Chapter 8 consumer strategies and Legal protection

The APR is the best indicator of the true _____ of credit.

Blank 1: cost, price, or value

Lemon laws protect car owners after four attempts to get the same problem corrected or when the vehicle is out of service for more than _____ days within 12 months of purchase or the first 12,000 miles.

Blank 1: 30 or thirty

A used-car dealer must place a ______ guide sticker in the window of cars for sale.

Blank 1: buyer, buyer's, or buyers

The common sources of information regarding products during the preshopping phase include personal _____ , media, and independent testing agencies such as Consumer Reports.

Blank 1: contacts, preference, research, recommendation, or networks

Product label on appliances includes information on operating _____ , to assist you in selecting the most energy-efficient models.

Blank 1: costs, expense, expenses, or cost

Well-maintained and certain high-quality vehicles _____ at slower rates.

Blank 1: depreciate

When selecting a lawyer, the questions to ask focus on the lawyer's _____ with similar cases, how charges will be set, and when _____ is due. (Enter only one word per blank.)

Blank 1: experience, history, success, performance, past, record, or background Blank 2: payment, money, bill, fees, or fee

You should not indicate borrowing plans until the price is set on a new car because you should separate the _____ of the car from the negotiations over price.

Blank 1: financing, payment, finance, payments, borrowing, or borrowings

When contracting to have repairs made to a car, it is wise to follow a process similar to when making the original purchase. Such a process of investigation, evaluation, and _____ can help minimize the ownership costs of a car.

Blank 1: negotiation or negotiating

The information on the label of some food products includes _____ dating that helps the consumer determine freshness. This is a one-word answer.

Blank 1: open or expiration

With an Internet _____ scheme, investors are promised that they will receive over $100,000 for an initial investment of approximately $100 as long as the investor sells "certificates" to at least three other people.

Blank 1: pyramid

One strategy that will help you avoid deceptive business practices is to always do business with reputable companies that have a track _____ of satisfying customers.

Blank 1: record

Lemon laws require a _____ for the vehicle after the owner has made repeated unsuccessful attempts to get the car fixed by the dealer.

Blank 1: refund

A common scam to _____ credit works by charging you a fee to clean up your credit report and improve your credit rating. However, nothing is actually done to improve your credit rating.

Blank 1: repair, fix, or improve

A full warranty states that a defective product can be fixed or _____ during a reasonable amount of time.

Blank 1: replaced, returned, or repaired

Most consumer complaints are resolved at the original _____ location.

Blank 1: sales, purchase, buying, store, dealers, purchases, or sale

The range of negotiation is determined with a new car by knowing the _____ price and the _____ cost.

Blank 1: sticker, list, or listed Blank 2: invoice, dealer's, dealers, actual, seller's, or sellers

True or false: For tax-deductible automobile travel, the IRS does not require detailed records consisting of dates, mileage, locations, and purposes of trips.

False

True or false: One of the factors that influences the price of buying a used car is capitalized cost.

False

True or false: Social factors that affect your buying habits include peer pressure, culture, and inflation.

False

True or false: The monthly payment is the best indicator of the true cost of a car loan.

False

Which of the following is not a drawback of leasing an automobile?

small cash outflow

Place the steps for wise online buying in the proper order.

1. Conduct online research 2. Compare stores 3. Make purchases 4. Plan for future purchases

In which of the following situations is unit pricing most helpful?

10 pounds of dog food vs. 20 pounds of dog food

Oil changes should be done every:

3,000-5,000 miles.

When selecting a lawyer, questions about legal costs should focus on the way charges will be calculated, such as _____ fee, _____ rate, or contingency basis.

Blank 1: flat Blank 2: hourly, hour, day, or daily

A(n) _____ warranty of merchantability covers a product's intended use or other basic understandings that are not in writing

Blank 1: implied or implicit

The condition of upside-down or negative equity can result with automobile financing when a long payment period is chosen. When this happens, the market _____of the car is less than the outstanding loan _____

Blank 1: value or price Blank 2: balance, amount, payoff, payment, value, or owed

What is a credit repair scam?

Companies offer to clean up the credit reports of consumers, but nothing is done.

The typical _____ -related fraud works by soliciting charitable donations for phony efforts.

Disaster

True or false: A lease trap will usually not happen if you ignore the total cost of the lease agreement and focus only on the monthly payment.

False

True or false: At the end of a car lease, if the market value of the car is less than the residual value, you may be able to sell the car for a profit.

False

Which of the following are given in the textbook as good sources for fair pricing on used cars?

Kelley Blue Book Edmund's Used Car Prices

Which of the following automobile costs are variable costs?

Oil parking costs and tolls gas repairs

Which of the following is a negative equity situation with a car loan?

The loan amount owed is more than the value of the car. Upon selling your car you still owe the bank money on the car loan (over and above your selling price).

At the end of the lease, if the residual value of the vehicle is greater than its market value, then you should return the car to the leasing company.

True

True or false: A lease trap can happen when you negotiate the monthly payment on a lease and ignore the capitalized cost of the vehicle.

True

True or false: A person could choose not to participate in a class-action suit and instead file an individual lawsuit.

True

True or false: Lease payments are often less than loan payments.

True

True or false: Lowballing and highballing sales techniques should be avoided when purchasing a vehicle.

True

True or false: Most businesses are concerned for their reputation and therefore correct legitimate complaints.

True

True or false: Other than price, the product attributes to be considered when evaluating brand alternatives are performance, design, and warranty.

True

True or false: Regular care of your vehicle, such as oil changes, tire rotation, inspection of hoses, and brake checks will extend the life of your vehicle.

True

True or false: The drawbacks of leasing an automobile include no ownership interest in the vehicle and costs for extra mileage, for certain repairs, and for turning the car in early.

True

True or false: The driving costs of an automobile are influenced by the number of miles you drive and the size of the car.

True

True or false: The main variables of a car warranty include time, mileage, and parts they cover.

True

Which of the following is not true concerning small claims court?

You can generally sue for as much as $25,000 in small claims court, depending on state limits.

A network of community-supported law offices that provide legal assistance to people who cannot afford their own attorney is called _____.

a legal aid society

If a 10 pound bag of dog food sells for $6.99, what is the per unit cost of the dog food?

about $0.70 cents per pound

Community agencies often provide legal aid to people who can't afford an attorney:

at a minimal cost or without charge.

Which of the following are sources of automobile loans?

banks consumer finance companies credit unions

Which of the following items are timing strategies for purchases that could save you money?

buying winter clothes in late winter buying summer clothes in late summer buying holiday decorations in late December and early January

Which items below affect the cost of an automobile lease?

capitalized cost the monthly payments and the number of months residual value—the projected value at the end of the lease money factor—the interest rate paid on the capitalized cost

Which of the following are examples of groups of people that might qualify for a class-action suit?

customers overcharged for a service auto owners charged for unneeded replacement parts for their vehicles people injured by a defective product

Which of the following are personal factors that could affect your daily buying habits?

education age gender occupation

Which of the following are usually covered by a new-car warranty?

engine, transmission, and drive train basic parts covered against defects corrosion coverage for holes due to rust

The factors that influence the price of a used car include ______.

features and options condition demand for the model number of miles

Depreciation is the largest ______ cost of a new vehicle.

fixed

When asked how much you can afford each month for a car, be sure to ask:

how many months.

One of the best sources of information about the product you are considering buying is:

independent testing organizations.

Which of the following are important considerations when choosing a store at which to shop?

location and prices product selection and services

Certified, preowned vehicles are:

nearly new cars that come with the original manufacturer's guarantee of quality.

Many lenders will ______ you for a certain loan amount.

preapprove

Comparison shopping can be beneficial when:

product quality or prices vary greatly.

Which of the following items is not a variable in the cost of a lease?

sticker price

When consumers take the price of an item and divide by the common units, such as ounces, the result is called:

unit pricing.

The typical foreign scam works via mail or e-mail and requests your _____ account number.

Blank 1: bank, checking, or personal

Be cautious about offerings that seem too _____ to be _____ because they often are.

Blank 1: good Blank 2: true

Even if you win in small claims court, you will still need to:

collect the funds.

Brand name products are usually ______ expensive than nonbrand items, but offer ______ quality.

more; higher

The advantage of certified, preowned vehicles is that:

there is a rigorous inspection and the original manufacturer's guarantee of quality.

A possible _____ of leasing an automobile is the smaller upfront cash outlay (i.e., security deposit).

Blank 1: advantage, benefit, positive, aspect, upside, or plus

In _____ , a third party tries to settle a grievance and the process is binding.

Blank 1: arbitration

Dealing with the person who has the _____ to give you a lower price is a vital factor of negotiations.

Blank 1: authority, power, ability, control, or jurisdiction

In _____ , a third party tries to settle a grievance, but the process is nonbinding.

Blank 1: mediation

Gender, age, and occupation are all _____ factors that affect your buying decisions.

Blank 1: personal

Products such as real estate or automobiles may be purchased using _____ negotiation.

Blank 1: price or cost

Banks, credit _____, and consumer finance companies are all businesses that are sources of car loans.

Blank 1: unions

In which step of the wise online buying activities would the consumer compare brands and features?

Conduct online research.

True or false: When a used car is sold "as is," the seller assumes responsibility for any necessary repairs in the first 30 days.

False

Which of the following are questions you should ask yourself when you are considering a major purchase?

How should I pay for it? Can I delay the purchase? Which brands should I consider?

True or false: The unit price of the chocolates in a box is found by dividing the price of the box by the number of chocolates in the box.

True

True or false: To properly document automobile travel expenses for the purposes of tax deductions, it is wise to maintain a notebook to record such operating expenses as gasoline, oil, parking, and tolls.

True

True or false: Two important sources of used car prices are Edmund's Used Car Prices and the Kelley Blue Book.

True

True or false: Well-maintained and certain high-quality vehicles depreciate at slower rates than vehicles not receiving the same level of care or not consisting of the same high quality.

True

True or false: When attempting to trade in a current car for a new car, it is best not to mention a trade-in vehicle until the cost of the new car has been settled.

True

Which of the following would be considered wise buying techniques?

comparing brands to determine which is best for your purpose reading and evaluating label information using coupons to try new products

The loss of a vehicle's value due to time and use and the largest fixed cost of a new car is called _____.

depreciation

Brand names are usually:

more expensive, and sometimes the private-label products are manufactured by the same companies that produce the brand-name products.

When you need repairs not covered by warranty, you should investigate, evaluate, and ______ a variety of servicing options.

negotiate

The difference between the sticker price and the dealer's cost is usually the range available for _____.

negotiation

An individual would benefit from comparison shopping when wanting to purchase which of the following types of products and/or in which of the following situations?

products where quality differs greatly among sellers products that are sold by many different sellers at various prices expensive or complex products

Which of the following automobile costs are fixed costs?

registration fees interest on car loans insurance depreciation

If the dealer is not willing to pay enough for your used car as a trade-in, you should:

sell the old car to an outside party.

A limited warranty covers only certain aspects of the product and requires the buyer to pay part of the costs for:

shipping or repairs.

The two factors that influence driving costs are the:

size of the car and the number of miles you drive.

You are considering a car with no down payment and monthly payments of $350 for 48 months and an estimated value at the end of the loan term of $4,000. A comparable model can be leased for $325 a month for 36 months with end-of-lease costs of $1,400. Which arrangement should you choose?

the loan and purchase because its cost is lower.

An implied warranty of ______ indicates that the seller has a right to sell the product.

title

A variety of scams surface after ____ and _______.

tragedies; natural disasters