MODULE 3 - CHP 8-9 SMARTBOOK
True or false: The monthly payment is the best indicator of the true cost of a car loan.
FALSE The APR is the best indicator of the true cost of a car loan.
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
Monthly car lease payments are often less than monthly car financing payments. True false
True
A used-car dealer must place a _______ guide sticker in the window of cars for sale.
buyer's
Renting increases mobility by: Multiple select question. decreasing financial investment in a home. making it easier for people to get up and move. exclusively dealing in smaller spaces. decreasing the amount of time one is required to be financially liable for housing.
decreasing financial investment in a home. making it easier for people to get up and move. decreasing the amount of time one is required to be financially liable for housing.
Well-maintained and certain high-quality vehicles ________ at slower rates.
depreciate
The loss of a vehicle's value due to time and use and the largest fixed cost of a new car is called
depreciation
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? Multiple select question. expensive or complex products products where quality differs greatly among sellers simple products that are seldom purchased low-cost products products that are sold by many different sellers at various prices
expensive or complex products products where quality differs greatly among sellers products that are sold by many different sellers at various prices
An ____________ warranty of merchantability covers a product's intended use or other basic understandings that are not in writing.
implied
Like many financial decisions, when making a housing decision, you should consider what you give up in time, ________ , and money as a result of the decision.
interest
A possible advantage of ________ an automobile is the smaller upfront cash outlay.
leasing
Brand name products are usually Blank______ expensive than nonbrand items, but offer ______ quality. less; higher more; higher more; lower less; lower
more; higher
Which of the following are personal factors that could affect your daily buying habits? Multiple select question. inflation tax rates occupation product safety gender education age
occupation gender education age
Which of the following items are timing strategies for purchases that could save you money? Multiple select question. Buying winter clothes in the fall Buying summer clothes in late summer Buying summer clothes in the spring Buying holiday decorations in late December and early January Buying holiday decorations three or four weeks prior to the holiday Buying winter clothes in late winter
Buying summer clothes in late summer Buying holiday decorations in late December and early January Buying winter clothes in late winter
Which of the following automobile driving costs are categorized as fixed ownership costs? Multiple select question. Parking costs and tolls Oil Depreciation Gas Interest on car loans Registration fees Insurance Repairs
Depreciation Interest on car loans Registration fees Insurance
When selecting an apartment, which of the following aspects of the building's interior should you consider? Multiple select question. Condition of grounds Exits and security Condition of elevators Parking
Exits and security Condition of elevators
Which of the following automobile driving costs are categorized as variable operating costs? Multiple select question. Oil Gas Interest on car loans Registration fees Insurance Parking costs and tolls Repairs
Oil Gas Parking costs and tolls Repairs
The unit price of chocolates in a box is found by dividing the price of the box of chocolates by the number of chocolates in the box. Assume all the chocolates have the same price per unit. True false
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: 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: 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: 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
Most consumer complaints are resolved: at the original location. with the manufacturer. through a consumer action agency. with a lawsuit.
at the original location.
Dealing with the person who has the __________ to give you a lower price is a vital factor of negotiations.
authority
Which items below affect the cost of an automobile lease? Multiple select question. capitalized cost the monthly payments and the number of months manufacturer rebates money factor—the interest rate paid on the capitalized cost interest rates on a new car loan from both the bank and the dealer residual value—the projected value at the end of the lease
capitalized cost the monthly payments and the number of months money factor—the interest rate paid on the capitalized cost residual value—the projected value at the end of the lease
In a(n) ________ -action suit, all affected parties are notified as to whether or not they want to participate or file an individual lawsuit.
class
Even if you win in small claims court, you will still need to: hire an attorney. pay the debt. collect the funds. file a judgment.
collect the funds.
The common sources of information regarding products during the preshopping phase include personal __________ media, and independent testing agencies such as Consumer Reports.
contacts, preference, research, recommendation, networks, preferences, recommendations, or network
The opportunity costs and common trade-offs of a housing decision include which of the following? Multiple select question. cost to commute to work when you live in area that offers less expensive housing cost of food to fill the refrigerator of the new home interest lost on money used for down payment the loss of tax advantages the cost of utilities in the new home
cost to commute to work when you live in area that offers less expensive housing interest lost on money used for down payment the loss of tax advantages
The typical ______-related fraud works by soliciting charitable donations for phony efforts.
disaster
When asked how much you can afford each month for a car, be sure to ask: whether the car has heated seats. how many payments per month. how much you can get for your trade-in. how many months.
how many months.
Which of the following are disadvantages of renting a house or an apartment? Multiple select question. limitation regarding remodeling no tax benefits significant financial commitment limited mobility (difficult to move)
limitation regarding remodeling no tax benefits
When you need repairs not covered by warranty, you should investigate, evaluate, and ______ a variety of servicing options. eliminate examine negotiate reject
negotiate
Many lenders will ______ you for a certain loan amount. obligate preapprove preadvise not approve
preapprove
Products such as real estate or automobiles may be purchased using ______ negotiation
price
The advantages of owning a newly built home include Blank______. Multiple select question. minimal financial commitment pride of ownership tax benefits mobility—easy to move no previous owner, so you know the history of the home
pride of ownership tax benefits no previous owner, so you know the history of the home
Comparison shopping can be beneficial when: most sellers are offering the same price on the product. product quality or prices vary greatly. there are a lot of advertisements about the product. quality is about the same between products.
product quality or prices vary greatly.
Which of the following are important considerations when choosing a store at which to shop? Multiple select question. product selection and services location and prices the fact that you do not use credit cards
product selection and services location and prices
Which of the following would be considered wise buying techniques? Multiple select question. buying based on price rather than nutritional value reading and evaluating label information using coupons to try new products comparing brands to determine which is best for your purpose basing your buying decision on one source of information
reading and evaluating label information using coupons to try new products comparing brands to determine which is best for your purpose
Which of the following are disadvantages associated with renting an apartment? Multiple select question. restrictions on pets (no pets) and certain activities limited mobility (not easy to move) significant maintenance no tax benefits limitations on remodeling
restrictions on pets (no pets) and certain activities no tax benefits limitations on remodeling
A ______ deposit provides the landlord with funds to cover the cost of any damages done to the rental unit during the lease period.
security
A limited warranty covers only certain aspects of the product and requires the buyer to pay part of the costs for: contact and shipping. shipping or repairs. upgrades or repairs. shipping or upgrades.
shipping or upgrades.
What are some of the disadvantages of new home ownership? Multiple select question. lower maintenance than renting an apartment significant financial commitment higher living expenses than renting limited mobility when compared to renting
significant financial commitment higher living expenses than renting limited mobility when compared to renting
Lifestyle, interests, hobbies, and peer group are all _______ factors that affect your buying decisions.
social
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 lease because the cost is lower the loan and purchase because its cost is lower.
the loan and purchase because its cost is lower.
A variety of scams surface after ______ and ______. Christmas; Easter Mondays; Fridays elections; revolutions tragedies; natural disasters
tragedies; natural disasters
What are the disadvantages of owning a condominium? Multiple select question. Uncertain demand affecting property value Assessment fees Less privacy More maintenance than owning a home
Uncertain demand affecting property value Assessment fees Less privacy
Which of the following are sources of automobile loans? Multiple select question. banks housing mortgage companies credit unions consumer finance companies
banks credit unions consumer finance companies
The APR is the best indicator of the true ______ of credit.
cost
Product label on appliances includes information on operating __________, to assist you in selecting the most energy-efficient models.
costs
A possible advantage of _________ an automobile is the smaller upfront cash outlay.
leasing
One of the reasons why renting offers fewer financial benefits than home ownership is that rent is not ________ deductible, while the interest on mortgage payments is.
tax
An implied warranty of ______ indicates that the seller has a right to sell the product. merchantability express limited title
title
Banks, credit ____, and consumer finance companies are all sources of car loans.
unions
One of the factors that influences the price of buying a used car is capitalized cost. True False
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
If a 10 pound bag of dog food sells for $6.99, what is the per unit cost of the dog food? $6.99 per bag about $0.40 per ounce about $10.00 per pound about $0.70 cents per pound
about $0.70 cents per pound ($6.99 divided by 10)
The APR is the best indicator of the true __________ of credit.
cost
One of the best sources of information about the product you are considering buying is: the Consumer Financial Protection Bureau. independent testing organizations. what the neighbors own. what the sales person says.
independent testing organizations.
Schools, shopping, and recreation are some of the important Blank______ aspects of selecting an apartment. aesthetic financial unimportant location
location
Many states require that your security deposit be returned within a _______ time
reasonable
The range of negotiation is determined with a new car by knowing the ________ price and the _______ cost.
sticker dealer's
Which of the following items is not a variable in the cost of a lease? capitalized cost monthly payments and number of months residual value sticker price
sticker price
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.
30
In which step of the wise online buying activities would the consumer compare brands and features? Conduct online research. Compare stores. Plan for future purchases. Make purchase.
Conduct online research.
What are the advantages of owning a condominium? Multiple select question. Fewer maintenance responsibilities when compared to a house Tax benefits Privacy Minimum financial commitment
Fewer maintenance responsibilities when compared to a house Tax benefits
Which of the following are questions you should ask yourself when you are considering a major purchase? Multiple select question. How should I pay for it? Which brands should I consider? Do the neighbors have one? Can I delay the purchase?
How should I pay for it? Which brands should I consider? Can I delay the purchase?
Which of the following are possible disadvantages of owning a previously owned home? Multiple select question. Significant financial commitment Limited mobility Security deposit No tax benefits with a previously used home Possibility of significant repairs
Significant financial commitment Limited mobility Possibility of significant repairs
Which of the following are advantages of owning a previously owned home? Multiple select question. Fewer repairs or replacements Low financial commitment Tax benefits Pride of ownership No limitation on mobility
Tax benefits Pride of ownership
Lowballing and highballing sales techniques should be avoided when purchasing a vehicle. True false
True
Which of the following is not true concerning small claims court? You usually do not need an attorney in small claims court. You should use witnesses who can testify on your behalf in small claims court. You can generally sue for as much as $100,000 in small claims court. You can generally sue in small claims courts for amounts ranging between $2,500 and $5,000.
You can generally sue for as much as $100,000 in small claims court.
In _______ a third party tries to settle a grievance and the process is binding.
arbitration
in ______, a third party tries to settle a grievance and the process is binding.
arbitration
Renting is a fairly ______ practice in the United States with about 35% of households living in rental units.
common
The factors that influence the price of a used car include ______. Multiple select question. demand for the model sticker price condition capitalized cost features and options number of miles
demand for the model condition features and options number of miles
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.
experience payment
The information on the label of some food products includes ________ dating that helps the consumer determine freshness. This is a one-word answer.
expiration
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.
financing, payment, finance, payments, borrowing, or borrowings
Depreciation is the largest ______ cost of a new vehicle. expected variable opportunity fixed
fixed
When selecting a lawyer, questions about legal costs should focus on the way charges will be calculated, such as _____ fee, ____ rate, or contingency basis.
flat hourly
A strategy that will help you avoid deceptive business practices is to recall the old adage: "Be cautious about offerings that seem too _______ to be _______" —because they often are.
good true
Your ______, needs, desires, and attitudes are reflected in your choice of a home.
lifestyle
In a(n) ________ process, a third party tries to settle a grievance, but the process is nonbinding.
mediation
Which of the following are advantages of renting a house? Multiple select question. significant tax benefits minimal financial commitment many remodeling or customization possibilities easy to move (mobility)
minimal financial commitment easy to move (mobility)
Brand names are usually: but they are manufactured by superior-quality manufacturers so are likely to be higher quality. made by older companies so they are better. produced by younger companies so they are better. more expensive, and sometimes the private-label products are manufactured by the same companies that produce the brand-name products.
more expensive, and sometimes the private-label products are manufactured by the same companies that produce the brand-name products.
The difference between the sticker price and the dealer's cost is usually the range available for ______. luxury cars financing negotiation rebate
negotiation
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.
negotiation
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.
record
Lemon laws require a _____ for the vehicle after the owner has made repeated unsuccessful attempts to get the car fixed by the dealer.
refund
Approximately 35 percent of U.S. households live in Blank______. rental units mobile homes condominiums their own home
rental units
If the dealer is not willing to pay enough for your used car as a trade-in, you should: drop the price of the old car. sell the old car to an outside party. take the dealer's offer anyway. offer to pay more for the new car.
sell the old car to an outside party.
An express warranty is usually in writing, is created by the __________ or manufacturer, and has two forms: __________ warranty and limited warranty.
seller/manufacturer full
Which of the following is not a drawback of leasing an automobile? small cash outflow costs incurred for certain repairs no ownership interest in the vehicle cost incurred for extra mileage
small cash outflow
You are considering a car with no down payment and monthly payments of $550 for 48 months and an estimated value at the end of the loan term of $8,000. A comparable model can be leased for $550 a month for 36 months with end-of-lease costs of $1,800. Which arrangement should you choose? the lease because the cost is lower the loan and purchase because its cost is lower
the loan and purchase because its cost is lower $550×48−8,000 = 18,400 $550×36 + 1,800 = 21,600
