Consumer Skills

Making a good purchasing decision requires __________.

Comparing the prices of similar items, Reading review of the product, and Waiting until the product is on sale, if possible

Car Buying Sources

Consumer Sites (Check several sites to get current information that is trustworthy and unbiased), Salesperson (do research before talking because they are biased), Friends/Family (If they have same priorities and preferences as you they are good sources but unless they are experts, they may not give accurate, unbiased info)

Which payment option can offer additional security like fraud protection?

Credit Card

Upfront Costs

Down Payment (Putting down less when first buying a home may enable to buy sooner, but will have higher mortgage leading to higher interest over time), Closing Costs (Include realtor fees, costs to transfer ownership, usually 2-5% of the purchase price), Inspections (highly recommended to make sure house is safe and in good condition, cost $200-$600)

When comparison shopping, all of these hint at a good deal EXCEPT_____________________.

Lower-priced models offer more features.

Debit Card Payment

Accepted in many places, including online. Money will be debited from your bank account after you pay, and you may not have fraud protection if the seller does not deliver what they promised.

What are possible red flags or signs of a scam when buying a car?

Being told your financing fell through and charging of excessive fees

Which payment option takes money out of your back immediately?

Debit Card

How is a post from a social media influencer different than a comment from a regular consumer?

The influencer is paid to post the product.

Lease a House - Downsides

Landlord may terminate contract, rent may be raised periodically, damages come out of deposit, no ownership, so you cannot sell

Lease a Car - Benefits

Lower monthly and down payments, lower repair costs due to factory warranty, and better car for less money.

Buying a House - Benefits

Moving or selling is up to you, Customizations can be made, renting home helps earn income, potential profit when selling home

Lease a Car - Downsides

No ownership at the end of the lease period, limit on how many miles allowed to drive, and accident damage may not be covered.

Electronic Payment

Not accepted everywhere but is generally secure method accepted online. Link bank account or credit card, but must always monitor statements to avoid errors and fraud, and to stay within budget.

The 20/4/10 Rule

Plan to put at least 20% money on the down payment, use at max a 4 year loan term to limit amount of interest that must be paid, and paying monthly payments for the car should not exceed more than 10% of monthly gross income.

Which of the following is NOT a useful strategy when making an informed purchase?

Purchasing a product based on a social media influencer.

Buying a House - Downsides

Selling a homes can take time, responsible for repairs and maintenance, potential to lose money when selling home

How is an advertisement different from a comment from a regular consumer?

The advertisement is likely one-sided.

Credit Card Payment

They are more secure and may include fraud protection if the seller tries to scam. Using credit means you are borrowing money that you must pay back later. Best to pay them back as soon as possible to not have to pay interest on top of it.

What is the best reason for why someone would want to lease a house instead of buy one?

They are planning on living their for a short period of time.

Cash Payment

Usually accepted everywhere, except online. Great method to use to avoid overspending.

Leasing a car may be a better option than buying a car if...

You don't plan on having it for long and don't want to worry about regular maintenance.

When deciding what to buy, one should...

Compare the unit price of items similar to the one that is wanted.

Which payment option could have interest charged to you? a. Credit Card b. Check c. Cash d. Debit Card

Credit Card

Lease a House - Benefits

Flexible, easier to move, shorter terms such as monthly or yearly, little responsibility for maintenance, no worries about property losing value

eCheck Payment

Can use checks in many places, even online, but you are sharing sensitive account information with strangers. This can put you at risk of identity theft because the money is taken directly from your accounts.

Buying a Car - Downsides

Down payment or monthly payments, warranty will expire and repair will cost money, and the value of the car goes down over time.

Why is figuring out the unit price of something useful when shopping?

It helps determine the best deal.

Mortgage Pre-Approval

Includes Down Payment (inverse relationship with a loan), Loan Term (often 15-30 years, longer terms = lower payments, but more interest over time), Loan Interest (fee lender charges to use their money, part of the monthly payment goes towards paying the interest, better credit score = lower interest rate)

Four factors to decide whether to buy a new or used car

Clear History (new cars have no accident history), Well Maintained (New cars have almost no miles meaning less maintenance in the short-term), Affordable Price (used cars offer same features as new cars for a more affordable price), and Good Resale Value (new cars lose it's value after driven off the lot, used cars hold its value better)

Tips for Buying a Car

Other costs (ensure total cost does not exceed budget including maintenance, gas, insurance, etc costs), Pre-Financing (shop around for best offer, some dealerships charge higher interest than financial institutions), Negotiation (negotiate terms with local dealer the go online and email others to give you the best deal), Add-Ons (review suggested add-ons like extended warranties, upgrades, and maintenance plans, and look for limitation that make them not worth buying), Red Flags (Be wary of dealerships that tell you your financing fell through or that charge you excessive fees)

Buying a Car - Benefits

Ownership, no limit on how many miles can drive, and customization options are available

A pack of 24 pencils is more expensive than 12 pencils, but why could buying the 24 pack be the better deal?

The price of each pencil, or the unit price, is actually cheaper in the 24 pack.