| A | B |
|---|
| Private sellers, classified ads, and auctions | sold “as is,” receive no warranty |
| Research makes and models | important factors to consider |
| Safety | brakes, airbags, head restraints |
| Reliability | check consumer magazines and Internet for quality and reliability marks |
| Fuel economy | type of fuel used and miles per gallon |
| Power and performance | acceleration, handling, braking, and acceleration |
| Comfort and convenience | headroom, legroom and storage for cargo |
| Insurance rates | vary according to data tables on repair costs of various makes/models |
| Warranties | generally provide for repair/replacement of defective parts during warranty period |
| Used vehicles | book value is the estimated value of a given make, model and model year |
| Invoice price | the price the dealer pays the manufacturer |
| Base Price | the price of a vehicle with standard equipment |
| Options and option packages | features available at extra cost or special prices |
| Manufacturer’s suggested retail price (MSRP)--- | Base price + price options installed by manufacturer + manufacturer’s transportation charge |
| Sticker price | Dealer’s initial asking price as found on the sticker on the window |
| Up front costs | made when signing lease---includes deposit, taxes, and registration fees |
| Leasing | monthly payments in exchange for exclusive use of vehicle for specified time |
| Capitalized cost | price for the leased car |
| Capitalized cost reduction | similar to down payment; results in lower monthly payment |
| Lease term | length of the lease---24, 36, or 48 months |
| Interest rate | should be lower than with new car loan rates |
| Monthly payments | made by lessee---pays for vehicle depreciation- difference between vehicle’s original value and value at end of lease period |
| Residual value | worth of vehicle end of lease; higher residual = lower payments |
| End-of-lease costs | cover penalty charge for ending lease early, expense of “disposing” of the vehicle, fee if mileage limit is exceeded, any significant wear and tear to vehicle |
| Buying | buyer takes out a loan and pays for the vehicle with monthly payments---costs more than paying cash because includes interest on amount borrowed |
| Dealer financing | easy, on-the-spot source |
| Installment loan | secured at banks, credit unions, finance companies, savings and loan |
| Lending institution | holds title of vehicle for collateral until loan paid |
| Size of payment | depends on length of time to repay loan |
| Annual percentage rate | the higher the rate the more money paid |
| Auto superstores | sell new and used vehicles from huge inventories |
| The Internet | a source of information on makes, models, ways to lease and purchase |
| Traditional dealerships | represent one or two manufacturers, selling new and/or used |
