University:
University of Mississippi
Course:
BUS 271 | Business Communication
Academic year:

2021
Views:

359

Pages:

3
Author:

Kaiden Murphy

Automobiles New vs used Two components: financial and emotional Buying a new car (financing, warranties, maintenance) Extended Warranties New cars often come with extended warranties that cover major items and components and may cover 10 years or 100,000 miles. Buying a used car Depreciation-the loss in value an asset experiences over time (pg129) o The significant of drop in value happens in the first year of ownership o Driving it off the lot loses 20% value The best value for your auto dollar-buy at the beat price, finance at the beat rate, drive for many years. Question Average 60-month new car loan interest rate (APR) is A. B. C. D. 7.2% 5.1% 4.2% 3.5% Invoice Price (pg130) The actual dealer invoice price vs the sticker price o Usually lower than what is in the window-can negotiate Question Information related to personal financial literacy could be found on the following web sites, except: A. www.annualcreditreport.com B. www.kellybluebooks.com C. www.artgallery.com Negotiating Several areas or price components available on the sticker: o Destination and delivery charges o Add-ons-extra services o ADM-additional dealer markup Benefits and Drawbacks of Buying Benefits o Own for a number of years o When sold or traded in the auto has the same value o No mileage limit o Personalization Drawbacks o Financing and loans o Debt and interest expenses Benefits/Drawbacks of Leasing Benefits: o Legitimate way to get a car Drawbacks o Leasing is an expensive way to have a car o Monthly payments built no equity o Predetermined period o Mileage o At the end buy a car without trade-in or lease again Question Which of the price component below is generally told by a dealer (available on the sticker) while buying a car? A. B. C. D. Holdback Destination and delivery charges Leasing information Closing costs Financing Dealer financing o Some offer low interest, 0 percetn down, cash-back rebates with great credit ranking Bank/credit union financing o Offer competitive rates o Preapproval puts you in a strong bargaining position Third party financing o High interest rates for poor credit o Loans are very expensive o Payments may be made weekly in some cases o If you fail to pay-car will be repossessed-you will still owe the difference Question When financing an automobile, borrowers with low credit rate will have a lower interest rate than borrowers with high credit. A. True B. False