Book Opener

Acquiring a Vehiclel How to identifyimportant parts of aloan agreementl How to trade in avehiclel How to identify thepros and cons ofleasing a vehiclel How to compareoptions for buying apre-owned vehiclel How to pursue legalremedies if you buy adefective vehiclel How to recognize somefederal laws designedto protect you whenyou buy a vehiclel How to summarizethe legal aspects ofrepairing your vehicleKnowing about financing,buying, and leasing avehicle will enable you tomake better purchasedecisions.l finance chargel annual percentagerate (APR)l Used Car Rulel Buyer’s Guidel repossessl adhesion contractLaws of OwnershipYou will probably buy many automobiles in your life. The law thatapplies to these purchases comes from several different sources. Becausecars are considered goods, the Uniform Commercial Code (UCC)applies to their sale and lease. If you buy a car for personal, family, orhousehold purposes, both federal and state consumer protection lawsmay also apply. In addition, if you finance the car, special laws regulatecredit.Financing a VehicleOne of the first steps in buying a car is to decide how much you canafford to pay. This determination depends on your savings, monthlyearnings, living expenses, and any debt that you have.When buying a car, you will save money by paying cash becausecar loans require you to pay interest. Offering to pay cash also puts youin a better position to negotiate a lower purchase price. If you decide toborrow money to purchase a car, you may save money by shoppingaround for credit. Federal law requires lenders to disclose the financecharge and annual percentage rate (APR) to borrowers. The financecharge is the cost of the loan in dollars and cents, and the annualpercentage rate (APR) is the true interest rate of the loan.Before you sign any documents, you should know the followinginformation:l The exact price you’re paying for the vehiclel The amount you’re financingl The finance chargel The APRl The number and amount of paymentsl The total sales price (the sum of the monthly payments plus thedown payment)Dealers sometimes offer very low financing rates for specific modelsbut may not be willing to negotiate. They also may require a large downpayment. As a result, it is sometimes better to pay higher financingcharges on a car with a lower price or to purchase a car that requires asmaller down payment.Many people get deeply into debt buying things on credit that theyreally can’t afford. Making monthly payments may seem easy at first,338 Unit 3: Understanding Consumer Law