John Rossini works for a Ford dealership. Alice Field is shopping for a Taurus. She would like the high-end model with leather seats, moon roof, and other amenities, but it is beyond her budget. Alice settles on a base model, trades in her current automobile, and asks for a 36-month loan for the balance. John works out some figures. He explains to Alice that by extending the loan term to 48 months, she can buy the more expensive model while keeping her payments the same as for the cheaper mode; on a 36-month term. How do dealer and consumer both benefit from this offer?

John Rossini works for a Ford dealership. Alice Field is shopping for a Taurus. She would like the high-end model with leather seats, moon roof, and other amenities, but it is beyond her budget. Alice settles on a base model, trades in her current automobile, and asks for a 36-month loan for the balance. John works out some figures. He explains to Alice that by extending the loan term to 48 months, she can buy the more expensive model while keeping her payments the same as for the cheaper mode; on a 36-month term. How do dealer and consumer both benefit from this offer?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter8: Vehicle And Other Major Purchases

Section: Chapter Questions

Problem 1FPC

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