FIN 340 Ch. 8
Impulse buying
Unplanned purchasing which can result in financial problems
Make purchase
Use secure buying website, seek discounts, coupons, select payment method based on security fees and other factors
Unit pricing
Uses a standard unit of measurement to compare the prices of packages of different sizes
Food cooperatives
Usually based in a community group or church buy grocery items in large quantities
Express warranty
Usually in written form, is created by the seller or manufacturer and has two forms: full warranty and limited warranty
Implied warranty
covers a product's intended use or other basic understandings that are not in writing
Not
Service contracts are - warranties
Arbitration
Settlement of a difference by a third party whose decision is legally binding
Full warranty
States a defective product can be fixed or replaced during a reasonable amount of time
Rebate
partial refund of the price of a product
Small claims court
A person may file a claim involving amounts below a set dollar limit. This settles minor disagreements and the process usually takes place without a lawyer
Annual percentage rate
APR
Aesthetic features
Add to the vehicles visual appeal such as metallic paint, special trim, and upholstery
Psychological facts
Affect compulsive shopping
Service contracts
Agreements between a business and a consumer to cover the repair costs of a product
Government agencies
At the local, state, and federal levels provide information sources, complaint hotlines, and educational programs
APR
Best indicator of the true cost of credit
Dollar stores
Buying at these stores can result in bargains on many basic needs
Purchasing strategies
Can result in appropriate spending patterns, avoiding overusing credit, achieving goals and long terms financial security
Auto broker
Car buying services
Personal contacts
Family, friends, and other who can provide information about products performance, brand quality, and prices
Service contracts
For a fee, these agreements protect the buyer from high servicing costs resulting from certain repairs and other losses
Consumer buying activities
Involve daily consumer purchases and major household expenditures
Mediation
Involves the use of a third party to settle grievances. Nonbinding process that can save time and money compared to other dispute resolution methods
Plan for future purchases
Keep receipts, other documents, know return, complaint process, watch emails for special offers, evaluate time and effort
Depreciation
Largest fixed expense associated with a new automobile
Class action suit
Legal action taken by a few individuals on behalf of all the people who have suffered the same alleged injustice. The class of eople are represented by one lawyer or by a group of lawyers working togeter
Cooperative
Lesser known shopping location, non profit organization whose member owners save money on various products and services
Social factors
Lifestyle, interest, hobbies, peer group, culture, advertising, media
Brand name
These products are usually more expensive than non brand products but they offer a consistency of quality for which people are willing to pay
Conduct online research
Compare brands and features, use label and warranty information, use product testing reports to assess quality, safety, nutrition
Compare stores
Consider both stores and online, evaluate price, service, product quality, warranties, determine reputation, location
Credit terms
Consider both the APR and the finance charge when comparing - of different lenders
Maximize
Consider opportunity costs to - your satisfaction you obtain from available financial resources
Leasing
Contractual agreement with monthly payments for the use of an automobile over a set time period, typically 3, 4, or 5 years
Limited warranty
Covers only certain aspects of the product, such as parts or requires the buyer to incur part of the costs for shipping or repairs
Invoice price
Dealer's cost. An amount less than the sticker price
Open dating
Describes the freshness of shelf life of a perishable product. "Use before" "Not to be sold after"
Negotiation range
Difference between the sticker price and the dealer's cost
Lemon laws
Enacted by Columbia that require a refund for the vehicle after the owner has made repeated attempts to obtain servicing
Buyer's guide
Encourages you to have the used car inspected by a mechanic and to get all promises in writing
Credit union
Example of a financial services cooperative
Residual value
Expected value of the vehicle at the end of the lease
Federal trade commission
FTC
Economic, social, personal
Factors that affect daily buying habits
Economic, social, personal
Factors that influence, your spending, saving, and investing choices and when combined with wise buying activities can contribute to your long term financial security
Personal factors
Gender age, occupation, income, education, martial status, family size
Warranty of merchantability
Guarantees that the product is fit for the ordinary uses for which it is intended
Competition, technology
Has resulted in greater emphasis on superstores, specialty shops, and online buying
Effective negotiation
Having all the necessary information about the product and buying situation and dealing with a person who has the authority to give you a lower price or additional features, such as the business owner or store managers
Mediator
Impartial person in mediation
Convenience options
Including power seats, air conditioning, sound systems, power locks, rear view window defoggers, tinted glass
Warranty of title
Indicates that the seller has the right to sell the product
Economic factors
Inflation, interest rates, tax rates, government regulations, product safety
Money factor
Interest rate being paid on the capitalized cost
FTC
Requires businesses that sell used cars to place a buyer's guide sticker in the windows of cars for sale
Customer complaints
Mostly result from defective products, low quality, short product lives, unexpected costs, deceptive pricing, and fraudulent business practices
Business organizations
Offer advertising, product labels, and packaging with basic facts about price, ingredients, quality, and availability
Legal aid society
One of a network of publicly supported community law offices that provide legal assistance to people who cannot afford their own attorney
Trade off
Paying a higher price over time by using credit to buy items that you need now, buying unknown poor quality brands that are less expensive
Capitalized cost
Price of the vehicle
Unit pricing
Price/Number of units of measurement
National brand
Products are highly advertised items available in many stores like Green Giant, Nabisco, Kelloggs, Kraft
Store brand, private label
Products sold by one chain of stores that are low cost alternatives to famous name products. Usually associated with a chain like Kroger brand, Walgreens, Costco
Prepaid legal services
Provide unlimited or reduced fee legal assistance fora set fee and provide certain basic services such as telephone consultation and preparation of a simple will
Independent testing organizations
Such as Consumers Union, report the quality of products and services. Underwriters Laboratory tests products for electrical and fire safety to assure items meet safety standards
Sticker price
Suggested retail price printed on a vehicle label. Represents the base price of the car with cost of affed features
Media sources
Television, radio, etc that offer purchase location availability, prices, shopping suggestions, and product reviews from other consumers
Artbitratior
Third party in arbitration
Purchasing strategies
Timing of purchases, purchase location, brand comparison, label, package information, price comparison, warranties
Mechanical devices
To improve performance such as larger engine transmission, power steering, power brakes, and cruise control
Mediator
Tries to resolve a conflict between a customer and a business through discussion and negotiation
Highballing
When offered a very high amount for trade in vehicle, with the extra amount made up by increasing the new car price
Lowballing
When quoted a very low price that increases when add on costs are included at the last moment
Warranty
Written guarantee from the manufacturer or distributor that specifies the conditions under which the product can be returned, replaced, or repaired
