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Car Dealership #1:

J. Astaphans and Co. (1970) Ltd.

Vehicle chosen:

Mitsubishi L200 4WD D/Cab Pick-Up

Methods of purchase:

Method #1: Cash Purchase

Method #2: Hire Purchase

Cost of different methods:

Method #1: Using this method would cost $106,000.00 in cash. The selected vehicle is given to the customer upon the payment of the full sum.

Method #2: With this method, the customer pays a deposit of 25% of the regular price (which in this case, 25% of $106,000.00 is $26, 500.00) then may enjoy the use of the vehicle. However, the financed amount ($79 500.00) still has to be paid with an interest of 11% per year over a duration of five years. This would amount to the interest being $8745.00(totaling to $43, 725.00 interest for the entire five years). By adding the interest to the financed amount, the financed total is $123, 225.00. This would have to be paid over the period of five years.

[Information collected from interview with a customer service representative from Astaphans’ car dealership located in Canefield’]

Car Dealership #2:

Auto Trade Ltd.

Vehicle Chosen:

Nissan Frontier 4WD D/Cab Pick-Up

Methods of Purhcase:



Cost of Different Methods:

Method #1: Using this method, the sum of $95,000.00 is to be paid, upon which the customer receives the vehicle upon payment of the full sum.

Method #2: This method of purchase requires a down payment of $23,000.00 (25% of $95,000.00), then the customer is free to use the selected vehicle. Afterward, a monthly sum of $1,752.08 is to be paid over a duration of 5 years. This is due to the interest rate of 9% (per year) $72, 500.00 (which is $6, 525.00). Paid each year for the period of 5 years, this would total to a sum of $32, 625.00, and when added to the financed amount of $72,500, the financed total becomes $105, 125.00. The monthly installment of $1,752.00 is to be paid each month for the next five years. It is paid until the entire five-year period is over (along with the financed amount of $72, 500.00).

[Information gathered from interview with customer service representative from Auto Trade Car Dealership in Canefield]

Nissan Frontier 4WD D/Cab Pick-Up

Engine size: 3.2 L Diesel

5 speed manual transmission

25 70 16 tyres

3 year/100,000 warranty

Mitsubishi L200 4WD D/Cab Pick-Up

Engine size: 1.6 L diesel

5 speed manual transmission

215/65R 16 tyres

5 year/125,000 mile warranty

In terms of the best method of purchasing the selected vehicle within each company, the best method of purchasing each vehicle is the “cash purchase” method.

In reference to the best method of purchasing the selected vehicle within each company, the best method is the one of cash purchase. It is the cheapest option, therefore, in my opinion, it is the better method of buying in purchasing each respective vehicle.

In reference to the Mitsubishi L200 sold by Astaphans, both methods of purchase may be as equally good as the other depending on the customer. In the case of the “Cash Purchase” option, the customer has to pay immediately and in cash, but a customer with the money ready would use that option as it is cheaper. However, for someone who may not have a large sum of money at the time of purchase due to an unstated reason, they might probably benefit for having to pay over the 5- year period.

The same applies for the Nissan Frontier sold by Auto-Trade. Both methods of purchasing the vehicle may be beneficial towards different customers. But as to money-wise, paying the full cash amount is the better deal, as it is 14% and 9% cheaper to pay with cash rather than using the “hire purchase” method to buy the Mitsubishi L200 and the Nissan Frontier respectively.

Pertaining as to which is the better buy of the two vehicles, I’d pick the Nissan Frontier. Although the Mitsubishi L200’s warranty is 5 years as opposed to the Nissan’s 3 years, they have similar features; they are both “Pick-Up” trucks, are of the double-cab type, and have the 4-Wheel Drive ability. Since they are so alike, the Nissan Frontier would be the better deal as it is cheaper (in both methods of purchasing each vehicle).

Company #1:

Courts Ltd.

Stove Chosen:

Indurama 24” Cooker

Methods of purchase:



Cost of different methods

Method #1: With this method, the cash amount of $2399.00 is paid and the stove is given to the customer. The cost is reduced from the regular price of $2749.00 to $2399.00 if the amount is paid (a discount of $350.00).

Method #2: Using the hire purchase method, the options of paying are varied. You may choose to pay over a period of 1 year, 2 years, or 3 years. An amount of $119.00 (due to manufacturing faults) is added to the regular price of $2749.00 along with a sum of $25.00 (documentation fees) adding up to $2893.00. If you choose to pay the amount over a period of one year, adding the 18% interest rate would result in paying $283.66 monthly for one year. With the 2-year plan, the interest rate is increased to 38%, therefore bringing the monthly installment to $165.50, over a period of 2 years. Choosing the 3-year payment option, the installment increases to $124.60 over a duration of 3 years. Any of the 3 different options can be chosen to pay for the stove (using the hire purchase method that is).

[Information gathered from interview with customer service representative from Courts in Roseau]

Company #2:

J. Astaphans and Co. (1970) Ltd.

Stove Chosen:


Methods of purchase



Cost of each purchase:

Method #1: The customer pays for the stove with cash, at a discounted price of $2599.00. When paid in cash, the customer saves $350.00, from the regular price of $2949.00

Method #2: The customer is given 24 months to pay for the stove at the regular price of $2949.00. The customer can choose whether to pay the installments every month (the amount would be $245.75 monthly) or every week (the weekly installment would be $57.00). The option of paying either by monthly or weekly installments is up to the customer (the customer receives the stove upon their first installment).

[Information gathered from interview with customer service representative at Astaphans in Roseau]


Electronic Ignition

Broiler and Rotisserie

Security

Thermostat


Electronic Ignition

Broiler and Rotisserie

Security

Thermostat

The best method of buying the Indurama 24” Cooker stove sold by Courts, is by the “Cash Purchase” method, since it is cheaper. But the hire purchase plan is also a good method as it gives the customer an option to pay small installments (monthly) over a period of 1, 2, or 3 years. This may suit someone without the full cash amount required to purchase the selected stove using the cash purchase method.

As to the Indurama 32” Cooker stove sold by Astaphans, the cash purchase method is the cheaper method of buying the stove, so in my opinion, it is the best option. However, the hire purchase option of purchasing the stove offers a variation of payment terms which would suit someone without the large sum of cash ready.

The better buy is the Indurama 32” Cooker stove sold by Astaphans. Since both stoves have similar features, I’d prefer to spend an extra $200 buying it as it is the larger of the two stoves and has 6 burners, as compared to the other one’s 4 burners.

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