1. Identify seven sources of vehicle purchasing information and the type of information available from each source.
2. From all the information available, what specific information about the different makes and models is the most relevant to Samuel and Grace in making their purchasing decision?
3. What is the highest price they can pay on the new vehicle if they can afford a down payment of $4,000? Assume they finance their purchase for 48 months at 5.5 percent.
4. According to the National Automotive Dealer Association (NADA) guide found at www.nadaguides.com, are the Paganellis better off to sell their pickup or use it as a trade-in? Consider both price and time in your answer.
5. If they decide to lease, what key factors are important in a good lease?
6. Explain to Grace and Samuel the guidelines of leasing and whether or not it is a smart financial move for them to consider. Would they be better off with a closed-end or an open-end lease? From a purely financial perspective, would you recommend leasing or financing? Complete Worksheet 9 to substantiate your recommendation.
7. If Samuel purchases a "lemon," what alternatives are available to prevent the truck from "short-circuiting" his business?
Samuel and Grace Paganelli want to replace their 1996 pickup, which Samuel drives for work. They already own two vehicles, but they need to replace Samuel's truck because it has nearly 225,000 miles on the odometer. The replacement must be a vehicle that fits his job as a self-employed electrician.