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WorksheetsCh. 13 Purchasing a Car Review
Total questions: 50
Worksheet time: 25mins
Which of the following is true regarding the automobile marketplace?
The automobile marketplace offers many different ways for consumers to shop.
The automobile marketplace favors sellers and offers no recourse for buyers who have been cheated. .
The automobile marketplace is an example of a monopoly.
The automobile marketplace offers very few options.
Why should trade-in prices and vehicle prices be negotiated separately?
Less tax is paid if they are done separately.purchase.
It is illegal to negotiate them together.
Consumers often get a better deal that way.
They should not be negotiated separately as it makes up one purchase.
The _____ contains a list of residual values of leased cars.
American Automotive Almanac
Automotive Value Guide
American Automotive Leases Handbook
Automotive Lease Guide
The _____ contains a list of residual values of leased cars.
American Automotive Almanac
Automotive Value Guide
American Automotive Leases Handbook
Automotive Lease Guide
The FTC Used-Car Rule does not apply to _____.
new-car dealerships
private sellers
auto superstores
used-car dealerships
Which of the following is an expense that is not actually paid, but can represent a sizeable amount of money?
fuel
depreciation
registration
maintenance
The FTC Used-Car Rules requires which of the following to be displayed on the Buyers Guide sticker?
A description of warranty coverage or lack of it
A description of how many previous owners the car had.
A description of where the car was manufactured.
A description detailing for how much the car was previously sold and repurchased.
When purchasing a used car, it is a good investment to purchase a(n) _____.
air purifier
upgraded battery
VIN history report
anti-corrosive sealant
Which of the following is true regarding lemon laws?
They do not apply to trucks, only cars.
They do not apply to used vehicles.
The help received under lemon laws is automatic and straightforward.
The problem must be well documented, as well as the attempts to fix it.
Which of the following is true regarding vehicle options?
Additional safety options are free, but convenience options are not.
The US Automotive Administration regulates what is considered "standard."
Standard options come at an increased cost.
Different makes and models come with different sets of standard options.
Which of the following costs is unique to leasing a car?
interest paid
finance charges
gap insurance
capitalized cost reduction
Requires a seller or manufacture of a defective vehicle either to replace or repair it or refund the buyer’s money.
certified used car
depreciation
FTC Used-Car Rule
lemon law
Term of a lease, usually 12,000 or 15,000 annually.
FTC Used-Car Rule
lemon law
Magnuson-Moss Warranty Act
mileage limitation
Price of a vehicle for lease including a cash down payment, trade-in allowance, rebate, or other buying incentive.
auto superstore
capitalized cost
capitalized cost reduction
car warranty
Price or value of a vehicle on which a lease is based.
capitalized cost
capitalized cost reduction
car warranty
certified used car
Previously owned vehicle that has received a thorough mechanical and appearance inspection along with necessary repairs and replacements.
car warranty
certified used car
depreciation
FTC Used-Car Rule
Requires dealers to fully disclose to buyers what is and is not covered under a used vehicle’s warranty.
FTC Used-Car Rule
lemon law
Magnuson-Moss Warranty Act
mileage limitation
Interest that is paid on a leased vehicle.
mileage limitation
money factor
option
residual value
Dealership that sells both new and used vehicles that are inspected, serviced, and warranted.
auto superstore
capitalized cost
capitalized cost reduction
car warranty
Assigned by the automobile industry; used to identify an individual automobile.
option
residual value
sticker price
vehicle identification number (VIN)
Provides protections for purchasers of any product that costs over $25 and has a manufacturer’s warranty.
Magnuson-Moss Warranty Act
mileage limitation
money factor
option
Price displayed on a vehicle as its selling price.
money factor
option
residual value
sticker price
Decrease in the value of property as a result of use and age.
certified used car
depreciation
FTC Used-Car Rule
residual value
Worth of a car at the end of the lease.
money factor
option
residual value
sticker price
Feature available for a particular car.
option
residual value
sticker price
Written promise to the customer that should something break, malfunction, or otherwise go wrong with a vehicle within a stated period of time, the manufacturer will make necessary repairs at no cost.
car warranty
FTC Used-Car Rule
Magnuson-Moss Warranty Act
For new cars, the sticker price is the ______________________________, which is recommended by the manufacturer.
MSRP
AARP
SRP
MARSP
The ______________________________ is the length of the lease, which is usually 24, 36, or 48 months.
LEASE TERM
TERMS OF INTEREST
FINAL TERMS
TERMS OF LIMITATION
An endorsement by the ______________________________ is an indicator of reliable servicing.
American Automobile Association (AAA)
American Association (AA)
TRIPLE ACCOUNT
American Automobile (AA)
Your car will have fewer breakdowns and repairs, better fuel economy, and greater trade-in value by keeping up with regular ______________________________.
maintenance
treated nicely
oiling
A(n) ______________________________ must be posted on all used vehicles before offering them for sale or permitting potential buyers to examine them, according to the FTC Used-Car Rule.
Buyers Guide sticker
Buyers Guide
all of the above
non of the above
______________________________ is a publication that lists the estimated resale value of new and used cars.
Kelly blue book
edmunds
all of the above
none of the above
Setting priorities will help you evaluate the pros and cons of each vehicle.
true
false
Before buying a car, it is wise to ______________________________ the car to see how well it handles in traffic, on the open road, and when starting, stopping, turning, and parking.
test
test drive
drivers test
optional drive
Purchasing ______________________________ will cover you if your new car should be stolen or totaled in an accident.
gap insurance
insurance
optional insurance
For a used car to be ______________________________, it must have gone through a thorough mechanical and appearance inspection along with necessary repairs and replacements, as well as meet age and mileage requirements.
certified
non-certified
certified with options
cars generally cost less to buy and insure.
used
slightly used
ugly
junk
A(n) ______________________________ is a vehicle that has serious mechanical problems that the manufacturer has been unable to fix after a reasonable number of attempts.
lame
misused
lemon
fruity
If the borrower fails to repay the car loan, the lender may legally ______________________________ the car and sell it.
repossess
reprimand
total
A(n) ______________________________ will weigh the costs of purchasing the car against the benefits of owning it.
cost-benefit analysis
cost-benefit
cost
total cost benefit
The price or value of the vehicle on which the lease is based is the ______________________________.
capitalized cost
cost analysis
binary cost
amortization cost
A VIN history report will include information on accidents, flood damage, theft, recalls, liens on the vehicle, odometer records, and manufacturing details.
Describes the information included in a VIN history report.
Describes the information included in a TIN history report.
Describes the information included in a VISABLE history report.
The lessee’s initial costs and monthly payments are less than those of a buyer. However, the lessee does not own the car at the end of the lease term.
Explains the difference between buying a vehicle and leasing one.
Explains the balance between buying a vehicle and leasing one.
Explains the equality between buying a vehicle and leasing one.
A good reference to use when shopping for a vehicle is (any) Kelley Blue Book, Edmunds, Official Used Care Guide, Auto Safety Hot Line, Autobytel, Autotrader.com, Intellichoice, SmartMoney Auto Guide, Automobile Magazine, Car and Driver, Motor Trend, Consumer Reports, Consumer Research, and Kiplinger’s Personal Finance.
Names an example of a resource to use as references when shopping for a vehicle.
Names an non-example of a resource to use as references when shopping for a vehicle.
Names an improper example of a resource to use as references when shopping for a vehicle.
The steps of financing a vehicle are to obtain a copy of your credit report, gather supporting documents, determine the amount you need to borrow, decide the length of your loan, and shop around and get preapproved.
Are the steps in financing a vehicle?
Are not the steps in financing a vehicle?
What are the advantages of leasing a vehicle?
a vehicle is that the lessee’s initial cost and monthly payments are generally lower than those of a buyer.
a vehicle is that the lessee’s initial cost and monthly payments are generally higher than those of a buyer.
a vehicle is that the lessee’s initial cost and monthly payments are generally equal than those of a buyer.
What does gap insurance do?
pays the difference between what you owe on a vehicle and what the car is worth should it be stolen or totaled in an accident.
pays less between what you owe on a vehicle and what the car is worth should it be stolen or totaled in an accident.
pays more between what you owe on a vehicle and what the car is worth should it be stolen or totaled in an accident.
What factors should be considered when shopping for a vehicle?
Consider how you will prioritize the car’s style, options, and warranty coverage.
Consider how you will normalize the car’s style, options, and warranty coverage.
Consider how you will look at the car’s style, options, and warranty coverage.
Name one of the laws that protect consumers when purchasing a vehicle.
Truth in Lending Act and .
lemon laws
the Magnuson-Moss Warranty Act
None of the above
all the above
What auto costs should be included when considering the cost of the vehicle?
gasoline, maintenance,
insurance premiums, licensing
registration, repair costs
all of the above
none of the above
