Wise+Consumer+Project


 * Economics: Wise Consumer Project**

=This project is due **February 23, 2012** at the end of the period.=

This project will help you learn how to be a wise consumer. You will use the three buying principles—researching the product, using advertising and comparison shopping—to make an informed choice about the purchase of a product.

For this assignment you will apply the three principles of buying to purchase an automobile. You will also write a memorandum about how you made the choice you did and describing your research, use of advertising and comparison shopping.

You must buy a new car, or a used car that is a 2009 or newer. You have $18,000 to spend, $15,000 of which will be borrowed. That means you will have a monthly car payment of $381. You have $300 dollars per month for insurance and gas. If you come in under budget on your car, you can spend the difference on insurance or gas.

Here’s how your research will work:


 * 1) **Research**: Using the Internet, //Consumer Reports//, or other publications rating new vehicles, find out about two different cars you might want to buy. You may also want to get other people’s opinions. Look for information regarding durability, reliability, gas mileage, warranties, drivability, resale value and standard equipment and options. Also, get information from an insurance company about the cost of full insurance coverage (comprehensive, collision, liability and uninsured motorist) for both automobiles you are interested in. You may be able to get insurance information from the Internet.
 * 2) **Use Advertising**: Find advertisements about your vehicles. Look in magazines, the newspaper, etc. If you can’t find print ads, find TV ads. Are the advertisements informative or competitive? Are the ads helpful in making a decision on which car to purchase? Why or why not?
 * 3) **Comparison Shopping**: Get prices off the Internet by going to dealer websites. You need the prices for each vehicle you are investigating, so you’ll have to research two dealers. Alternatively, many carmakers have websites on which you can build the car that you want with the features that you want. Play around with them.
 * 4) **Making the Choice**: Decide which car you want to buy, based on the information you have gotten. Then write me a memorandum about the vehicles you have researched. Follow the guidelines below when writing your memorandum.


 * Possible URLs to start your research:**

Information and prices: various car company websites, or www.edmunds.com, www.kbb.com, www.autotrader.com, etc.

Insurance quotes: www.progressive.com