Processes of Buying the Car - Assignment Example

Car buyer’s dilemma Processes in the buying of the car entail several processes carried out by the buyer and the one that sells it. The first step in buying is the consideration of the cost at which the car is sold. The payment should be considered such that the monthly car payment to the seller is not much. The seller can come up with different Honda Accords. The next step in buying of the car is the selection of the preference in terms of color and other factors. The prices and reviews of the car make the next step where there is a need to negotiate the price at which the car can be bought.

After the negotiation, checking the car's history report is important. The car that is to be bought should be that with a positive report (Sharif, 23). Test driving the car before the payments are much more important since it makes the buyer satisfied with the elements and the features that can be got from the test. Inspection of the car will make the next step where the car undergoes several checks to make sure it is well. Negotiation of the deal becomes the next step after the inspection.

This makes the buyer able to insist on a price that is lower than the one stated by the seller (Sharif, 203). The last step will be closing the deal after the seller agrees to sell the car between the limits of 15,000 to 25,000 dollars with the least price possible. The capital budget for buying the car Budgeting for the car entails the inclusion of the operational budget items such as the maintenance costs and the buying of fuel for the car. The budget also entails the decision on the payment of the car whether to do it monthly or annually when the car is bought in installments.

The budget should also be addressed and consider the parts of the car that are not paid for or those that need continuous change (Sharif, 57). The budget addresses the objective of the car which is mainly to use it for work during summer. The budget will also consider the flow of cash to be used in the maintenance of the car. The budgeting also considers the alternatives that are available apart from the purchase of the car for example the use of public means to go to work. The budget for the car considers the different related items that are needed in the use of the car and the methods to be used in the payment (Sharif, 87).

The budgeting also entails the creation of a spreadsheet after the collection of several data about the different cars and their costs. Activity-based management attributes The buying and selling of the car should entail integrity between the buyer and the seller. This will bring the negotiation between the two to come to a good price in which the two parties will benefit from the purchase (Sharif, 95). The buying and selling should also create a positive environment and also a culture of respect for one another.

The culture of effective communication between the two teams will also bring them to an agreement. Attitude also is an important factor in the negotiation and both teams should have positive attitudes towards each other. The implication of target costing used in the firms involves the reduction of costs. The reduction of the costs results in the reduction of price. This enables fairness in the competition since the demand for the reduced prices will be high as compared to when the costs were not reduced.

Target costing enables the making of profit in the competitive market (Sharif, 102). When negotiating the price of the car, the seller should reduce the costs such that they are able to both benefit and also convince the buyer.