Purchasing Unit Personal Finance

How do you find the Finance fee?

(Net Cap Cost + Residual Value) X Money Factor

How do you find the Depreciation Fee?

(Net Cap Cost - Residual Value) ÷ Number of Months of Lease

What are the 3 types of decisions?

1) routine 2) limited 3) extensive

5 steps to resolve costumer complaints

1)Go back to place of purchase 2)Contact the company headquarters 3)Contact a consumer agency 4)Dispute resolution 5)Take legal action

What are the 5 step purchasing decision model in order?

1)Problem recognition 2)Information Search 3)Evaluations of Alternatives 4)Purchase decision 5)Post-purchase evaluation

What is an example of a extensive decision?

A car (a really expensive purchase)

What is an example of a limited decision?

A couch (something you will use a lot)

Dealer hold back

A percentage of the total MSRP that the manufacturer holds and then gives back to the dealer, often at the end of the year or quarter. Holdback may vary from dealer to dealer and may depend upon other factors such as dealer quotas.

Luxury Tax

A tax on passenger vehicles that have a purchase price higher than $45,000.

Gas Guzzler Tax

A tax on vehicles that get gas mileage below 19 Miles Per Gallon.

How do you find the monthly lease payment?

Depreciation Fee + Finance Fee

Customer Cash Incentives(rebates)

Discounts given by the manufacturer to the customer to increase the sales of a particular model. Customer incentives or rebates are usually advertised discounts that a buyer receives from the manufacturer and signs over to the dealer as part of the down payment.

Dealer incentive

Discounts given by the manufacturer to the dealer to increase the sales of a particular model. Dealer incentives are unadvertised discounts dealers get from the manufacturer; knowing about one gives you more room to negotiate.

Fraud

Dishonest business practices to deceive the public

Service contract

Extended warranty

6 terms used when leasing a car

Gross Cap Cost Cap Cost Reduction Net Cap Cost Residual Depreciation Money Factor

What is an example of a routine decision?

Ketchup (something you buy all the time)

MSRP

Manufacturer's Suggested Retail Price. The retail price is set by the manufacturer. The government requires all new cars to have a list price or sticker price.

Option packages

Manufacturers bundle and price equipment options in packages to simplify the manufacturing process. They're typically given names like Convenience, Preferred Equipment or Quick Order. If you want most of the options included, a package may be a good deal.

Dealer advertising fee

Manufacturers charge their dealerships for a brand's national advertising, and they include that charge in the dealer-invoice price. Regional dealer associations may also charge local newspaper, radio, and television ads, and it has become increasingly common for dealers to pass along a few hundred dollars of that expense to each new car sale.

Destination Charge

The cost to ship the vehicle from the factory to the dealer.

Dealer invoice price

The maximum amount the dealer pays the manufacturer for a vehicle. Given manufacturers use of dealer incentives and hold backs, it is no longer your bottom line when vehicles are in good supply.

Consumer reports bottom line price

The place to start when negotiating. It takes into account the current dealer incentives and holdbacks that may be in effect.

Base price

The price of the vehicle with only standard equipment (no packages or options).

Implied

Unwritten

Warranty

guarantee from seller stating conditions under which a product is returned.

Express

specifically written