CARS AND LOANS

This writing's focus is about car. A car is a wheeled, self-powered motor vehicle used for transportation and a product of the automotive industry (cr. Wikipedia). Nowdays, people prefer cars for they daily activities more than other such as motorcycle or bicyle. Car can protect you from rain and heat. Another advantage for having a car is its can accomodate more than two peoples.

Before you decide to buy a car, there are some questions which you should know the answer to deciding on the right purchase. The questions, such as what level of quality do I want? What level of quality do I need? What types of services and repairs does the dealer offer? Should I wait until there is a sale on the type of car I want? Should I buy a new or a used car? etc. But there are some differences between a customer who want to buy a new car and an used car. For a new car, the steps for shopping are decide which car model and specific options you want, find out the invoice price and the true cost to the dealer of the model and options you want, decide how much you are willing to pay the dealer above the invoice price, make your offer to as many dealers as possible, compare  final sales prices with other dealers and buying services, compare financing costs from various sources. When you shopping for an used car, you should find out the reputation of the dealer, find out what type of warranty comes with the car, and lastyly find out what type of service contract comes with the car. 

About the cost when you have a car, its divided into two types. There are ownership fixed cost and operating variable cost. Ownership fixed cost means the cost that the owner of the car have to pay it such as depreciation, interest on loan, insurance, registration fee, license, taxes. Operating variable cost, such as gasoline, oil and other fluids, tires, maintenance and repairs, parking and tolls.

There are also a term named 'car loan'. That means personal loan to purchase a car. Shopping for a car loan, there are some variables cost include, such as Annual Percentage Rate (APR), length of the loan, monthly payments, total finance charge, and total to be repaid. How to calculate the total cost of a loan is amount of the loan x APR x number of years. And then to estimate the amount of monthly payments is total to be paid divided by number of months of the loan.

Last, we will discuss about the truth-in-lending act. That discuss about amount financed, what charges are included in amount financed, Annual Percentage Rate (APR), payment schedule, prepayment penalty, late payment penalty, security interest, and insurance charges. For the insurance, there are six types of that, there are liability (40–50% of premium), collision (up to 30% of premium), comprehensive (about 12% of premium), medical, uninsured motorist, towing and labor, and rental reimbursement.  If you ask how insurance rates are set, the answer is personal characteristics, geographic location, driving record, and vehicle characteristics. As an conclusion, when you decide to buy a car whether its new or used, cash or credit, you should make sure that you choose the right car and can pay the payment.