Finance chapter 6
The small claims court process usually takes place without which of the following?
A lawyer
Which of the following is NOT true?
A limited warranty states that a defective product can be fixed or replaced within a certain time.
Which of the following are associated with a vehicle lease?
All of these choices are correct
If a 10 pound bag of dog food sells for $6.99, what is the per unit cost of the dog food?
Almost $0.70 per pound
Which of the following are techniques that you should avoid when purchasing a vehicle?
Asking how much can you afford per month Low balling Highballing Leaving a deposit to hold the vehicle
If you cannot resolve a complaint at the local level, then you should next express your concern to customer service where?
At the corporate level
Which of the following is a guideline for avoiding being taken by deceptive business practices?
Be cautious of offerings that seem too good to be true
A legal _________society is one of a network of publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney.
Blank 1: aid
In _______, a third party tries to settle a grievance through a legally-binding process.
Blank 1: arbitration
Until the new-car price is set, you should not indicate that you intend to use the dealer's _____plan
Blank 1: credit
The loss of a vehicle's value due to time and use and the largest fixed expense of a new car is called _________.
Blank 1: depreciation
You should not indicate borrowing plans until the price is set on a new car because you should separate the way you will _______ for the car from the negotiations over the price or value of the car.
Blank 1: finance, pay, or borrow
You should not indicate borrowing plans until the price is set on a new car because you should separate the way you will _________for the car from the negotiations over the price or value of the car.
Blank 1: finance, pay, or borrow
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 _________ (full/limited) warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
Blank 1: full
A(n) ______ warranty covers a product's intended use or other basic understandings that are not in writing.
Blank 1: implied
While a used car may not have an express warranty, most states have ________warranties to protect used-car buyers.
Blank 1: implied
Owners of new cars are protected by the________ laws when repeated attempts have been made to have the car fixed without success.
Blank 1: lemon
The _________law protects car owners after four attempts to get the same problem corrected or when the vehicle is out of service for more than 30 days within _________months of purchase or within the first 12,000 miles. This answer applies to most states.
Blank 1: lemon Blank 2: 12 or twelve
In __________, a third party tries to settle a grievance. However, the process is non-binding.
Blank 1: mediation
The various groups to which special new car rebates are sometimes offered include students, teachers, credit union _________, and __________, ________agents.
Blank 1: members or member Blank 2: real Blank 3: estate
Lemon laws protect car owners after four attempts to get the ________(same/different) 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: same Blank 2: 30 or thirty
Well-maintained and certain high-quality vehicles, such as BMW, depreciate at ________(higher/slower) rates.
Blank 1: slower
According to the text, special rebates are sometimes offered to _____ , teachers, credit union members, and real estate agents.
Blank 1: students
Banks, credit ________, and consumer finance companies are all sources of car loans.
Blank 1: unions or union
The condition of upside-down or negative equity can result with automobile financing when a long payment period is chosen. When this happens, the ________ of the car is less than the loan still __________ . (Enter one word per blank.)
Blank 1: value, price, or worth Blank 2: owed, unpaid , due, or outstanding
The condition of upside-down or negative equity can result with automobile financing when a long payment period is chosen. When this happens, the of the car is less than the loan still . (Enter one word per blank.)
Blank 1: value, price, or worth Blank 2: owed, unpaid , due, or outstanding
Which of the following is not something to look for when inspecting the engine of a car for possible purchase?
Check the tire tread wear
The second step in wise online buying activities as presented in the text is which of the following?
Compare stores
Which of the following are usually covered by a new car warranty?
Corrosion coverage for holes due to rust Basic parts covered against defects Engine, transmission, and drive train
Which of the following are drawbacks of leasing an automobile?
Costs incurred for extra mileage Costs incurred for certain repairs No ownership interest in the vehicle
Wise consumers typically use which two items to achieve better pricing?
Coupons and rebates
Which of the following are examples of groups of people that might qualify for a class-action suit?
Customers overcharged for a service People injured by a defective product Auto owners charged for unneeded replacement parts for their vehicles
Which of the following is NOT a sales technique to avoid when shopping for vehicles?
Deal with a person at the dealership who has authority to give you a lower price
Which of the following is NOT a guideline for avoiding being taken by deceptive business practices?
Do not hesitate to act quickly if a deal seems just too good to pass up
Which of the following would NOT be part of the inspection inside of a used car that you are interested in purchasing?
Drive the car and test the brakes at different speeds
Which of the following would be considered wise buying techniques?
Evaluating product quality Comparing brands to determine which is best for your purpose Seeking coupons and discounts
What should you look for when inspecting the ENGINE of a used car for a possible purchase?
Evidence of leakage of fluids Smooth, clean start
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
Studies of consumer problems consistently rank auto repair services as one of the best consumer experiences with few consumer complaints.
False
The unit price of a 32-ounce jar of honey that costs $8.32 is $0.13 per ounce.
False
True or false: One of the factors that influences the price of buying a used car is capitalized cost.
False
True or false: Service contracts and extended warranties are usually a wise purchase because they cover almost anything that could go wrong with the product.
False
True or false: The first step in the consumer complaint process is litigation.
False
True or false: You should begin the consumer complaint process at the corporate headquarters of the store where the problem began.
False
True or false: One of the factors that influences the price of buying a used car is capitalized cost.
False Reason: Factors include number of miles, features and options, conditions, and demand for the car. Capitalized costs refer to leasing and not buying.
Most products come with some guarantee of quality. This type of warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
Full
Which of the following automobile costs are variable costs?
Gas Parking costs and tolls Oil Repairs
Which of the following automobile costs are fixed ownership costs? Repairs Parking costs and tolls Insurance Registration fees Depreciation Gas Interest on car loans Oil
Insurance Registration fees Depreciation Interest on car loans
Adolph has a low income and cannot afford his own attorney. He needs legal assistance and should make use of a:
Legal aid society
Store-brand and private-label products are which of the following?
Low-cost alternatives to national brands
Which of the following would be included in Phase 3, Selection and Purchase, of the decision-making process for making major buying decisions?
Negotiation activities to obtain a lower price
Which of the following are drawbacks of leasing an automobile?
No ownership interest in the vehicle Costs incurred for certain repairs Costs incurred for extra mileage
Which of the following is NOT true regarding class-action suits?
People impacted by a bad product must participate in a class action and not sue on their own.
Which of the following is the first phase in a planned decision-making process?
Preshopping activities
Which of the following items is NOT a factor in the cost of a lease of an automobile?
Price of accessories
Which of the following is not a business that offers automobile maintenance and repair services?
Public Works organizations
Which is the final step in the process of resolving consumer complaints?
Take legal action
To prevent confusion in determining the true price of the new car, you should not mention which of the following until the cost of the new car has been settled?
The existence of a trade-in vehicle
Which of the following is a negative equity situation with a car loan? You sell your car, pay off the car loan, and walk away with money in your pocket. 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). You sell the car for exactly what you owe on it.
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).
A car with a total purchase price of $12,000 is available while a comparable model can be leased for $350 a month for 36 months with end-of-lease costs of $800. Which arrangement should you choose?
The outright purchase because its cost is lower.
Which of the following is an example of a limited warranty?
The parts for your air conditioner will be replaced during the warranty period if damaged, but you will pay for the labor.
Buying holiday items at reduced prices in late December is referred to as what?
Timing a purchase
As per the book, 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
Drive the car and test the brakes at different speeds
True
Most consumer complaints are resolved at the original sales location.
True
Thomas bought a toaster that malfunctioned after six months. If he returned the toaster and the manufacturer accepted the return, then this demonstrates that a full warranty was likely in place.
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
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
When attempting to determine the true price of a new car, it is best not to mention a trade-in vehicle until the cost of the new car has been settled.
True
rue 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: Social factors that affect your buying habits include peer pressure, culture, and inflation.
True Reason: Inflation is an economic factor rather than a social factor.
Which of the following is a negative equity situation with a car loan?
Upon selling your car you still owe the bank money on the car loan (over and above your selling price). The loan amount owed is more than the value of the car.
Which of the following is true regarding comparison shopping for used vehicles?
Warranties offered by used-car dealers are usually limited
Which of the following questions are considered when selecting a lawyer?
When is payment due? Is the lawyer experienced in similar types of cases? How will charges be set?
Which of the following is NOT true concerning small claims court?
You can generally sue for as much as $100,000 in small claims court.
A network of community law offices that provide legal assistance to people who cannot afford their own attorney is called:
a legal aid society.
Most consumer complaints are resolved:
at the original location
Sources of automobile servicing include:
car dealers service stations independent auto repair shops
The difference between the sticker price and the _____ is the range available for negotiation.
dealer's cost
An ________warranty, usually in writing, is created by the seller or manufacturer and has two forms: the full warranty and the limited warranty. Use one word per blank.
express
Most products come with some guarantee of quality. Which of the following is usually in writing, created by the seller or manufacturer, and has two forms?
express warranty
You should conduct regular vehicle care in order to _____ the life of your vehicle.
extend
Mike bought a new car. His new car warranty probably included all of the following except:
extended coverage for air conditioning
If you have a problem with a product and you are talking with a customer service person, you should raise your voice and demand unreasonable action during your conversation.
false
Small claims court is used to take legal action by a few individuals on behalf of all who have suffered the same alleged injustice.
false
True or false: A full warranty covers only certain aspects of the product and requires the buyer to share in the cost of repairs or shipping
false
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
Depreciation is the largest ______ cost of a new vehicle.
fixed
The appearance of a used car can be deceptive. When purchasing a used vehicle, it is a good idea to:
have a trained and trusted mechanic of your choice check out the vehicle
A(n) ______ warranty covers a product's intended use or other basic understandings that are not in writing.
implied
If you buy a five-year-old car that won't run when you try to start it the next day, it is covered under the:
implied warranty of merchantability.
While evaluating alternatives, comparison shopping will be beneficial for buying:
items that can be researched easily with advertisements
The _________law protects car owners after four attempts to get the same problem corrected or when the vehicle is out of service for more than 30 days within _______ months of purchase or within the first 12,000 miles. This answer applies to most states.
lemon 12 months
Karen bought a mixer. She received a warranty that covers only certain aspects of the product. If the product fails, she may be required to pay part of the costs for shipping or repairs. Which of the following warranties does she have?
limited warranty
Brand names are usually:
more expensive, and sometimes the private-label products are manufactured by the same companies that produce the brand-name products.
The factors that influence the price of a used car include:
number of miles features and options demand for the model condition
One of the most useful sources of information regarding products during the preshopping phase is _____ that provide buying guidance and shopping suggestions.
online reviews
According to the text, your decision to use a particular retailer is influenced by location, product selection, services available, and
price
It is important to have all the necessary information about the product and buying situation when using _______negotiation to determine the purchase price of cars or real estate. (Enter one word per blank.)
price
Lemon laws require a(n) ________for the vehicle after the owner has made repeated unsuccessful attempts to get the car fixed by the dealer.
refund
The price of a leased vehicle is known as the:
residual value
The price of a leased vehicle is known as the: Set price. Sticker price. Capitalized cost. Invoice price. Residual value.
residual value
The two factors that influence driving costs are the:
size of the car and the number of miles you drive.
The two factors that influence driving costs are the: size of the car and the number of miles you drive. model of the car and the color of the car. size of the car and the color of the car. color of the car and the number of miles you drive.
size of the car and the number of miles you drive.
If you have a problem in which the remedy will be between $1,500 and $3,000, the appropriate tool to use would be a:
small claims court
According to the text, special rebates are sometimes offered to _______, teachers, credit union members, and real estate agents.
students
The advantage of certified preowned vehicles is that:
there is a rigorous inspection and the original manufacturer's guarantee of quality.
A unit price of a box of cereal is found by dividing the price of the product by the number of ounces in the product box or container.
true
A wide variety of economic, social, and personal factors affect daily buying habits.
true
True or false: The drawbacks of leasing an automobile include no ownership in the vehicle and costs for extra mileage, for certain repairs, and for turning the car in early.
true
True or false: To get better pricing on the items they purchase, many consumers look for coupons or rebates to lower prices.
true
Two important sources of used car prices are Edmund's Used Car Prices and the Kelley Blue Book.
true
A standard measurement used to compare the prices of packages of different sizes is:
unit pricing
Using the following information, what is the cost to lease a car? (Assume there are no charges for damage at the end of the lease.) Security deposit $300 Monthly lease payment $300 per month for a five-year lease Opportunity cost of security deposit 300 × loan period (in years) × 2% interest End-of-lease charges 500 Multiple Choice
$18,530 Total lease cost = + Total monthly lease payment + Opportunity cost + end-of-lease charges = ($300 ×5 years × 12 months) + ($300 × 5 years × 2%) + ($500) = $18,530.
One possible ___________(advantage/drawback) of leasing an automobile is the smaller upfront cash outlay (i.e., security deposit).
Blank 1: advantage
Dealing with the person who has _________ the to give you a lower price is a vital factor of negotiations.
Blank 1: authority, power, or ability
The information on the label of some food products includes _________dating that helps the consumer determine freshness or shelf life of a perishable product.
Blank 1: open or expiration
Which of the following is not something to look for when checking the outside of a used car for possible purchase?
Check ease of steering and vehicle control
Which of the following is not something included in a road test for a used car?
Check oil level and for signs of leaks
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?
Expensive or complex products Products that are sold by many different sellers at various prices Products where quality differs greatly among sellers
Which of the following is an agreement between a business and a consumer to cover repair costs of a product in return for a fee?
Extended warranty or service contract
Thomas bought a vehicle from a used car dealer. He returned it to the dealer because the transmission fell out 150 miles after he purchased it. The dealer refused to accept the return because the vehicle was sold "as is." This is an example of a limited warranty.
FALSE vehicle was sold "as is," no warranty was offered.
Which of the following are important considerations when choosing a store at which to shop?
Selection and services available Location and prices
According to the textbook, when considering the purchase of a used car, a road test should consist of:
checking the ease of steering and vehicle control. listening for smoothness of acceleration and transmission. checking brakes at different speeds.
Product labels on appliances include information on operating ________to assist you in selecting the most energy-efficient models.
costs
Comparison of product features is part of the ____ phase of the research-based buying process.
evaluating alternatives
The only way that you can have long-term financial security is to not save all of your current income.
false (to not spend all income)
The range available for negotiation for a new car is the difference between the _______ price and the ________cost.
sticker dealer's
True or false: When inspecting the outside of a used car for a possible purchase, inspect the tread on the tires, check the operation of doors and windows, and look for leaking fluids under the car.
true
The two key sources of current used-car prices in the United States are Edmund's Used Car Prices and ________ Blue Book
Blank 1: Kelley
A used car dealer must display a ______ ______________ sticker telling whether the vehicle comes with a warranty.
Blank 1: buyer's Blank 2: guide
The advantage of ________preowned vehicles is that there is a rigorous inspection and the original manufacturer's guarantee of quality.
Blank 1: certified
The common sources of information regarding products during the preshopping phase include personal ______, business organizations, media, and independent testing agencies such as Consumer Reports.
Blank 1: contacts, connections, or network
Buying which of the following items would be timing strategies for purchases that could save you money?
Buying holiday decorations in late December and early January Buying winter clothes in late winter Buying summer clothes in late summer
Which items below are used in determining the cost of an automobile lease?
Capitalized cost Money factor----the interest rate paid on the capitalized cost Residual value - the projected value at the end of the lease The monthly payments and the number of months
Which of the following is something to look for on the inside of the car when inspecting it for possible purchase?
Check operation of gauges
Which items below are used in determining the cost of an automobile lease?
Residual value - the projected value at the end of the lease Money factor----the interest rate paid on the capitalized cost The monthly payments and the number of months Capitalized cost
What should you look for when inspecting the ENGINE of a used car for a possible purchase?
Smooth, clean start Evidence of leakage of fluids
When comparing the cost to buy versus the cost to lease an automobile, the ______ cost of the security deposit should be considered.
opportunity
A limited warranty covers only certain aspects of the product and requires the buyer to pay part of the costs for:
shipping or repairs.
