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Online Car Buying and Time Value of Money

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Can you please help me with the following scenario? Thank you!

With a click of the mouse, Mackenzie enters the auto "showroom." In the past few months she had realized that the repair costs for her 11-year-old car were accelerating. She thought it was time to start shopping for a new car online and decided to start her Internet search for a vehicle by looking at a small and mid-sized SUV's. Her friend suggested that Mackenzie research more than one type of vehicle. They reminded her that comparable models were available from various auto manufacturers.
In her online car buying process, Mackenzie next did a price comparison. She obtained more than one price quote by using various online sources. She then prepared an overview of her online car buying experiences.
Mackenzie's next step was to make her final decision. After selecting what she planned to buy, she finalized the purchase online and decided to take delivery at a local dealer.
In recent years, less than 5 percent of car buyers have actually purchased vehicles over the Internet. That number is increasing; however, car buying experts strongly recommend that you make a personal examination of the vehicle before taking delivery.

1. Based on Mackenzie's experience, what benefits and drawbacks are associated with online car buying?
2. What additional actions might Mackenzie consider before buying a motor vehicle?
3. What do you consider to be the benefits and drawbacks of shopping online for motor vehicles and other items?

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Solution Preview

1. Based on Mackenzie's experience, what benefits and drawbacks are associated with online car buying?
Browsing the internet and comparing prices is a very good starting point. For example, in Canada, people generally start this process by visiting www.canadianblackbook.com. Mackenzie really took the right step.
No pressuring sales teams - Most of the time, car sales people earn a discount when they are able to sell a car to a customer. Mackenzie's decision to compare various prices online gives her the option of buying a car without haggling and dealing with pressure from sales people.
Saving Time: In terms of saving time, Mackenzie saves a lot of time when compared to driving around town and dealing with traffic and negotiation times with sales people. Also, there is 24/7 access and more flexibility in customization of the car.
Lastly, Mackenzie could save some money - online dealerships have multiple offers and different varieties across ...

Solution Summary

The advantages and disadvantages of buying a car online considering the time value of money.