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OSS 1060 > Chapter 8 > Flashcards

Chapter 8 Flashcards

1
Q

Buying without fully considering priorities and alternatives is called…

A

Impulse buying

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2
Q

A consumer can save money by…

A

Paying cash for purchases, buying generic products, and stocking up on advertised specials.

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3
Q

Shopping at a convenience store generally costs more money because…

A

prices are higher on many items.

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4
Q

What should be completed before interacting with sellers?

A

Distinguishing between needs and wants, preshopping research, and fitting the budget.

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5
Q

The most comprehensive information about automobiles appears in which issue of Consumer Reports?

A

April

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6
Q

What is the true cost of an automobile to the dealer?

A

IT IS NOT the sticker price, MSRP, or the dealer holdback.

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7
Q

What does it mean in auto leasing and auto financing when you are said to be upside down?

A

You owe more on the car than it is worth.

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8
Q

What is a refund of part of the purchase price?

A

A rebate

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9
Q

Shad Yarbrough wants to consider the cost per use of the personal computer he is considering. The personal computer costs $1,750 and has a life expectancy of four years. If Shad feels he would use the computer three days a week, on average, what is Shad’s cost per use?

A

$2.80

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10
Q

Mary kay has decided she would like to negotiate on a new car with a sticker price of $22,000. The typical dealer cost on this vehicle is approximately…

A

$19,360

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11
Q

Brian Foge has decided he would like to negotiate on a car with a $32,000 sticker price. If the the dealer’s cost on this car is 15 percent lower than the sticker price, Brian should be able to negotiate a price somewhat higher than…

A

$27,200

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12
Q

The dealer cost of new cars averages about what percent lower than the sticker price?

A

12%

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13
Q

What is the process of comparing products or services to find what you think is the best buy?

A

Comparison Shopping

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14
Q

The product that is the best buy will be the one with the…

A

acceptable quality at a fair price.

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15
Q

An automobile buyer can call the National Highway Traffic Safety Administration auto hotline to get information on what?

A

Government safety test results, recalls, and theft ratings.

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16
Q

What is the first consideration in any negotiation?

A

Price

17
Q

Which “rule” says to compare at least three alternatives before making a major purchase decision?

A

The Rule of Three

18
Q

In what lease must you pay any difference between the projected residual value of the vehicle and its actual market value at the end of the lease period?

A

An open-ended lease.

19
Q

The Consumer Leasing Act limits end-of-lease payments to a maximum dollar amount equivalent to what?

A

Three times the monthly payment.

20
Q

With a closed-end lease, there is…

A

no charge if the end-of-lease value of the vehicle is lower than the originally projected residual value and the possibility of some end-of-lease charges on excess wear and mileage.

21
Q

Other things being equal, one would want to finance this car rather than take this lease if the finance cost were less than…

A

the residual value and disposition charge combined.

22
Q

Which is NOT an additional charge when leasing an automobile?

A

the residual value

23
Q

With a balloon auto loan the last payment is equal to what?

A

The projected residual value of the vehicle at the end of the loan period.

24
Q

Jessie Ridley just bought an SUV and financed it with an automobile loan. She will pay 48 monthly payments of $425 each and one final payment of $3,000. What type of clause is in her sales contract?

A

Balloon

25
Q

A service contract offers free or low-cost repairs to the product for how long?

A

For a specified period of time.

26
Q

What percent of service contracts are never used?

A

80%

27
Q

A service contract is very much like what?

A

Insurance

28
Q

Service contracts are also called what?

A

Extended Warranties

29
Q

When negotiating to purchase a vehicle, besides the price, what other variables should be considered?

A

the trade-in value, prices of options, and service contract costs.

30
Q

The key to success in negotiating a car purchase is to obtain the what before discussing any other aspects of the deal?

A

Price of the car.

31
Q

What should you never discuss with an auto dealer?

A

Your affordable monthly payments.

32
Q

Where should a person NOT make decisions for expensive purchases?

A

inside the retail store or in a showroom.

33
Q

Where can you buy a car which allows you to learn more information about its history?

A

A private individual

34
Q

Where can you buy a car where there tends to be more reliability and more expensive used cars?

A

A new car dealership

OSS 1060 (3 decks)

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