Question

In: Finance

Jamie Lee is considering a used vehicle, but cannot decide where to begin her search. Using...

  1. Jamie Lee is considering a used vehicle, but cannot decide where to begin her search. Using Your Personal Financial Plan Sheets #19, name the sources available to Jamie Lee for a used car purchase.

What are the advantages and disadvantages of each? To keep things consistent, let's use the following:

  • New Car Dealer
  • Used-Carl Dealer
  • Private-Party Sale (through individuals)
  • Auctions
  • Used-Car Superstores

Solutions

Expert Solution

New Car Dealer

Advantages

  • will provide the latest available cars
  • may provide old stock car (unused) at a lower rate

Disadvantages

  • Expensive source - As he will be selling unused cars
  • Probability of availability of Old car is low

Used Car Dealer

Advantages

  • Deals in Used car, hence car will be easily available.
  • May provide Installment payments on the purchase of old car from him.
  • After sale free services are also offered by Dealers.

Disadvantages

  • The dealer may charge more than reasonable amount.
  • he may hide the defects of the car by some modifications, as it is his business to sell the used cars.
  • he may not provide the true details of the car to the customer.

Private - Party Sales (through Individuals)

Advantages

  • There is a one to one contract between the previous owner and the buyer
  • Negotiation is possible
  • The previous owner describes the true condition of his vehicle
  • chances of deception are low

Disadvantages

  • It is possible that the individual selling the car may be hiding some facts about the defects in the car.
  • He may be not traceable after the sale took place.
  • He may deny the defects detected after the sale took place.

Auctions

Advantages

  • Rarely found cars may be available through Auctions
  • Cars put on auctions are properly checked , thus trustable

Disadvantages

  • Auctions involve bidding which increases the price of cars
  • Commission and other such related expenses will be incurred, thus a costly source of purchasing a Car.

Used - Car Superstores

​​​​​​​ Advantages

  • vast choices available for the buyer.
  • after sale services offered
  • many offers are also offered to attract customers

Disadvantages

  • Car may not be defect free
  • Price charged will be more than the true value of the car

jeff jeffy answered 1 year ago
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