Consumer Purchasing and Legal Protection Chpt8

advertisement
Objectives
1.
2.
3.
4.
Identify strategies for effective consumer
buying
Implement a process for making consumer
purchases
Describe steps to take to resolve consumer
problems
Evaluate legal alternatives available to
consumers




Daily buying decisions involve trade-offs
Wide variety of economic, social and
personal factors affect daily buying habits
Long term stability is achieved by not
spending the entire current income
Overspending leads to misuse of credit

Timing purchases.


Store selection.




Be aware if the price varies
with the time of the year.
The retailer you use depends on a variety of
factors.
Once choice is a cooperative, which is a nonprofit organization, and members save money.
Comparison shopping of store and national
brands, or impulse buying (unplanned
purchasing).
Look for information on the label and open
dating
(continued)

Price comparison.
Unit pricing provides a standard of measurement.
Coupons (online: coolsavings.com; centsoff.com;
couponsurfer.com) and rebates (partial refund).
 More convenience, and ready-to-use products, may
mean higher prices. Large is not always the best buy,
and “Sale” prices vary among stores.
Evaluate warranties.
 Full or limited express warranties, usually written.
 Implied warranties of merchantability.
Service contracts -also called extended “warranties.”






Phase 1-Preshopping Activities
Problem identification.
Information gathering.
Personal Contacts
 Business Organizations
 Media Information
 Independent Testing Organizations
 Government Agencies
 Online Sources



Phase 2: Evaluation of Alternatives
Price analysis.




(continued)
Prices can vary for all types of products.
Assess differences in quality in relation to price.
Price and quality are not always closely related.
Comparison shopping can be beneficial when...
Buying expensive or complex items.
Buying items that you purchase often.
It can be done easily with advertisements, catalogs, or
online.
 Different sellers offer different prices and services.
 Product quality or prices vary greatly.




Mechanical devices.


Engine size, transmission, power steering, cruise
control, and antilock brakes.
Comfort and convenience options.
Power seats, air conditioning.
 Stereo systems, power locks.


Aesthetic features.


Metallic paint.
Special Trim.






Common sources of
used cars include
New-car dealers
Used-car dealers
Private sales
Auctions and dealers
sell previously owned
cars
Used-car superstores
Online used-car
businesses

Advantages.
Small cash outflow.
Lower monthly
payments than buying.
 Lease provides detailed
records - helps if you
use your car for
business purposes.



Disadvantages.
No ownership interest.
Must meet
requirements.
 May have additional
costs for extra mileage,
turning the car in early,
or for certain repairs.






Capitalized cost - the price of the vehicle.
Average buyer pays 92% of list, average
person who leases pays 96% of list.
Money factor - interest rate.
Monthly payment amount and number of
payments.
The residual value - expected value of the
vehicle at the end of the lease. You may
decide to return, keep, or sell the vehicle. If
the residual value is less than market value,
return it.

Negotiation may be used in some buying
situations.




Used-Car Price Negotiation
Price information sources




Have all the necessary information.
Deal with a person who has the authority to give
you a lower price or additional features.
Edmund’s Used Car Prices or edmunds.com
NADA Official Used Car Guide.
Kelly Blue Book kbb.com
The more new cars sold the more used cars
there are for sale, keeping the prices down.



Sticker price - suggested
retail price.
It includes the base
price of the vehicle plus
accessories.
Invoice price - dealers
cost.
Know the dealer’s cost
by consulting...
Consumer Reports
www.consumerreports.or
g
 Edmund’s New Car
Prices
www.Edmund's.com


Buy in winter, early
spring or end-of-month.



Price bargaining - compare dealers.
Set-price dealers.
Car buying services.



Also called an auto broker.
$50-$200 over dealer’s cost.
Online car buying


(continued)
www.autobytel.com or autoadvisor.com.
The sales agreement - specific details.
Consumer protection for new-car buyers.

Warranties and lemon laws.

Financing sources.



Consider the length of the loan.


Banks, credit unions, other financial institutions,
finance companies, or dealer financing.
Get preapproved for a certain amount.
Upside down equity means that your car is worth
less that what you still owe on your car loan.
Check the APR and any rebates.






Three days to cancel some contracts of
=>$25.
Maintenance and ownership costs may be
associated with some purchases.
Use the item correctly to have improved
performance and fewer repairs.
Investigate, evaluate and negotiate a variety
of servicing options.
Complain if you are not satisfied with a
purchase.
Consider what you have learned from the
purchase.

Fixed Costs.
Depreciation is the largest fixed cost.
 Insurance.
 License, registration and taxes.


Variable Costs.
Gas and oil changes.
 Tires, other wear and tear items.
 Maintenance and repairs.




(continued)
Keep good expense records.
Follow the maintenance schedule in the
manual.
Vehicle servicing options.






Car dealers.
Automobile repair shops.
Service stations.
Department and discount stores.
Specialty shops such as oil/lube, muffler,
transmission, and tire shops
Be alert for signs of fraud.
Download