38 terms

ch 7- consumer durables

STUDY
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consumer durables
consumer goods that provide benefits that last at least one yr
mail order merchandise rule
protects customers against untimely shipment of products
identity theft
someone uses your identity to run up fraudulent purchases
warranty/guarantee
sellers assumption or responsibility for quality, character or suitability of goods sold
as is
seller bears absolutely no responsibility for quality of performance of the good
implied warranty
warranty created by the operation of law when no express warrant exists
merchantability
buyer has right to expect that good is generally of same quality as similar goods in its class and that it does what its built to do
fitness of purpose
if buyer relying on seller to select a good for particular purpose and seller has reason to know of that purpose, good should prove suitable
express warranty
oral or written agreement between buyer and seller concerning character/performance of good
puffery
persuasive sales talk overly praising the good
magnuson-moss warranty act of 1975
federal law regulating conditions and limitations contained in express warranties
full warranty
during specified time period, purchases are entitled to full protection, including lemon protection and all repair related costs
lemon protection
if merchandise cant be repaired after reasonable # of attempts, customer can elect to receive a replacement or refund
limited warranty
express warranty that doesnt meet all of the necessary conditions for a full warranty
service contract/extended warranty
for an initital fee, seller agrees to repair the merchandise, either free of charge or for a set charge, for a period beyond initial warranty
monroney sticker price
legally required price info applied to the windows of all new cars
base price
price of car w/o optional features but includes standard equipment and factory warranty
dealer sticker price
monroney sticker price plus dealer add ons
invoice price
price the manufacturer charges the retailer for the car
credit life insurance
pays off remaining loan balance upon owners death
cost of ownership
fixed costs that dont vary with usage
certificate of title
legal evidence of your ownership of a motor vehicle
certificate of registration
document indicating that car is properly registered with state, motor vehicle dept.
depreciation
reduction in market value of motor vehicle
runzheimer
estimates depreciation and finance make up more than 50% of car costs
cost of operation
variable costs that are directly related to usuage
sunk cost
historical cost that can be changed
marginal cost
additional or incremental cost that will be incurred
closed end lease
costs determined at time you lease the car and generally not responsible for value of car and end of lease
open end lease
total cost of lease is unknown until estimated resale value of car is determined
balloon payment
larger payment at end of loan
gross capitalized cost
cost of a car and other items included in the leasing contract
adjusted capitalized cost
GCC- up front payments
capitalized cost reduction
up front payments including cash, trade-in and rebates
residual value
cars market value at termination of lease
secret warranty/policy adjustment
understanding between manufacturers and retailers that certain defects will be repaired at no cost only when confronted with strong consumer complaints
mediation
parties to dispute attempt to reach their own agreement
arbitration
process for settling disputes with third party mediation and a binding/nonbinding remedy