CARSARE 142: Personal FinanceProfessor Heather RoseUC Davis, Fall 2009Lecture 71Readings/AnnouncementsKeown 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 3GradebookCan you see your scoresI can see when you turn things in late2CarsShopping for themDistinguishing needs from wantsDoing your homeworkBuying How much should you payWhat do you pay with (cash, finance, lease)Protecting themMaintenanceInsurance3Doing Your HomeworkCar quality (durability, safety)National Highway Traffic Safety Administration (http://www.nhtsa.dot.gov/)Cost (price you pay and resale value)What you can affordUnderstand buying process4
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Cost ConsiderationsPrice MSRP: Manufactures Suggested Retail Price (the sticker price)Dealer’s invoice (what University Honda paidDealer s invoice (what University Honda paid Honda for the civic on its lot)Holdback for dealerIncentives and rebatesOther costsResale value (kbb.com)Insurance (varies from car to car)5www.edmunds.comReviews of different carsPricing informationTMVForums where people report what they paidTrue Cost to Own (http://www.edmunds.com/apps/cto/CTOintroController)Confessions of a car salesman http://www.edmunds.com/advice/buying/articles/42962/page001.html6What are All The Real Costs? ComponentsExamplePrice you negotiate$20,000Options400Destination fee500Subtotal$20,900Taxes on subtotal (8.75 in Davis)$1,829DMV fees (~1.5% see next page)326Total Paid:$23,0557DMV: Vehicle Registration Fee CalculatorFees for Sep 2, 2009, 2009 gas powered auto, price of $20,900, in Davis.8Source: https://mv.dmv.ca.gov/FeeCalculatorWeb/newVehicleForm.do