In: Finance
Distinguish between needs and wants, and explain why
it may be better to act as if no needs exist.
Explain why lease payments for a new vehicle are lower
than loan payments for the same vehicle.
How do you choose between a low interest rate and a
rebate?
What three aspects of a vehicle purchase should be
negotiated? In what order?
Distinguish between mediation and
arbitration.
Needs are the basic requirement needed for the survival and sustinance of the human beings , while wants are defined as physiological desire to obtain something.
It has been said that fulfillment of one level of needs urges the individual to towards higher level of needs. As such the satisfying power of the individual keeps on rising and this may prove to be detrimental if the subsequent level of needs are not fulfilled. Hence it is better to act as if no need exists as it would help in self satisfaction within the boundaries of achievement of a person.
PART II
Lease payment vs Loan payment
In leasing a specified amount of charge is levied by the lessor for a particular asset to be leased. The terms of the lease is fixed and the ownership of the asset still remains with the lessor of the asset. As such only the usage rights are transferred to the user or client and on the end of the lease period the asset reverts back to its original owner.
But in case of loan payment , the asset or the vehicle is owned by the customer from the very first day the loan contact is undertaken while the legal title may be transferred at the beginning or at the end of the payment period.
Hence for the same asset (vehicle) lease payments are lower than the installment payment for the above mentioned reasons.