Buy Vs Lease A Car and Car Insurence Flashcards
(23 cards)
Advantages of leasing a car
Lower monthly payment 30-60% less Less money up front to drive car More car for your money- nicer newer car New car more often Buy or get a new car after lease Lease covers all repairs
Disadvantages of Leasing a car
Mileage restrictions 12000 miles Over mileage penalties .15 per mile Need good credit No ownership Fail to build equity and credit Hard to terminate lease agreement
Residual value
Projected market value of a vehicle at the end of the lease
-determines cost of lease
Advantages to buying a car
Ownership Customization Can buy with good or bad credit No mileage restrictions Can sell car at any time
Disadvantages of buying a car
Higher monthly payments
Maintenance costs
Long term loans
Tips when buying a car
Dealerships are lenient Bank and credit unions usually offer lower interest rates Put as much money down as possible Pay less interest overall Take shortest term loan Pay loan early as possible
Advantages of new car
Get exact car you want No wear and tear 3-4 year warranty to pay for major repairs Newest technology Fuel efficiency No maintenance for certain time
Advantages of used car
Lower price
No price depreciation
Insurance rates- lower premiums to insure car
Wide selection
Insurance
Way to insure you are protected from financial loss
- will cover costs to fix damages done to vehicle
Policy
Contract between you and your insurance company
Agent
Person that sells insurance policies
Premium
Amount of money you pay every month for your insurance coverage
- company decides your premium by how much of a risk you are
Risk
Possibility of financial loss
-higher risk=higher premium
Factors of risk
Make and model
Vehicle age and mileage
Your age
Driving record
Deductible
Amount you pay before the insurance company begins to pay for the loss
-higher deductible= lower premium
Claim
File reported by a person seeking recovery from a loss
Auto liability insurance
Liability means obligation. If an accident Happens liability insurance will pay for injured parties properties
Bodily injury liability
Coverage to injury you cause to others
Personal injury protection (PIP)
Coverage for your injuries
- medical payments, lost wages, funeral costs
Property damage liability
Coverage pays for the da,ages you cause to someone else’s property
-another car, building etc
Collision
Coverage pays for damage to your car resulting from a collision with another car
- even if you’re at fault pay deductible to cover cost
Comprehensive
Coverage pays for loss due to theft or damage caused by something other than a collision with a car
- vandalism
Uninsured motorist
Coverage pays for damages caused by an uninsured motorist or hit and run driver
