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