Risk Paper #1 – New Vehicle Purchase Risk Assessment
Whenever considering a major purchase in life one must carefully consider the risks associated with making these purchase decisions. These decisions should be treated as projects in such a way that proper planning, analysis, risk assessment and contingency should all be aspects of the purchase process whether formal or informal. Purchasing a new vehicle, like so many other major purchases (likely the second largest purchase one may make in their lives behind purchasing a new home), is no exception. Several risks accompany these decisions, these risks rank from high probability – high risk to low probability – negligible ...view middle of the document...
Under almost all circumstances the needs of the buyer will be the first consideration and one of the highest priority risks. Several scenarios may dictate the specific needs of the individual and all buyers have different needs in regard to their vehicle purchase.
Risk 2 – Budget
Just like all other projects we experience, budget is a primary concern for almost all buyers when considering a new vehicle. For most buyers, budget will dictate which vehicles they consider. Some buyers may consider new versus used vehicles and will look to purchase the most vehicle they can get for their money. This may mean targeting vehicles that are slightly above their price range in hopes that they can negotiate down. Still other buyers may sacrifice budget to ensure they get a vehicle that meets all of their wants and needs.
Budget risks are most often associated with what a vehicle will cost a buyer in monthly payments; however total cost of ownership is an additional consideration. An analysis of total cost of ownership should include costs to insure, license and maintain the vehicle as well as fuel costs. A direct contributor to total cost of ownership is the warranty coverage offered on a vehicle.
Risk 3 – Warranty
Another major risk associated with purchasing a new vehicle is warranty coverage. Warranty coverage often weighs heavily on folks looking to purchase a new vehicle. Today’s vehicles are becoming increasingly more difficult to work on for the weekend mechanic so warranty coverage becomes a key risk requiring attention when considering a new vehicle purchase. Warranty may even tie into budget; some buyers may consider...