Personal Finance Chap 6
Owners of new cars are protected by the ____ laws when repeated attempts have been made to have the car fixed without success.
lemon
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
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 factors that influence the price of a used car include:
-features and options -demand for the model -condition -number of miles
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
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.
-same -30
The range available for negotiation for a new car is the difference between the ____ price and the _____ cost.
-sticker -dealer
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
The advantage of ____ preowned vehicles is that there is a rigorous inspection and the original manufacturer's guarantee of quality.
certified
The loss of a vehicle's value due to time and use and the largest fixed expense of a new car is called ____.
depreciation
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
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
Service contracts and extended warranties are usually a wise purchase because they cover almost anything that could go wrong with the product.
false
A ____ warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
full
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.
The information on the label of some food products includes ____ dating that helps the consumer determine freshness or shelf life of a perishable product.
open
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.
pay
Which of the following automobile costs are variable costs?
-Repairs -Oil -Gas -Parking costs and tolls
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 ____.
-value -owed
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
Store-brand and private-label products are which of the following?
Low-cost alternatives to national brands
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
Product labels on appliances include information on operating ____ to assist you in selecting the most energy-efficient models.
costs
A(n) ____ warranty covers a product's intended use or other basic understandings that are not in writing.
implied
One of the most useful sources of information regarding products during the preshopping phase is _____ that provide buying guidance and shopping suggestions.
online reviews
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
Lease payments are often less than loan payments.
true
Banks, credit ____, and consumer finance companies are all sources of car loans.
union
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 automobile costs are fixed ownership costs?
-Depreciation -Interest on car loans -Registration fees -Insurance
Which of the following questions are considered when selecting a lawyer?
-How will charges be set? -When is payment due? -Is the lawyer experienced in similar types of cases?
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 -daily
The small claims court process usually takes place without which of the following?
A lawyer
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
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 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 is the final step in the process of resolving consumer complaints?
Take legal action
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.
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.
aid
In ____, a third party tries to settle a grievance through a legally-binding process.
arbitration
Most consumer complaints are resolved:
at the original location
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
The first step in the consumer complaint process is litigation.
false
In ____, a third party tries to settle a grievance. However, the process is non-binding.
mediation
A person could choose not to participate in a class-action suit and instead file an individual lawsuit.
true
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
Most consumer complaints are resolved at the original sales location.
true
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
The driving costs of an automobile are influenced by the number of miles you drive and the size of the car.
true
The main variables of a car warranty include time, mileage, and parts they cover.
true
Two important sources of used car prices are Edmund's Used Car Prices and the Kelley Blue Book.
true
Which of the following are techniques that you should avoid when purchasing a vehicle?
-Asking how much can you afford per month -Low balling -Leaving a deposit to hold the vehicle -Highballing
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
Which of the following is NOT true?
A limited warranty states that a defective product can be fixed or replaced within a certain time.
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
When a used car is sold "as is," the seller assumes responsibility for any necessary repairs in the first 30 days.
False
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.
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
Depreciation is the largest ______ cost of a new vehicle.
fixed
Brand names are usually:
more expensive, and sometimes the private-label products are manufactured by the same companies that produce the brand-name products.
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
price
The two factors that influence driving costs are the:
size of the car and the number of miles you drive.
Well-maintained and certain high-quality vehicles, such as BMW, depreciate at ____ (higher/slower) rates.
slower
The advantage of certified preowned vehicles is that:
there is a rigorous inspection and the original manufacturer's guarantee of quality.
The various groups to which special new car rebates are sometimes offered include students, teachers, credit union ____, and ____ ____ agents.
- members -real -estate
Which of the following is not something included in a road test for a used car?
Check oil level and for signs of leaks
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
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
The two key sources of current used-car prices in the United States are Edmund's Used Car Prices and ____ Blue Book.
Kelley
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 is true regarding comparison shopping for used vehicles?
Warranties offered by used-car dealers are usually limited
A limited warranty covers only certain aspects of the product and requires the buyer to pay part of the costs for:
shipping or repairs.
A used car dealer must display a ____ ____ sticker telling whether the vehicle comes with a warranty.
-buyers -guide
According to the textbook, when considering the purchase of a used car, a road test should consist of:
-checking brakes at different speeds. -listening for smoothness of acceleration and transmission. -checking the ease of steering and vehicle control.
Which of the institutions are used for auto loans?
-consumer finance companies -banks -credit unions
A full warranty covers only certain aspects of the product and requires the buyer to share in the cost of repairs or shipping.
False
Until the new-car price is set, you should not indicate that you intend to use the dealer's ____ plan.
credit
The difference between the sticker price and the _____ is the range available for negotiation.
dealer's cost
A ____ (full/limited) warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
full
When comparing the cost to buy versus the cost to lease an automobile, the ______ cost of the security deposit should be considered.
opportunity
Social factors that affect your buying habits include peer pressure, culture, and inflation.
False
You should begin the consumer complaint process at the corporate headquarters of the store where the problem began.
false
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 would be considered wise buying techniques?
-Seeking coupons and discounts -Comparing brands to determine which is best for your purpose -Evaluating product quality
.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
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
Buying holiday items at reduced prices in late December is referred to as what?
Timing a purchase
You should conduct regular vehicle care in order to _____ the life of your vehicle.
extend
Which of the following are important considerations when choosing a store at which to shop?
-Location and prices -Selection and services available
Sources of automobile servicing include:
-service stations -independent auto repair shops -car dealers
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
Wise consumers typically use which two items to achieve better pricing?
Coupons and rebates
Which of the following is not a business that offers automobile maintenance and repair services?
Public Works organizations
A wide variety of economic, social, and personal factors affect daily buying habits.
True
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
To get better pricing on the items they purchase, many consumers look for coupons or rebates to lower prices.
True
One of the factors that influences the price of buying a used car is capitalized cost.
false
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
Dealing with the person who has ____ the to give you a lower price is a vital factor of negotiations.
ability
According to the text, your decision to use a particular retailer is influenced by location, product selection, services available, and ____.
price
According to the text, special rebates are sometimes offered to ____, teachers, credit union members, and real estate agents.
students
Buying which of the following items would be timing strategies for purchases that could save you money?
-Buying summer clothes in late summer -Buying holiday decorations in late December and early January -Buying winter clothes in late winter
Dealing with the person who has the ____ to give you a lower price is a vital factor of negotiations.
ability
One possible ____ (advantage/drawback) of leasing an automobile is the smaller upfront cash outlay (i.e., security deposit).
advantage
While a used car may not have an express warranty, most states have ____ warranties to protect used-car buyers.
Implied
The common sources of information regarding products during the preshopping phase include personal ____, business organizations, media, and independent testing agencies such as Consumer Reports.
contacts
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.
price
Which items below are used in determining the cost of an automobile 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
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 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).
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
The second step in wise online buying activities as presented in the text is which of the following?
Compare stores
