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49 Cards in this Set

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The key to success in negotiating a car purchase is to obtain the _____ before discussing any other aspects of the deal
price of the car*
When you lease a car you are basically paying the difference between its beginning value and its projected value at the end of the lease called its
Residual Value*
As used in the field of insurance, risk means
uncertainty*
Your auto insurance policy liability limits are 100/250/50. You fall asleep at the wheel and hit 4 parked cars and a store causing $160,000 in damage. How much will your company cover of this loss?
$50,000*
To affordably apply the “large loss principle” to automobile insurance, you would want to select a
higher deductible and higher liability limits.*
Insure the losses that you cannot afford and assume the losses that you can reasonably afford
Large-loss principle
You can compare leasing and buying a vehicle by simply comparing the monthly lease payment to the monthly loan payment if you purchased vehicle instead.
False
With a closed-end lease on a vehicle you may be required to pay the difference between the actual market value of the vehicle at the end of the lease period and the residual value for the vehicle that was projected when the lease began.
False
the projected value of a leased asset at the end of the lease time period
residual value
measures the rent charge portion of your payment
money factor
includes the price fo the vehicle plus what the leasee paid to finance the purchase plus any other items you agree to pay for over the life of the lease, including insurance or a maintenance agreement
gross capitalized cost
moneys paid on the lease at its inception
capitalized cost reductions
determined by subtracting the capitalized cost reductions from the gross capitalized cost
adjusted capitalized cost
you must pay any difference between the projected residual value of the vehicle and its actual market value at the end of the lease period
open-ended lease
the holder pays no charge if the end-of-lease market value of the vehicle is lower than the originally projected residual value
close-end lease
With a balloon automobile loan, the last payment is roughly equivalent to the projected residual value of the vehicle after the last loan payment is made.
True
the last monthly payment equals the projected residual value of the vehicle at the end of the loan period
balloon automobile loan
The most reliable source of high quality used vehicles is new vehicle dealerships although the prices also tend to be higher.
True
The best way to handle being lowballed is to walk out of the dealership without signing anything.
True
When a dispute is resolved through arbitration, the arbitrator will render a decision that is binding on at least one of the parties to the dispute.
True
A vehicle dealer who offers a higher trade-in value than a vehicle is actually worth and then makes up the difference by charging an overly high price on the purchased vehicle is engaging in
High-balling
When buying a vehicle, preshopping research would focus on all but which of the following?
Which vehicle is the best buy
The manufacturer's suggested retail price for a new vehicle is also called the
Sticker Price
Which of the following steps in the buying process has the goal of finding the best buy?
Comparison Shopping
Which of the following is a disadvantage of an open-end lease as compared to a closed-end lease?
You may be required to come up with more money at the end of an open-end lease period.
Which is the term used to describe the charge assessed at the time of turning in a leased vehicle to pay for preparing the vehicle for resale?
disposition fee
Attempts by a vehicle seller at the time of signing the contract to raise the price that had previously been agreed upon is referred to as
Lowballing
Under which of the following dispute resolution procedures does a neutral third party assist the parties to the dispute in reaching a mutually agreeable solution?
Meditation
A capitalized cost reduction might be charged on a lease if you desire to get out of a lease arrangement early.
False
A disposition fee on a vehicle lease is assessed when you turn in the vehicle at the end of the lease in order to get it ready for resale.
True
The starting point for any negotiations for a new or used vehicle is your affordable monthly payment.
False
Lowballing is an attempt by an auto dealer to raise the price of a vehicle after you have already orally agreed upon a price.
True
Major purchase decisions should be made at the dealer's place of business so that any questions that you may have can be readily answered.
False
All of the major vehicle manufacturers offer alternative dispute resolutions programs so you do not have to go to court to get an unbiased resolution to a warranty dispute.
True
Before interacting with a seller in any major way when making a major expenditure you should do all of the following except
Comparison Shopping
invoice price/seller's cost are synonymous?
True
One of the best ways to get professional help when buying a new vehicle is to consult
A new vehicle buying service
The dollar figure in a lease contract that includes the price of the vehicle plus what the leasee paid to finance the purchase is the
gross capitalized cost.
Leasing costs for a new vehicle are partially based on its projected value at the end of the lease time period called its
Residual Value
Monies paid on a lease at its inception including any downpayments, trade-in values or rebates are referred to as the
capitalized cost reduction.
Transfering the title from the lender to the buyer is not an option when the last payment is due on a balloon auto loan?
True
The process of discussing the actual terms of an agreement with a seller is called
negotiating
An early termination charge may be required on a lease should you want to get out of the lease early.
True
With an open-end lease on a vehicle you may be required to pay the difference between the true market value of the vehicle at the end of the lease period and the residual value projected when the lease began.
True
The starting point for any negotiations for a new or used vehicle is the actual cash price of the vehicle.
True
The key to success in negotiating a new vehicle purchase is to get a price for the vehicle itself before discussing all other aspects of the deal such as trade-in value and APR.
True
features of a lease is touted by dealers as being useful for comparing among leases but really is not useful for measuring the overall cost of financing?
Money Factor
Which of the following features of a lease pays for a credit report, application fee and other paper work?
Acquisition Fee
In which step of the buying process would you come to an agreement with a seller on the actual terms of the deal?
Negotiating