3134 TOPIC 4 Making Car & Housing Decisions.doc

3134 TOPIC 4 Making Car & Housing Decisions.doc - TOPIC...

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TOPIC 4: MAKING CAR AND HOUSING DECISIONS Purchasing big ticket items, such as an automobile or a home, requires much care and planning. Numerous nonfinancial and financial considerations are involved are in the decision whether to buy or lease appropriate and affordable transportation and housing, consistent with your personal financial goals. Additionally, home ownership can represent an appreciating asset that may also provide tax benefits while meeting a family's needs for shelter and security. a) BUYING A CAR 1. Factors to consider i. Affordability Once you know how much you can afford to buy, operate, and maintain, you can look for models suitable for your needs and budget. ii. Operating Cost Operating costs include loan payments, insurance, license fees, repairs, gas, oil, tires, and other maintenance. Some cars are more expensive to operate than others. 1
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It is important to consider operating expenses as well as the cost of the car when evaluating affordability. iii. Gas, diesel or hybrid It is important to consider the differences between the costs and performance of differently fueled vehicles and decide which type you want before shopping for a specific new or used car. Diesels are noisier, have less acceleration and more power, and have longer engine lives than traditional gas powered cars. Hybrids are very economical and less polluting than gas- and diesel-powered vehicles. Disadvantages of hybrid cars: high cost of battery replacement, more sluggish acceleration, generally higher repair costs, and the typically higher initial purchase price. iv. New or used car The new car is the most expensive but typically has the best warranty. Used cars cost less, but it can be difficult to accurately assess the mechanical condition of the car. 2
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Warranty coverage, if available, covers a shorter time period and may be limited . v. Size, body styles and features The choice of size, body style, and features affects the purchase price and operating costs. By selecting the desired options before shopping, you can avoid pressure from the salesperson to buy a car loaded with options you don't want. vi. Reliability and warranties Comparing the reliability records of the cars that interest you, you can select the car with the lowest need for repairs and hopefully reduce your maintenance costs. Manufacturers who offer longer warranty coverage can also save you money. 2. Other considerations What to do with present car Mileage rating and safety features Insurance cost 3
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3. Buying the Car Research on the types of cars available, their features, price, reliability, and other key factors – it will help to determine which car is best suited for your needs and budget.
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  • Spring '18
  • JANE
  • Car, new car

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