Car Ownership

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Questions and Answers

Which of the following is NOT a common operating expense of owning a car?

Repairs
Fuel
Maintenance
Parking fees (correct)

What is one potential consequence of not understanding the different costs of car ownership?

Purchasing a lemon
Overspending
Being overcharged
All of the above (correct)

What is the average annual cost to operate a car for a vehicle driven 15,000 miles a year according to AAA’s studies?

$2,500
$6,000
$4,374 (correct)
$1,000

What should a wise consumer do before making a car purchase?

All of the above (D) Signup and view all the answers

What should you consider in order to determine how much you can afford to spend on a car?

All of the above (D) Signup and view all the answers

Which two websites provide professional and consumer reviews of cars?

Edmunds and Kelley Blue Book (C) Signup and view all the answers

What is the sticker price of a car?

The manufacturer's suggested retail price (B) Signup and view all the answers

What is the dealer's invoice price for a car?

The price the car dealership bought the car for (B) Signup and view all the answers

What is the purpose of the business manager at a car dealership?

To aggressively sell extras to customers (D) Signup and view all the answers

What is the bait and switch tactic used by unscrupulous dealerships?

Advertising a car at a low price and then selling a more expensive car (A) Signup and view all the answers

True or false: Comparison shopping can save you money when buying a car?

True (A) Signup and view all the answers

True or false: It is important to get preapproved for a car loan before going to a car dealer?

True (A) Signup and view all the answers

True or false: Negotiating the price of a new car is not necessary?

False (B) Signup and view all the answers

Match the following terms with their definitions:

Edmunds and Kelley Blue Book = Websites providing information about value, performance, customer satisfaction, and safety of cars Preapproved Car Loan = A process that involves visiting a bank before going to a car dealer to shop for the lowest Interest rate Dealer’s Invoice Price = The price the car dealership bought the car for minus any incentives they received from the car manufacturer Sticker Price = The price that appears on the window sticker of the car, also called manufacturer's suggested retail price Signup and view all the answers

Match the following car buying tactics with their descriptions:

Bait and Switch = A tactic where a dealer advertises a car at a very low price to lure you in, then tries to sell you a more expensive car Focusing on Monthly Payments = A tactic where dealers try to get you to focus on the monthly car payment and not the purchase price The Warranty Scam = A tactic involving dealers trying to sneak a warranty into the terms of your deal, inflating the monthly price Signup and view all the answers

Match the following car dealership roles with their responsibilities:

Car Dealer = Makes money off of the financing of cars and often charges higher interest rates than a bank Business Manager = A trained salesperson who tries to sell you “extras” during the paperwork process Signup and view all the answers

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