 Personal finance, PowerPoint, Presentation, large purchase process of something like a car, post-purchase steps. Get ready to get financially fit by practicing personal finance. Remember that just about all financial decisions we can basically categorize into the short-term types of decisions and the long-term types of decisions, long-term being those kinds of decisions that usually have a larger dollar amount that are gonna impact multiple periods into the future, the short-term types of decisions we can usually hone down our habits using a trial and error method, a tinkering type of method so that we can get our habits to the point that we're making most of those short-term decisions just based on habit, less of the formal thought process and the purchasing process. When we're looking at the long-term decisions, however, we can't use that same tinkering type of method and logic, but instead would most likely want a more formal kind of process to put in place using the adage of measure twice, cut once because the one decision that we're going to make possibly has a bigger impact for multiple periods into the future and we would like to make that one decision that doesn't happen quite as often but has a disproportional impact, a good decision so hopefully it will have us a better impact into the future. We broke down the process into the four categories we've been talking about. Number one, the pre-shopping activities. Two, evaluating alternatives. Three, determining the purchase price and we're focused this time on number four, the post-purchase activities. So clearly when we're making the purchase we're going to want to take into consideration what we're going to do after the purchase process which is going to include added costs such as maintenance on something like a car and then after we make the purchase we want to make sure that we're following through with the post-purchase activities in order to facilitate our plan or long-term plan for the purchasing process. So maintenance and ownership costs are associated with most major purchases. So whenever we make a major purchase, clearly a car we're going to have maintenance that's going to happen going forward. We want to take that into consideration. Appliances and things like that may have maintenance as involved with them as well which we want to make sure that we're taking into consideration if we're getting more complex type of machinery that needs more complex kind of maintenance are we capable and willing to pay and do that more complex maintenance. Proper operational yields improve performance and fewer repairs. So clearly if we take care of whatever we have like a car then it'll typically last longer investigate, evaluate and negotiate a variety of servicing options. So if we're servicing something if it's a car clearly then how are we going to do the servicing? Are we going to go back to the dealership? Are we going to be taking it to our own mechanic? Can we do it ourselves? So we want to be thinking about those options that we're going to be putting into place for the servicing. If it's something like a piece of machinery or if it's going to be an appliance what kind of servicing options are available for those kinds of needs as well. Complain if not satisfied with a purchase. So if you do make a large purchase that's going to have an impact for multiple periods into the future and you're saying, hey there's something wrong here then it's typically going to be more and more worthwhile to go back and say, hey look this isn't living up to the expectations for the larger types of items. For smaller types of items, not as big a deal because again, what do you do in the future? You just don't purchase from the same person anymore because it's a smaller term purchase but if you're talking about a larger purchase then it becomes more and more relevant that if they're not meeting the expectations that you tell them you're not meeting the expectation. So lemon laws are instated in all 50 states and the District of Columbia. These are laws designed basically to help out the consumers. Now obviously you also have all these other tools online which I think ultimately I'd like to be and I think they ultimately will be more effective than just simply laws saying that dealerships have to do this or that and those are going to be people's giving reviews and so on and so forth to show the quality and the customer service of different areas. So I think those tools are great tools for the purchasing process although they can be abused and whatnot too but those can be a good tool. So fixed costs, remember when you're talking about something like a car or a long-term asset you've got the fixed, you could break the costs into fixed costs and variable costs. You also might want to break them out into cash costs and like a cruel type of costs. So a fixed cost for example, depreciation you usually calculate depreciation as the allocation of the cost of the car over time because you're getting the use of the car over time and that's going to be an accounting method for an accrual method. It's not a cash related item however, although it's something that we typically think about as a fixed cost because we're allocating the expense over a certain timeframe. If you're writing the car off as an expense for taxes, a deduction which would be a good thing then you can try to think about what's your tax implication and that would have a cash flow implication for it. So interest on the loan. So the interest on the loan or the loan payments at least will typically be a fixed cost that will be paid. The insurance is typically going to be a fixed type of cost meaning no matter how much you drive the car you can have to fix cost of insurance so you can kind of calculate that and predict what's going to happen with it going forward pretty easily. License, registration and taxes. These are also kind of fixed costs and this concept between fixed costs and variable costs is a really useful concept when we're trying to think about how much a cost something is going to be going forward. If we already made the purchase of the car in this case we got the fixed costs here and then we also have the costs that are still going to be variable depending on the usage of the car. This is a common term that anything that you're budgeting for in a business kind of situation you might do a similar thing and think about your expenses that are fixed and the variable that are going to change possibly with relation to something like sales. So you might say that rent on something it's going to stay the same but a lot of the other expenses you might expect them to go up in a proportion to the sales for example. If you can determine that we'll work some problems based on the fixed and variable costs with relation to a car then that helps you to make projections into the future a lot more easily. So things that are variable cause gas and oil so even if you purchase the car you're still going to have costs clearly with regards to gas and oil and those costs will vary with regards to how much you use the car. Increase in mileage will typically increase in costs for gas and oil. So when you're budgeting you can break your costs between variable and fixed to help you get a more accurate cost. Tires will have that variable nature to them and the maintenance and repairs will have a variable nature. Parking tools for example may have a variable nature as well. Again, we'll go through a practice problem so you can see how that can kind of practically apply out. Motive vehicle maintenance is something that clearly you're gonna have to take into consideration going forward. Keep good expense records. We wanna make sure that we have the records of the expenses so that for example if you're going from dealership to dealership then they don't know how often you've done the service or if you're going from repair shop to repair shop. If you're going to the same dealership one of the benefits of going to a dealership is that they have the records of the maintenance in the same area. That's pretty nice but it can be more expensive sometimes possibly to go to the same dealership. If you're going to different places to get like an oil change or something like that you gotta at least determine when was the last time you got an oil change, right? And it becomes more difficult to determine things like tire rotation and whatnot if you're going from location to location. So you wanna keep the records of that. At least follow the maintenance schedule in the manual so clearly you got the manual, you should follow the maintenance schedule in the manual. It becomes more difficult like I say if you don't have the records and if you're not going to the same area for that. So more frequent intervals may minimize major repairs. So just like anything else if you check it out with the preventative maintenance it might save in the long run. Vehicle servicing options, car dealers. So you might go to the car dealership for the servicing options. Sometimes it might be more expensive or maybe not but it can be nice to have all the information at that one place. You also wanna consider the garages that you're going to. Do they have the capacity to do all the maintenance that you need or do you have to go to different places to say do an oil change versus a tire rotation or something like that which again makes it more difficult because now you've got to determine what's done what's been done and what hasn't been done from multiple different places and keep track of the mileage. So service stations, independent auto repair shops. You got the mass merchandise retailers like Sears and Walmart specialty shops such as Oil Lube, Muffler, Transmission and Tire shops. So car maintenance obviously you got a couple things that you gotta do. You got the oil changes, check fluids like brake, power steering and transmission. Anytime you go into a shop these are the things that you would expect they possibly are gonna comment on. And then tune up for things like new spark plugs, fuel filters and air filters, check and clean battery cables and terminals, check spark plug wires, flash radiator and service transmission, keep lights, turn signals and horn in good working order, check muffler and exhaust pipes, check tires for wear and rotate tires at regular intervals, check the brakes when checking oil and the attempt. So you could have sometimes when if you're going to a place that you don't have confidence in clearly if you're going to find to deal with a maintenance area you'd like to go to someone you want to determine who you're going to that you trust. So you might say the dealership could be a good place to start because you might trust the dealership a bit more than other locations and it's easier to track the records. You might talk to other people to determine where they think the best place to go is to find a mechanic that you can trust. If you don't trust the mechanic some things that you might look for that they might try to scam you on or something like that. For example, when checking the oil the attendant puts the dipstick partway down to show you you need oil. So when they're putting the dipstick into the oil, then if you don't put the dipstick all the way down it's going to look like you don't have enough oil, right? So you might want, so I'll put the dipstick in to check it out, right? You might want to just double check that. Obviously if an attendant was to do something like that you probably wouldn't want to do business with that area. So an attendant cuts a fan belt or punctures a hose so clearly if they were actually to damage the vehicle in order to repair the vehicle this wouldn't be good. And notice a lot of this stuff again I think it's going down to some degree for a lot of shops or at least long-term shops because of the online tools, right? If people are caught doing this kind of thing over an extended period of time you're going to get these reviews online which actually lowers this I think a bit more than possibly in the past. Liquid is put on the battery to pretend it is leaking requiring a new one. So putting grease by a shock absorber to pretend you need new one. So these are things you got to be careful of. I would say that to be careful of that first off you want to do some research in terms of which shops you want to do business with. So resolve complaints. Step number one, if you got the complaints calm rational goal oriented gather then emotional oriented approach. So when you're complaining about something if there's an issue with something you don't want to have an emotional complaint about it and just get upset. Although that's kind of the tendency that clearly is you can understand how that response would happen. But what you would like to do is say what do I want as a reaction to this? What do I want them to do for me in relation to this complaint and then take a rational approach so that you can gear your argument to what you would like for the accommodation of the complaints. In other words, whatever has been done that is wrong, whatever service was not up to par has already been done. And so what you want to do now is say what would be accommodating to me? What do I want them to do at this point in time and then orient your complaint in alignment with that instead of just basically not knowing what you want from them at this point in time and just being upset and because you're not gonna be there's nothing they can do at that point. You're not gonna be able to solve anything in that case. So two, check for content option on the company website or use an email or possibly a letter when appropriate. So sometimes it can actually be actually hard to contact people these days, but they should have the information on the website and at least have an email or some capacity to contact them. Number three, the Better Business Bureau, the BBB provides pre-purchase information. You can file a complaint with them so you can talk to the Better Bureau. You can, and that's a way you can have some leverage as a customer. You also have leverage as a customer by all these online review tools and whatnot that could give you some leverage when negotiating if you feel that you've been wronged in a particular situation. You also just wanna consider how important the situation is to you as well, of course. If you're talking about a maintenance kind of situation where it's a short-term decision, maybe you can just change where you're doing business when you're talking about those short-term kind of things. If it's a long-term type of decision like a big purchase that was made, then of course that's gonna have a larger impact. So you wanna gauge your reaction, what action you're gonna be taking to how large the thing is of an influence on you. So arbitration, decision is binding, State Consumer Protection Office or agency number four, you can possibly then take legal action. Remember that taking legal action is probably something that you always want to have available to you. We in the U.S. we always wanna be able to sue someone if we need to sue someone, right? But it's probably not the first step you want to be taking. It's not the first place you wanna go because the time and effort of suing someone, even if you win, is a cumbersome process to say the least. So you would typically like to resolve the issue by going through the series of steps. I would first think of how much impact does this particular thing have on me and then go through what do I want in a response to this? What would I like them to do to remedy the situation and then go through the leverage steps that you might have through the negotiation, including the Better Business Bureau, the online sites and so on, that you can give comments and whatnot with and then clearly legal action is something that's also always available to you as well but probably not the first go to.