Cars - CARS ARE 142: Personal Finance Professor Heather...

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Unformatted text preview: CARS ARE 142: Personal Finance Professor Heather Rose UC Davis, Fall 2009 Lecture 7 1 Readings/Announcements Keown Chapter 7 Keown Chapter 8 (pp 224-237) Keown Chapter 10 (pp 331-339) Sethi Chapter 9 (pp 244-250) Fixed typo in Excel slides from chapters 2 and 3 Gradebook Can you see your scores I can see when you turn things in late 2 Cars Shopping for them Distinguishing needs from wants Doing your homework Buying How much should you pay What do you pay with (cash, finance, lease) Protecting them Maintenance Insurance 3 Doing Your Homework Car quality (durability, safety) National Highway Traffic Safety Administration (http://www.nhtsa.dot.gov/) Cost (price you pay and resale value) What you can afford Understand buying process 4 Cost Considerations Price MSRP: Manufactures Suggested Retail Price (the sticker price) Dealers invoice (what University Honda paid Dealer s invoice (what University Honda paid Honda for the civic on its lot) Holdback for dealer Incentives and rebates Other costs Resale value (kbb.com) Insurance (varies from car to car) 5 www.edmunds.com Reviews of different cars Pricing information TMV Forums where people report what they paid True Cost to Own (http://www.edmunds.com/apps/cto/CTOintroC ontroller) Confessions of a car salesman http://www.edmunds.com/advice/buying/art icles/42962/page001.html 6 What are All The Real Costs? Components Example Price you negotiate $20,000 Options 400 Destination fee 500 Subtotal $20,900 Taxes on subtotal (8.75 in Davis) $1,829 DMV fees (~1.5% see next page) 326 Total Paid: $23,055 7 DMV: Vehicle Registration Fee Calculator Fees for Sep 2, 2009, 2009 gas powered auto, price of $20,900, in Davis. 8 Source: https://mv.dmv.ca.gov/FeeCalculatorWeb/newVehicleForm.do Options for Paying Cash Finance (get a loan) Lease Lease 9 Options for Paying: Cash You write a check, they give you a car....
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This note was uploaded on 03/12/2010 for the course ARE 142 taught by Professor Staff during the Spring '08 term at UC Davis.

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Cars - CARS ARE 142: Personal Finance Professor Heather...

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