AO - Auto Ownership Overview

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Auto Ownership

Introduction

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Cars have really come a long way since they were first built! There have been numerous improvements and added options. We even now have electric cars and self-driving cars (not for purchase yet)! With these added features, comes a huge increase in price as well. A car will most likely be one of the largest purchases you ever make. You’ll want to make sure you are well prepared. This module will help prepare you.

Lesson Preview

In this module, we will study the following topics:

Buying a Car:  Learn about the differences of buying a new car vs. a used car.

      • What options can you choose?
      • What fees might there be?

Auto Insurance: Take a look at the aspects that are involved when choosing and buying auto insurance for your vehicle. 

Auto Costs:  Explore fuel efficiency and depreciation.  How can you save money while driving your car and how much is your car worth?

Driving Safety:  Discover the math included in reaction time and stopping distance.  How can math be used to investigate an accident?

Key Terms

The following key terms will help you understand the content in this module.

  • Annual Premium - The amount you pay each year for insurance coverage; the annual premium depends on the base premium and your driver-rating factor; the annual premium can be paid annually, semiannually, quarterly, or monthly.
  • Appreciation – The increase of an asset's value.
  • Base Premium - Premium dependent upon the amount of coverage you want, the age group of your car, and the insurance-rating group.
  • Base Price - The price of the engine, chassis, and any other piece of standard equipment.
  • Bodily Injury Limits of 25/50 - The insurance company will pay up to $25,000 to any one person is injured and up to $50,000 if more than one person in injured.
  • Braking Distance – The distance a vehicle will travel from the point where its brakes are fully applied to when it comes to a complete stop.
  • Collision Insurance - Pays to repair the damage to your automobile if it is involved in an accident.
  • Comprehensive Insurance - Protects you from losses due to fire, vandalism, theft, and so on.
  • Dealer's Cost - Percentage of the sticker price.
  • Deductible Clause - For example, a $250 deductible clause means that you pay for the first $250 of a repair bill; the higher the deductible amount results in lower insurance premiums.
  • Depreciation – The decrease of an asset's value.
  • Destination Charge - The cost of shipping the car from the factory to the dealer.
  • Driver-Rating Factor - Dependent upon your age, marital status, and the amount you drive each week, and so on; if several people drive your car, then the person with the highest driver-rating factor is used to determine the annual premium.
  • Exponential Depreciation – When a quantity decreases at a rate proportional to its value.
  • Fixed Costs - For example, insurance, registration fees, and depreciation, remain about the same regardless of how many miles you drive.
  • Insurance Rating Group - A group dependent upon the size and value of your car; a person's driving record can also affect the insurance rating group that they are in.
  • Liability Insurance - Includes bodily injury insurance and property damage insurance, protects the automobile owner against financial losses if your car is involved in an accident.
  • Options - The extras or add-ons you may choose to purchase for convenience, safety, or appearance.
  • Property Damage Insurance - Protects you against financial loss if your automobile damages the property of others.
  • Skid Mark – The mark a tire makes when a vehicle's wheel stops rolling and slides or spins on the surface of the road.
  • Sticker Price - The sum of the base price, options, and the destination charge.
  • Straight Line Depreciation – When a quantity increases at a rate proportional to its value.
  • Variable Costs - For example, gasoline and tires, increase as the number of miles you drive increases.
  • Yaw Mark – The mark a tire makes when a vehicle wheel slides sideways on the surface of a road.  Links to an external site.

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