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Chapter 28 Test

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 

Which of the following statements about financing a car is true?
a.
The longer the term of the loan, the smaller the amount of the monthly payment.
b.
The longer the term of the loan, the smaller the total amount to be paid.
c.
The greater the down payment, the larger the monthly payments.
d.
The shorter the term of the loan, the smaller the monthly payments.
 

 2. 

Federal law requires cars dealers to
a.
provide a pamphlet to consumers on safety aspects of all new cars.
b.
place a large sticker—a Buyer’s Guide—on every used car for sale.
c.
provide consumers with the costs and terms of a vehicle lease.
d.
all of the above
 

 3. 

The price of a new vehicle
a.
is fixed at the sticker price.
b.
is discounted on the basis of time of year, negotiating ability of the buyer, and other factors.
c.
remains constant throughout the year.
d.
none of the above
 

 4. 

The Buyer’s Guide sticker that is required on the window of every used vehicle sold by a dealer must include which of the following?
a.
disclosure of the lowest price that has been paid by a buyer in that state
b.
the name of the mechanic who inspected the vehicle
c.
advice that the buyer should get all promises in writing
d.
the name and contact information of the prior owner
 

 5. 

The Kelly Blue Book and Web site provide
a.
prices for used and new cars,quality reviews, and information on available financing.
b.
safety information on new and used cars.
c.
crash and rollover test comparisons of various cars, light trucks, vans, and SUVs.
d.
safety and reliability test results of various tires.
 

Completion
Complete each sentence or statement.
 
 
Complete each of the following statements with the appropriate choice below.  Some choices are not used.
“as is”
leasing
discount
maintenance
Federal Trade Commission
misuse
Kelly Blue Book
interest rates
 

 6. 

____________________ for car loans vary depending on whether the car is new or used.
 

 

 7. 

The size of a ____________________ depends on the time of year, the buyer’s negotiating ability, special sales, manufacturer’s bonuses, and rebates.
 

 

 8. 

If a sticker on a used car says that it is being sold ____________________, this means that there is no warranty.
 

 

 9. 

The ____________________ now requires used car dealers to place a large sticker—a Buyer’s Guide—in the window of every vehicle offered for sale.
 

 

 10. 

A warranty may become ineffective if you fail to perform proper ____________________ or you ____________________ the car.
 

 

Matching
 
 
Match each item with the correct statement below. Some items will not be used.
a.
insurance
e.
safety
b.
fuel economy
f.
quality
c.
leasing
g.
repossession
d.
price
h.
warranty
 

 11. 

the payment of a monthly fee to drive a car for a certain time period, without owning the car
 

 12. 

car financing company takes ownership of the car away from the buyer who has failed to make timely payments
 

 13. 

one of the major financial costs of having a car
 

 14. 

bumper-to-bumper type cover most auto repairs for 36,000 miles or 36 months, whichever comes first
 

 15. 

best guide for this is the Kelly Blue Book
 

Short Answer
 

 16. 

Identify at least one advantage and one disadvantage of leasing a car.
 
 
Vehicles Buyers Order

Purchaser: Leo Angel
Address: 555 Main St., Your Town, Your State Your Zip
Phone: 800-205-3353

chap28_files/i0230000.jpg
 

 17. 

What type of car is Leo Angel buying?
 

 18. 

What is the base price of the car that Leo Angel is buying? How much is the total cost of the car?
 

 19. 

What is Leo paying for over and above the purchase price of the car?
 

 20. 

How is Leo paying for the car?
 



 
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