Aim:  Students will be able to define and explain how Regulation Z effects automobile purchases.  Explain the implied warranties for
automobiles and identify express warranties.

Do Now:  Where is the best place to buy a car ? From whom and why?

Homework:  RQ 1-4 pg 258

Define a Dealer
A merchant who has the right to void implied warranties.

Define Regulation Z - The  Truth in Lending Act
Requires lenders of automobile money to disclose two factors to the borrower:
1)  The Annual Percentage Rate (APR)
2)  The total cost of the loan (total finance charges)
**Reg Z is an Administrative source of law.**

What are the required disclosures for the advertisement of auto financing ?
Cash price, down payment required, number of payments, amount of payments, APR and deferred payment price (total cost).

Can I sue the finance company if something goes wrong the car ?
YES - You generally have the same defenses/ remedies available against either the dealer or the finance company

What are the Implied Warranties for an auto ?
Implied Warranty of Merchantability - states that all cars are fit for the ordinary purposes for which cars are used.

Can Express Warranties be made ?
Yes - they are made  by dealers in the form of "time or mileage guarantees" which may be for parts, labor or both.

Summary - Its is generally not a good idea to allow a dealer to disclaim any implied warranties.
The law generally provides for more consumer protection when buying from a dealer.

Aim:  The students will be able to explain the Used Car Rule and the Lemmon Law.  Explain the general rules for buying a
used car.

Do Now:  List the two ways to possess a car.  How can implied warranties be excluded ?

Homework:  RQ 4-6 pg 258

1)  List the contracts involved in buying a car.
Contract with the dealer or seller, bank (if any) and an insurance company

2) Can you sue the financing company if the implied warranty of merchantability is violated ?
Yes provided that the finance company (a bank) has a "financing arrangement"  with the dealer.  You must get the answer to this
question before you sign anything !

3) Why do people always say it is best to buy a car from a dealer?
Administrative sources of law more consumers protection & implied warranties.

Define the Used Car Rule of '85
A/K/A the Sticker Price or Buyer's Guide rule.  The following must be stated on a sticker in every used car for sale at a dealership:
1)  Warranty information, or the lack of a warranty (as is)
2)  Advisement that the consumer get the car inspected by a mechanic before buying.
3)  Advisement that you get all promises in writing
4)  Potential problems that may occur with the car
NOTE -   Changes to a contract must be reflected on the Buyer's Guide if  you expect to enforce the contract.  Changes to the
Buyer's Guide override changes to the contract.

What are the guidelines for protecting yourself when buying a car from a nonmerchant ?
- There is no implied warranty of merchantability !
- You buy the car "as is" unless you get an express written warranty.  However, case law precedent states that oral
statements made by the seller such as "good condition" are evidence of an express warranty... get a mechanic & TITTJ (Tell it to the
judge !!).
-  Check the title.  Inquire about how the seller bought the car and any unpaid liens.  Lien holders, who have the right to repossess
the car are usually list on the back of the title document.

Define the Lemmon Law (NY)
Private Parties must disclose known defects.  A "lemmon" is any car that has been at a dealer 3 times, for repair of the same defect.
The car can not be older than 1 year, and exceed 15,000 miles.

Aim:  Explain the Federal Odometer Law and The Motor Vehicle Information and Cost Act.

Do Now:  Explain the used Car Rule

Homework:  LOL  PG 257-258

Explain the Federal Odometer Law.
It is illegal to turn back the odometer of an auto with the intent to change the mileage reading.  Everyone who transfers an auto must
provide a disclosure statement that indicates the actual mileage traveled in the vehicle.  If the odometer was once repaired by a
repairperson, a sticker must be placed inside the door of the car disclosing the repair.

What are the remedies and  damages available for violation of the Odometer Law ?
The plaintiff must prove that the odometer was changed with the intent to defraud.  Violations are criminal offenses in some states!!

What does it mean if a mechanic says they are "bonded"?
If the mechanic defrauds you, you can sue the finance company (the bond issuer) for damages.

Define the Motor Vehicle Information and Cost Act
Created by the National Highway Traffic Safety Administration to impose safety standards on manufacturers.  The Act also required
the establishment of an average fuel economy standard.  Auto makers must meet tougher MPG averages every year.

Aim:  Describe the 6 types of insurance coverage's for automobiles.  Describe the two types of insurance which are legally required
in most states.

Do Now:  What is the Odometer Law ?  What is the advantage of dealing with a "bonded" mechanic ?

Homework:  RQ's 1-7 Pg 258 are a take-home quiz.

What is Bodily Injury Liability Insurance ?
Protects the policyholder from lawsuits, if they negligently cause the bodily injury or death of another with an auto.

What is Property Damage Liability Insurance ?
Protects the policyholder from lawsuits, if they negligently cause damage to the property of another with an auto.

The law requires both bodily injury and property damage insurance in most states.  The
primary purpose of requiring these two types of insurance is to protect YOU from YOUR
OWN negligence !!

Describe Collision Insurance
Insurance that pays for damage to the insured's own car when it collides with another object.   Fault does not matter.

Define Medical Payments Insurance
Protects all of the occupants of the insured car, plus anyone struck by the insured car.  Pays for all medical expenses.

Define Uninsured Motorist Insurance
Covers the insured if they suffer bodily injury as a result of an uninsured negligent party.   The insurance also covers the insured for
bodily injury suffered in a hit-and-run incident.

What is No Fault Insurance
People who are injured should be compensated quickly and fully regardless of fault.  The injured party is compensated by their own
insurance company, regardless of fault.