Assignment:
Researching Consumer Purchases: Select a product of your choice. Obtain online reviews to evaluate and compare different brands of that product. Also obtain information on the product from people who sell the item and those who have recently purchased it. Compare the information received from these sources. Using the consumer buying matrix (p. 271 of your text), analyze this product. What factors affected the selection of the attributes and weights you chose for this purchase analysis? Determine which brand of product you prefer and justify your answer.
Identifying and Solving Consumer Problems: Conduct online research to determine the most common sources of consumer complaints. Interview someone who has had a consumer complaint. What was the basis of the complaint? What actions did the person take? Was the complaint resolved in a satisfactory manner?
Online Car Buying: With a click of the mouse, Mackenzie enters the auto “showroom.” In the past few months she had realized that the repair costs for her 11-year-old car were accelerating. She thought it was time to start shopping for a new car online and decided to start her Internet search for a vehicle by looking at small and mid-sized SUVs. Her friends suggested that Mackenzie research more than one type of vehicle. They reminded her that comparable models were available from various auto manufacturers. In her online car-buying process, Mackenzie next did a price comparison. She obtained more than one price quote by using various online sources. She then prepared an overview of her online car buying experiences. Mackenzie’s next step was to make her final decision. After selecting what she planned to buy, she finalized the purchase online and decided to take delivery at a local dealer.
In recent years, less than 5 percent of car buyers have actually purchased vehicles over the Internet. That number is increasing; however, car buying experts strongly recommend that you make a personal examination of the vehicle before taking delivery.
Questions:
Based on Mackenzie’s experience, what benefits and drawbacks are associated with online car buying?
What additional actions might Mackenzie consider before buying a motor vehicle?
What do you consider to be the benefits and drawbacks of shopping online for motor vehicles and other items?
Determining Appropriate Housing: What type of housing would you suggest for people in the following life situations? (a) A single parent with two school-age children; (b) A two-income couple without children; (c) A person with both dependent children and a dependent parent; (d) A couple near retirement with grown children. Explain your answers.
Housing Decisions: When Mark and Valerie Bowman first saw the house, they didn’t like it. However, it was a dark, rainy day. They viewed the house more favorably on their second visit, which they had expected to be a waste of time. Despite cracked ceilings, the need for a paint job, and a kitchen built in the 1980s, the Bowmans saw a potential to create a place they could call their own.
Beth Young purchased her condominium several years ago. She obtained a mortgage rate of 6.75 percent, a very good rate then. Recently, when interest rates dropped, Beth was considering refinancing her mortgage at a lower rate.
Matt and Peggy Zoran had been married for five years and were still living in an apartment. Several of the Zorans’ friends had purchased homes recently. However, Matt and Peggy were not sure they wanted to follow this example. Although they liked their friends’ homes and had viewed photographs of homes currently on the market, they also liked the freedom from maintenance responsibility they enjoyed as renters.
Questions:
How could the Bowmans benefit from buying a home that needed improvements?
How might Beth Young have found out when mortgage rates were at a level that would make refinancing her condominium more affordable?
Although the Zorans had good reasons for continuing to rent, what factors might make it desirable for an individual or a family to buy a home?
Exercises:
Kelly and Tim Browne plan to refinance their mortgage to obtain a lower interest rate. They will reduce their mortgage payments by $83 a month. Their closing costs for refinancing will be $1,670. How long will it take them to recover the cost of refinancing?
In an attempt to have funds for a down payment, Jan Carlson plans to save $3,500 a year for the next five years. With an interest rate of 3 percent, what amount will Jan have available for a down payment after the five years?
Ben and Carla Manchester plan to buy a condominium. They will obtain a $150,000, 30-year mortgage at 6 percent. Their annual property taxes are expected to be $1,800. Property insurance is $480 a year, and the condo association fee is $220 a month. Based on these items, determine the total monthly housing payment for the Manchesters.
You estimate that you can save $3,800 by selling your home yourself rather than using a real estate agent. What would be the future value of that amount if invested for five years at 9 percent?
