UCC Consumer protection laws credit and financing laws

UCC Consumer protection laws credit and financing laws impact the purchase of a car.

Financing a vehicle Interest Rate of Loan (%) Finance charge: The amount of money it costs to borrow. Cost of loan. ($) APR Annual Percentage Rate: The percentage applied to calculate finance charge. (Calculated %)

vs. Dealer financing Incentives: no-money down, lower interest rates, etc Personal financing Banks or people you know. When you finance a car the person or bank that gives you the loan will also own the car. This is known as collateral. If you don’t pay they can take the car. Repossess. If you get a bank loan the bank’s name will also appear on the title to the car

Buy A New Car Research car on websites you have already visited. Kelley’s Blue Book and Edmund’s. As an informed buyer you can negotiate 10 -20% off the MSRP (Monroney sticker) Manufacturers Suggested Retail Price n Invoice: dealer’s price plus delivery n Base cost: includes standard equip and warranty n MSRP Monroney sticker: required by law – It lists the MSRP price, fuel economy and the transportation charge n Dealer Sticker – includes options, dealer markup, prep and undercoating.

Leasing a New Vehicle n n n Most expensive way to own a vehicle but an alternative when you don’t have a down payment Monthly payments are calculated on the value the car depreciates over the lease term. Lease may include: mileage requirement Purchase option n n Term – number of months End of lease fees Turn car in at end of lease term Consumer Leasing Act protects consumer by requiring disclosure of leasing property.

Buy a Pre-owned Car n From a dealer – warranty of merchantability and fitness for a particular purpose. Always included with express warranty cannot be excluded Where no express warranty exists it is sometimes excluded but must be in writing. “AS IS” FTC Used Car Rule – Buyer’s Guide must be on vehicle

From a private party n n more risk. Must do more research on car. Title may not be clear. Ask to see certificate of title. Get VIN on car and get report of previous ownership and history of car Car. Fax

UCC controls sale of goods. Greater than $500 dictates the contract should be in writing. n n Between private parties this amounts to written documentation between the two parties. Between private party and dealer, dealer often has an advantage by having the buyer sign an adhesion contract. Read everything!!!

Defects and remedies If you buy a defective car notify seller immediately. The seller may be liable on the grounds of n n Breach of express warranty Breach of warranty of merchantability Fraud Breach of state consumer protection law You may: n n Revoke acceptance if defect is serious and undetectable or misled to believe the dealer would fix a defect but does not. Notify seller of defect by certified mail with return receipt

Lemon Laws differ from state to state. Refund for full purchase price or replace with new car if car has within 18, 000 miles been repaired four or more times for the same defect or has been out of service for more than 30 days.

Motor Vehicle Information and Cost Savings Act federal law that sets standards for n Bumpers n Fuel economy n Labeling on new cars

Odometer law Federal law requiring the mileage to be disclosed whether the vehicle is sold or given away. If unknown it must be stated as “unknown” If defrauded you can recover up to 3 times the damages or $1500.

Financial responsibility law Requires car owners to prove they can pay for damages or injury caused by an accident. CAR INSURANCE!

Bodily Injury Coverage payments to others if insured (YOU) is negligent and causes injury to other people n 100/300 $100, 000/per person $300, 000 per occurrence n Medical payments – family members occupying the same car. Pays for medical bills. n Uninsured/Underinsured – pays for the insured (YOU) when injured by someone with little or no coverage.

Property Damage Coverage Liability – covers loss if you damage something Collision – covers loss to your car regardless of fault. Comprehensive – covers damage to your vehicle from things other than collision n Deductible – you agree to pay a certain amt of the damages. $250, $500, $1000.

No Fault Regardless of fault drivers collect from their own insurance