Life is full of choices, but the main thing is to carefully think about the choices we make because most of them affect our future. The choice of buying a car is a huge decision that requires a person to sit down and lay out all the advantages and disadvantages before making the final decision; this is because such a huge decision might affect our lifestyles in the future. The decision-making process consists of several variables that a person ought to consider before making a final decision to avoid stresses that come with making bad money choices (Silvia, 2011).
Each decision-making process has several variables that a person needs to consider before making a purchase. The first is the need for the item, the second is if I can afford, are there options to make it easier for me to buy the car and how do they affect my monthly earnings or how will the repayment process affect me in general. The decision to purchase the Nissan Rogue was because of the small interest rate they gave at the start of the year due to the fact newer models were being introduced in the market. The Nissan Rogue is an SUV, and it falls in the category as the Mazda cx-5, Ford Escape, Honda CRV, Toyota Rav4 and the GMC terrain. However looking at all the other models the Nissan Rogue has an excellent review which made me choose it. During the decision-making process, I had to consider several details including the fuel efficiency, price, durability and safety (Mankiw, 2007).
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Economic Choice
The decision to buy a car is usually determined by the finance available or if it is possible to get loan financing to purchase the vehicle. The interest rate is a factor to consider when determining the monthly payments for the car depending on the loan amount and the price. My loan interest was 1.99% the following calculation gives the estimate of the monthly payments on the car if I pay it within three years (National, C. E. E, 1997).
Loan term (years):
3 years
Interest rate:
1.99%
Loan amount:
$31,250.00
Total monthly payment:
$894.94
The monthly payments would be just an estimate if the whole loan amount were from a financier. Purchasing a new car is very costly especially for the new add- on's, the warranties, and insurance. The decision to buy a new was because I commute to work over long distances; therefore, a car will be very convenient; however, I was torn between the purchase of a used or a new car and I opted for a new car. This decision was prompted by the fact that the interest rates on used cars are usually higher than for a new car, the reason being the used car is already decreasing in value. Therefore the car dealer will want to gain something from the payment. The primary cause of these facts is that a new car has a longer term of payment as compared to used cars; therefore the lenders will give more time to repay the loan when I buy a new car compared to a used model (Keynes, 2007).
I opted to buy a new car considering it will give me more value for my money because it will go for a while before requiring repairs, this will give me more ample time to repay the loan. I am a Payroll Specialist at ADP, but even with the current layoffs my job is more secure therefore I am not worried about buying a new car because the monthly payments on the loan will not affect my monthly earning in a major way. Though the country is in the recession the advantages with the motor efficiency and loan repayment methods, and job security drove me to make the decision to buy the vehicle.
The insurance and the monthly payments always consider the length of the repayment period. This example means that taking more time to pay will increase the loan interest rates, on the other hand, a shorter term loan will have fewer interest rates, but it might put stress on my budget. I thoroughly considered the factors before buying the car. The considerations for a loan because of several factors like the credit score; I have a great credit score, so I was not worried about getting the loan.
Economic Decision Making
The Nissan Rogue is a very fuel efficient car as compared to the other models; the rogue has a four engine cylinder with a 2.5-liter capacity. Its fuels consumption is on average 9.2 liters in every 100kms when a person is using the car in the city and 7.1 liters when on a highway this is when the vehicle is engaged to the FWD. The rogue has a gasoline consumption of 9.5 liters over a distance of 100 kilometers when using with the city and 7.4 liters for every 100kilimeters over highways when the vehicle is using the four wheel drive. Lately, there has been a push for car manufacturers to produce fuel efficient cars that are also environmentally friendly (National Research Council (U.S.), 1992).
The Nissan Rogue has taken the issues of fluctuating gas prices; therefore, the user can quickly switch to the fuel efficient mode instead of opting for a car switch. Right now the gas prices are going up; therefore, the best way is to buy an all-time fuel-efficient car like the Nissan Rogue. The vehicle has an “eco mode” switch pre-installed in the car this gives the customer the alternative to change from one mode to the other. In eco mode, the vehicle automatically regulates the fuel utilization rate. The Nissan also has the continuous variable transmission which capitalizes on fuel efficiency using its perfect transition when the user is shifting from one mode to the other. This process means the car functioning remains the same that is there is a little probability of a change shock during the manual transmissions and the conventional transmissions. The Nissan Rogue is also environmentally friendly meaning it has the real drive, only in the rogue and it identifies the car as a vehicle that is environmentally friendly because it has lower emissions compared to the other vehicles in its class. Most vehicles use the premium gas, and when the fuel prices change many of them opt for the regular gasoline, however, the Nissan Rogue uses the unleaded gas which is cheap even when the fuel prices are very high (National Research Council (U.S.). 1992).
Circular flow model of economic activity
The federal government also offers trades offs through the consumer assistance recycle and save a program that gives the people a chance to trade in their old vehicles them help purchase new models. However, the government assisted method did not work for me that is why I opted to buy the car on my own.
The dynamic market creates a continuous flow of goods and services; the circular movement of goods indicates the movement of property from one entity to another without the involvement of government. In this case, the goods are vehicles from the Nissan Motor company; then they move to the dealership shops where I as the customers purchase them and take them to my household (Silvia, 2011). When a consumer buys a vehicle to help them in undertaking any task be it business or just personal transportation, it contributes to the circular flow of the economy, because the money from my purchase keeps the company running and their product keeps my life running.
Conclusion
The economy is a significant influence on how people make decisions, especially when making major purchases like buying a car. It is not just going to the showroom and picking out a car; a person has to consider the economic dynamic plus other variables when making the purchase because they all contribute to the success of the financing process and even retaining the item and making sure the process is not stressful on the person making a purchase. As they grow from the acquisition they, also contribute to the growth of the economy.
References
Keynes, J. M. (2007). General Theory of Employment, Interest and Money . New Delhi: Atlantic Publishers & DistributorsPvt Ltd.
Mankiw, N. G. (2007). Principles of economics . Mason, Ohio [u.a.: Thomson/South-Western.
National Research Council (U.S.). (1992). Automotive fuel economy: How far should we go?. Washington: National Academy Press.
National, C. E. E. (1997). VoluntaryNational content standards in economic . New York: The National Council on Economic Education.
Silvia, J. (2011). Dynamic economic decision making: Strategies for financial risk, capital markets, and monetary policy. (Dynamic financial decision making.) Hoboken, N.J: Wiley.
