Marines and their familiesto conduct adequate research on a new car purchase, to determine how much they can afford tospend on a car, and to negotiate effectively when purchasing one.LEARNING OBJECTIVESUpon completion of this course, learners should be able to: Determine how much they can afford to spend on a car. Research available vehicles, lenders and sellers. Negotiate the purchase price of a car, financing and trade-in value.Car Buying Strategies1
REFERENCESAol.auto.com. (2010). New Car Warranties: What’s Covered and What’s Not. Retrieved s.CARFAX. (2011). About Us. Retrieved fromhttp://www.carfax.com/about/car history/hcabout.cfm.Edmunds.com. (2010). Understanding Extended Warranties: Finding Coverage That’s Right forYou. Retrieved from -extendedwarranties.html.Edmunds.com. (2009). Prepaid Maintenance Plans: Smart Move? Or a Waste of Money?Retrieved from nce-plans.htmlFederal Trade Commission. (1997). FTC Facts for Consumers: Auto Service Contracts.Retrieved from 02.shtm.Garman, E.T., & Forgue, R.E. (2010). Personal Finance, 10th edition. Boston, MA: HoughtonMifflin Co.IntelliChoice. (2011). Certified Pre-Owned: Vehicle Inspection Checklist. Retrieved ction.Krueger, H. (November 2010). Buying a Car? Watch for 6 Slippery Sales Strategies. Retrievedfrom https://www.usaa.com/inet/pages/advice slippery sales pitches 2009.Leonard, R. & Reiter, M. (2009). Solve Your Money Troubles: Debt, Credit & Bankruptcy, 12thedition, Berkeley, CA: Nolo.Loonin, D. (2010) Guide to Surviving Debt 2010. Boston: National Consumer Law Center.Nerad, J.R. (1996). The Complete Idiot’s Guide to Buying or Leasing a Car. New York, N.Y.:MacMillan Spectrum/Alpha.Newman, R. (February 2010). 6 Myths About Car Recalls. Retrieved 10/02/10/6-myths-about-car-recalls.Reed, P. (May 2009). Negotiating 101. Retrieved from tml.Reed, P. (May 2009). Shopping for a Fuel Efficient Car. Retrieved or-a-fuel-efficient-car.html.2Car Buying Strategies
USAA. (February 2009). Five Steps to Buying the Right Car. Retrieved fromhttps://www.usaa.com/inet/pages/advice 5 steps buying right car.United States Code. Servicemembers Civil Relief Act. Washington, D.C.U.S. Department of the Navy. Office of the Secretary of the Navy. (2005). SECNAV Instruction1754.1B: Department of the Navy Family Support Programs. Washington, D.C.Visa. Practical Money Skills for Life. (2011). Buying a Car. Retrieved nance/lifeevents/car.Car Buying Strategies3
PREPARATION AND PROCEDURESActivities with Handouts: “The Budget Bottom Line”: A worksheet exercise in which learners calculate theaffordability and total monthly cost of owning an automobile.Additional Handouts: “Buying vs. Leasing” “Car Buying Resources” “Car Buying and Leasing Terminology” “Car Sales Tricks of the Trade” “Determining Car Payments” “Debt-to-Income Ratio” “Installment Sale Contract” “Session Evaluation”Materials: Car Buying Strategies PowerPoint slides Pens, pencils and markers Chart paper or a whiteboard4Car Buying Strategies
Registration:Registration ensures that you have an adequate number of materials on hand and that guestspeakers are prepared if they have handouts or giveaways for their audience. Program registrantsshould be contacted by phone or e-mail two to three days before the program to verifyparticipation. Sign-in is advised to track attendance.Target Audience:The target audience is Marines and their family members with a basic to intermediate knowledgeof personal financial management.Car Buying Strategies5
KEY TERMS Annual percentage rate (APR): A measure of the cost of credit, expressed as a yearlyrate. It must be disclosed before you become obligated on a loan and shown on youraccount statements. Armed Forces Disciplinary Control Board (AFDCB): Established at installations toadvise on and make recommendations to commanders about matters and conditions thatmay affect the health, safety, morals, welfare, morale and discipline of the servicemembers. Customer incentives: Benefits such as cash-back rebates, low-interest financing offersor other perks that are offered directly to buyers from manufactures. Dealer holdback: A percentage of the MSRP or invoice price of a new vehicle; whichcan vary according to the manufacturer, which is repaid to the dealer by the manufacturerusually quarterly. It is generally between 1- 3 percent of the MSRP. Generally the“luxury” models have lower or no dealer holdbacks. The dealer holdback is essentiallydesigned to supplement the dealer's cash flow and profits which indirectly reducesvariable sales expenses, such as sales commissions. This, in effect, artificially elevatesthe dealership’s cost to the customer. Dealer incentives: Factory-to-dealer incentives that reduce the dealer's true cost to buythe vehicle from the factory. Typically a manufacturer will offer these incentives on aregional basis to generate sales on specific models. These incentives can be tied into salestargets and can touch off competition among dealers to move slower-selling stock. Oncea sales target is reached, each subsequent sale could result in a higher factory-to-dealerrebate. If you negotiate, you may be able to get the dealer to pass on some of thisincentive to you. Remember, it costs dealers to keep vehicle inventory in stock. Anincentive does not have to be attached to a particular model. If a vehicle has been on a lotfor a couple of months, dealers are more likely to be flexible on pricing. Manufacturer’s Suggested Retail Price (MSRP): The base price of a vehicle at thetime of introduction, including standard equipment only. The price does not includetaxes, transportation and destination fees. MIOT (Maintenance, Insurance, Operating Expenses and Taxes): The total cost ofowning and operating an automobile.6Car Buying Strategies
National Automobile Dealers Association (NADA): Provides to dealers and consumersnew and used car prices, specifications, pictures, reviews and other information to help inbuying and selling vehicles. NADA also provides industry trends, education and training,and career information. National Independent Automobile Dealers Association: The not-for-profitorganization representing the independent motor vehicle industry to promote, educate andadvance the independent motor vehicle dealer. They provide to the consumer informationwhich will promote a better understanding of the independent motor vehicle dealer’splace in the economy. Non Commissioned Officers Association (NCOA): The NCOA was established in 1960to enhance and maintain the quality of life for non-commissioned and petty officers in allbranches of the armed forces, National Guard and Reserves. The NCOA offers itsmembers benefits and services designed especially for enlisted service members and theirfamilies. United Services Automobile Association (USAA): A Fortune 500 financial servicescompany offering banking, investing, and insurance to people and families that serve, orserved, in the U.S. military.Car Buying Strategies7
QUALITY ASSURANCE PROCEDURESTo assure accurate and current information as well as a quality presentation: Headquarters (HQ) and installation PFMs will review the curriculum annually or whenthere have been consequential changes to content regarding laws, regulations or militaryprograms that could have a significant impact on Marines and their families. HQ willthen update the curriculum. Distribute session evaluations to participants at the end of each workshop. Results shouldbe tabulated and retained to measure the effectiveness of information provided at thesession, in the program content, and of the delivery of the presentation.8Car Buying Strategies
CONTENT OUTLINE (75 MINUTES TOTAL)1. Welcome and Introduction (5 minutes)a. Overview: Topics2. Preparation and Research (35 minutes)a. Know What You Can Affordb. Do Your Homeworkc. Determine Your Car Paymentd. The Budget Bottom Linee. Choosing Your Carf. New Car Considerationsg. Used Car Considerationsh. Warrantiesi. Depreciationj. Insurancek. Performance and Reliabilityl. Fuel Economym. Choosing a Dealershipn. Buying from a Private Sellero. Other Buying Optionsp. Determining a Fair Priceq. Car Pricing Terminologyr. Leasings. Leasing Terminologyt. Car Sales Tricks of the Trade3. Negotiate the Purchase Price (5 minutes)a. Negotiation Strategies4. Negotiate the Financing (10 minutes)a. The Cost of MoneyCar Buying Strategies9
b. Where to Financec. Contract Considerationsd. Contract Strategies5. Negotiate the Trade-In (5 minutes)6. Car Buying Complications (10 minutes)a. Your Legal Rightsb. Repossessionc. Complaint Resolutiond. Unforeseen Situations7. Resources and Summary (5 minutes)10Car Buying Strategies
SLIDE 1: INTRODUCTIONSECTION BACKGROUND INFORMATIONAlmost every Marine will purchase a new or used car whileon active duty. They will spend more of their disposableincome on automobiles than on virtually anything elseexcept food and shelter. This program explores how youcan save hundreds, if not thousands, of dollars on your nextvehicle purchase.SLIDE 2: OVERVIEW: TOPICSAlthough it can be exciting to dream and plan for buying acar, there are many opportunities to make unwise choices ifyou don’t learn about the process before you buy.This program focuses on the steps to follow for a successfuland affordable vehicle purchase:1. Preparation and Research2. Negotiate the Purchase Price3. Negotiate the Financing4. Negotiate the Trade-InINSTRUCTOR NOTES:1. Introduce yourself and havethe participants introducethemselves.2. Introduce the topics to becovered in this session.SLIDE 3: PREPARATION ANDRESEARCHINSTRUCTOR NOTES:Discuss the points on the slideusing the information in thecolumn to the right.5. Car Buying ComplicationsSECTION BACKGROUND INFORMATIONMany people begin the car buying process by visiting adealership — which should be one of the last things theydo. Unfortunately, the process often ends the same day withthe purchase of an inappropriate car at too high of a price.Dealers will ask about financing and trade-ins beforeoffering a bottom-line price so that they can mentallycalculate their profit to the buyer’s disadvantage. You cansave yourself hundreds, if not thousands, of dollars on yournext purchase by doing some homework before you steponto the lot. Then, you will be in control of the buyingprocess.Car Buying Strategies11
To make a successful purchase, there are five things youneed to determine before stepping onto the lot:1. How much vehicle you can afford.2. The type of vehicle you want to buy.3. Where you will buy the vehicle.4. A fair and affordable price for the vehicle.5. Whether you should lease.SLIDE 4: KNOW WHAT YOU CANAFFORDINSTRUCTOR NOTES:Discuss the points on the slideusing the information in thecolumn to the right.12Car Buying StrategiesSECTION BACKGROUND INFORMATIONKnowing what you can afford means knowing how muchyou can spend on the car itself and on its upkeep. To saveyourself money, time and effort, do your homework first todetermine what you can realistically spend on a car.A car costs you more per month than just the loanpayments. There are operating costs, maintenance andinsurance that you need to include in your monthlyexpenses. Your total monthly costs related to your vehicleshould not be more than 25 percent of your net income(what remains after taxes). That 25 percent is made up of a15 percent car payment and 10 percent for maintenance,insurance, operating expenses (fuel, oil, etc.) and taxes(MIOT).You should also determine how much you can put down onthe car. The more money you put down, the less you haveto finance and the lower your monthly payment.
SLIDE 5: DO YOUR HOMEWORKSECTION BACKGROUND INFORMATIONDevelop a spending plan: If you already use a budget athome, review it and determine what you can afford to spendon your new car. If you don’t already have a spending plan,now is a great time to start. The benefits of having aspending plan are greater than determining your carpurchase and can affect your entire financial future.Developing a budget or spending plan before buying the caris a win-win situation.INSTRUCTOR NOTES:1. Discuss the points on the slideusing the information in thecolumn to the right.2. Distribute the “Debt-toIncome Ratio” handout to theparticipants. Tell them to useit as a guide, not an absolutemeasure, of their ability totake on more debt.3. Distribute the “Car BuyingResources” handout. Tell theparticipants that the websitesyou are referencing are on thishandout. Let them know theymay want to take some noteson the back of it.Debt-to-income ratio: You will need to know how muchof your money currently goes to pay regular monthly debtsso you don’t overextend yourself by adding a car payment.To find this out, compute your debt-to-income ratio. Thedebt-to-income ratio is a figure used to determine whether aperson is carrying a total debt load that is manageable, onethat might lead to financial difficulties, or one that indicatesa person is in immediate need of debt reduction andsignificant adjustments in their financial lifestyle. Use it asa guide, not an absolute measure of your ability to take onmore debt. Use the scale at the bottom of the handout todetermine whether you have “room” in your budget to takeon more debt. If your debt-to-income ratio is higher than 20percent, you should hold off on taking on more debt. Beaware that SECNAVINST 1740.4 states that your debt-toincome ratio should be no more than 30% in order toreceive overseas orders.Your credit report: Be sure to check your credit report asyou work on your spending plan and debt-to-income ratio.A dealership will request a copy of your report, so it is bestyou look at it first, unless you are paying in cash or havepre-approved financing. Information on how to get yourfree annual credit report is included in the “Car BuyingResources” handout.Pre-approved loan: Consider getting a pre-approved loanfrom your financial institution. This will provideinformation on interest rates, payments and terms inaddition to ensuring you do not overextend yourself onceyou are at the dealership.Car Buying Strategies13
Shop for interest rates on the Internet and at your localbank and credit unions: Find out what interest rates yourbank or credit union is offering. You can also find interestrates for auto loans in your area using the calculator s/auto/car-financepayment-calculator.aspx)SLIDE 6: DETERMINE YOUR CARPAYMENTINSTRUCTOR NOTES:1. Discuss the points on the slideusing the information in thecolumn to the right.2. Distribute the “DeterminingCar Payments” handout to theparticipants.SLIDE 7: THE BUDGET BOTTOMLINE14Car Buying StrategiesSECTION BACKGROUND INFORMATIONAs mentioned earlier, financial advisers usually suggestkeeping total car expenses to within 25 percent of your netincome. Total car expenses include the car loan payment aswell as maintenance, insurance, operating expenses, andtaxes. These can sometimes total up to one-third of themonthly payment. There are several online resources toassist you in estimating the total cost of ownership, such asthe “True Cost to Own” calculator at Edmunds.com.A simple calculation to help you avoid spending more thanyou can afford is to multiply the amount you believe youcan afford to spend each month on your new vehicle (thetotal cost) by .66. This amount will give you a good idea ofwhat the maximum car loan payment is for your currentfinancial situation. Some of the websites referred to on your“Car Buying Resources” handout also offer calculators toassist you.SECTION BACKGROUND INFORMATIONScenario: Cpl. Paul Jones and his wife, Connie, arethinking about buying a new car. They have figured outtheir basic income and daily living expenses as well assavings and debt and have developed a budget. They havea pretty good idea about the type of car they want and whatit will cost. Connie works part time while their 7-year-olddaughter is in school. They currently own one car, which ispaid off. They live in base housing. They have anemergency fund of 3,000 for any unexpected, thereforeunbudgeted, emergency expenses.
INSTRUCTOR NOTES:1. Conduct the activity describedbelow.2. Use the information in thecolumn to the right to guideyour discussion of the pointson the slide.Their total net income is 2,536 and their total monthlyexpenditures for utilities, renters insurances, transportationcosts, long and short term savings accounts and credit billsas well as school loans are 1,265.Learner Activity: The BudgetBottom LinePurpose: A worksheet activitywhere individuals will learn howto calculate the affordability andtotal monthly cost of a vehicle.Can Paul and Connie afford this vehicle?Time: 10 minutesAccording to these calculations, the couple has 1,271 leftover each month and therefore can afford both themaximum payment based on net income and the amountthe couple estimated for their chosen vehicle.Materials: “The Budget BottomLine” handout, pens and pencils.Procedure: Give worksheets outto the class. Explain to theparticipants that they will becalculating the budget “bottomline” to determine whether thecost of the vehicle payment andexpenses are affordable — i.e.,will they fit into the budgetwithout creating a budget deficit?Read the opening scenario to theclass or ask for a volunteer toread it.Paul and Connie have picked out a vehicle that suits theirneeds. They have calculated that their total monthly carpayment will be approximately 357.Worksheet Answers: 2,536 x .25 634 634 x .66 418.44 2,536 - 1,265 1,271Having said this, there are many considerations to take intoaccount when developing a budget and making a decisionon a large purchase. You must think beyond the currentpicture. When will your economic picture change? Areyou expecting a PCS move? Will you lose your secondincome when this occurs? Are you planning on adding toyour family within the time frame that you will be makingpayments on your purchase? Do you have adequateemergency funds available? You must consider all andmore of these types of questions when making an informeddecision about how you are going to spend your hardearned money.Consider: Even though the couple’s budget shows asurplus sufficient to purchase the car, what if they have a 35percent debt-to-income ratio?Car Buying Strategies15
SLIDE 8: CHOOSING YOUR CARSECTION BACKGROUND INFORMATIONThe vehicle you purchase must strike the right balancebetween wants, needs and affordability. Everyone hasdifferent preferences for a vehicle and there are manyfactors to consider when deciding what to get.To help you determine what type of car is right for you, theUnited States Automobile Association (USAA) suggeststhat you ask yourself the following questions:INSTRUCTOR NOTES:Discuss the points on the slideusing the information in thecolumn to the right. How many passengers will you need room for and whatare their ages? Do you NEED cargo space or towing capacity or is it awant? Do you drive locally or do a lot of long-distance travel? Do you use child safety seats
Car Buying Strategies 1 CHAPTER 14: Car Buying Strategies I. NTRODUCTION. Car Buying Strategies is a 60- to 90-minute program suitable for all audiences. Purchasing a vehicle is a large investment that can have a
Part One: Heir of Ash Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26 Chapter 27 Chapter 28 Chapter 29 Chapter 30 .
TO KILL A MOCKINGBIRD. Contents Dedication Epigraph Part One Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Part Two Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18. Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26
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DEDICATION PART ONE Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 PART TWO Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 .
The Confident Car Buyer Presentation Outline The purpose of the Confident Car Buyer seminar is to provide tips and tricks on the car buying process. This seminar will review the key car buying stages: 1. The Pre-buy stage – what do people need to know before deciding to buy a car?
About the husband’s secret. Dedication Epigraph Pandora Monday Chapter One Chapter Two Chapter Three Chapter Four Chapter Five Tuesday Chapter Six Chapter Seven. Chapter Eight Chapter Nine Chapter Ten Chapter Eleven Chapter Twelve Chapter Thirteen Chapter Fourteen Chapter Fifteen Chapter Sixteen Chapter Seventeen Chapter Eighteen
18.4 35 18.5 35 I Solutions to Applying the Concepts Questions II Answers to End-of-chapter Conceptual Questions Chapter 1 37 Chapter 2 38 Chapter 3 39 Chapter 4 40 Chapter 5 43 Chapter 6 45 Chapter 7 46 Chapter 8 47 Chapter 9 50 Chapter 10 52 Chapter 11 55 Chapter 12 56 Chapter 13 57 Chapter 14 61 Chapter 15 62 Chapter 16 63 Chapter 17 65 .
Black holes: A physical route to the Kerr metric R. Meinel University of Jena, Institute of Theoretical Physics, Max-Wien-Platz 1, 07743 Jena, Germany meinel@tpi.uni-jena.de Abstract As a consequence of Birkho ’s theorem, the exterior gravitational eld of a spher-ically symmetric star or black hole is always given by the Schwarzschild metric. In contrast, the exterior gravitational eld of a .
