Trans World Assurance Blog

Go Further On A Tank Of Gas! (Updated) - Part 3 by Jeff Burch

Posted on Wed, Jan 25, 2012

PART 2 - Tips 5 thru 7

8. Maintenance and tune-ups: Regular maintenance as prescribed by the vehicle owner's manual will help your vehicle achieve its best fuel economy and improve mileage by up to 4%. Some overlooked Maintenance tips:

  • Use the correct oil: You can stretch your gas mileage by 1%-2% by using the thinnest viscosity grade of motor oil recommended by the car manufacturer. Example: Dumping 10W-30 motor oil in an engine that is designed to use 5W-30 can lessen your gas mileage by 1%-2%. In addition, use "Energy Conserving” motor oil containing friction-reducing additives.
  • Keep tires inflated and aligned: It's estimated that properly inflated tires can save the average car owner 3.3% with each tank of gas. Under-inflated tires can lower gas mileage by 0.3% for every 1 PSI drop in pressure of all four tires and wear out faster. When replacing your tires, replace them with the same make and model as the tires that were on your vehicle when it was new. In addition, poor alignment can cause tires to wear out quickly and force your engine to work harder. Align your tires, and save up to 10% or 20 cents per gallon.
  • Check spark plugs: Two worn-out spark plugs can cost 20% or more of your fuel economy
  • Check the oxygen filter: If your car has a faulty oxygen sensor it can cause you to lose up to 40% of fuel efficiency.
  • Check Air filter: Tests show replacing a clogged air filter on cars with fuel-injected, computer-controlled gasoline engines (cars made from early 1980s and upward) does not improve fuel economy, but it can improve acceleration time by around 6% to 11%. However, tests suggest that replacing a clogged air filter on older model cars with carbureted engines may improve fuel economy 2% to 6% under normal replacement conditions.
  • Change fuel filter: Clean fuel is essential for a long engine life. So replace your fuel filter once a year or no more than 30,000 miles. If the filter plugs up it can starve an engine of fuel and if it fails it can release debris into injectors, causing expensive repairs. Also, a restricted filter will stress the electric fuel pump, leading to early failure.
  • Check brakes: Gas mileage can be affected by brake drag. Brake drag occurs when the lining is in constant contact with the rotor or drum and gas mileage suffers (metal to metal). Repair ASAP, not to get the best gas mileage, but for your own safety.

9. Fill it up and other gas filling tips:

  • Don't top off: Over-filling the gas tank causes charcoal evaporation emissions canister to saturate. This part can cost $100 to replace. Stop fueling at first click of pump nozzle.
  • Fill up your gas tank in the morning on weekdays:

A. Gas stations tend to change their prices between 10 a.m. and noon, so head to the pump early in the morning if gas prices are on the rise. However, if prices are falling, go later in the day.

B. In addition, weekends and holidays often see slightly higher fuel prices, so if you can fill up mid-week, you may save more.

C. Since gas expands when heated and contracts when cooled fill up your tank before heat expands it (especially during the summer). Currently, there are several theories as to why filling up in the morning does or doesn't work. As for my own experience, when I fill up in the morning I get 25 extra (freeway) miles or more out of my tank. Will it work for you?  To find out, keep track of your mileage with a gas log book.

 Example: 

June 13 / Time filled: 7 am / 18 gal. / Miles: 368
June 23 / Time filled: 5 pm / 18 gal. / Miles: 326

  • Tighten the gas cap: To tighten, twist gas cap until it clicks three times. However, if you constantly smell gas in the vicinity  of the gas tank, you may need a new gas cap. If the cap is loose or defective, gas vapor will constantly leak out and you'll waste gas. Also, if the cap is faulty it can cause your oxygen sensor to read incorrectly and tell the engine management computer to adjust the fuel-air mix and you'll end up burning more gas than needed.
  • Fuel injected cars: Keep the gas tank at least full enough to supply fuel for the electric pump, which depends on a steady supply of fuel to lubricate its inner parts. Running your car low on fuel causes the pump to wear out, especially when cornering.
  • Stop fuel lines from freezing: Keep the gas tank 1/4 full and add isopropyl alcohol (commercial additive) to the gas tank when filling up before and during especially cold weather.
  • Car storage: Keep the gas tank full to limit the amount of water condensation in the gas tank when storing a vehicle. If car will be stored for more than a month, add a gas preservative.

10. Save gas while driving:

  • Avoid idling: A cold engine on today's modern cars should be warmed up by idling no more than 30-35 seconds. An idling engine eats up to 1/2 gallon of gas per hour and gets 0 mpg.
  • Drive 55 mph: All vehicles gas mileage decreases rapidly at speeds above 55 mph. Driving 65 instead of 75 mph reduces fuel cost 13%. Driving 55 would save 25%.
  • Drive efficiently and take your time getting there: Save up to 20% by driving the speed limit. Avoid aggressive driving, rapid acceleration, speeding and braking that can lower gas mileage by 33% on highway and by 5% driving in town. Other tips:

A. Listen to radio reports to use alternative routes to bypass traffic congestion
B. Drive in the highest gear possible without lugging the engine
C. Try to keep your speed constant. Use cruise control when on long stretches of road

  • When is the best time to use your AC? City driving uses up to 3 miles per gallon when using AC, but if you drive at a constant speed on a highway, AC use doesn’t matter.
  • Lighten your load: Don’t carry needless gear and luggage in your car. Gasoline mpg decreases 1%-2% for every extra 100 lbs of weight or conversely, save 3 cents per 100 lbs removed.
  • Don't be a drag! Keep car aerodynamic: Remove accessories, spoilers, etc., or repair body damage, crunched front fender, etc., that can alter a car's aerodynamics and reduce gas mileage by up to 8% (ask any race driver). In addition, refrain from driving with an open sunroof or windows at high speeds. Also, using a loaded roof rack creates wind resistance and can increase fuel consumption by up to 5% (better to pack items inside the car).

11. Other gas saving tips and ideas:

  • Use other forms of transportation: If you share a ride to work with a friend or co-worker(s), you will cost-effectively double your fuel economy. Check with your city or state to see if it has a "Rideshare" program. Other transportation options: Instead of driving use bus transits, bicycle, walk or catch a ride from friends, etc., to get to your destination of choice.
  • Fuel Economy for Cars: Fuel economy information for 2010 and 2011 cars, trucks, SUVs and vans is available to assist consumers in purchasing fuel efficient new vehicles. When purchasing, consider the most fuel efficient vehicle and save up to 50%. For more information, visit: www.fueleconomy.gov/feg/FEG2000.htm
  • Gas Mileage Impact Calculator: This calculator offers information correlating to gas consumption, fuel cost and emission of major pollutants. For more information, visit: www.hybridcars.com/calculator
  • Gasoline-Saving Devices: The U.S. EPA and FTC have both stated that there are no devices, currently on the market, that helps boost gas mileage any appreciable amount. Buyer beware!


Sources: Department of Energy, California Consumer Energy Center, Consumer Federation of America, Nerd Wallet, ALLDATA, EPA and Oakridge National Laboratory

Be sure to check out other articles from Jeff Burch on the Trans World Assurance Blog.

Tags: Trans World Assurance, Money Book, Jeff Burch, money saving tips, better gas mileage

Go Further On A Tank Of Gas! (Updated) - Part 2 by Jeff Burch

Posted on Tue, Jan 24, 2012


PART 1 - Tips 1 thru 4

5. Shop with grocers that use Fuelperks: Through Fuelperks you can earn 5¢ off per gallon of gas and up to 20 gallons for every $50 of food or goods you'd normally purchase through retailers. There's no cap on savings and you can earn a free tank of gas (3 month expiration date if not used). Furthermore, most retailers run extra promotions on select items that earn more fuelperks.

How it works:

A. Fill out an application and receive a loyalty card from one of these grocers in your area: Winn Dixie (FL, AL, LA, GA, MS), BI-LO (NC, SC, GA, TN), Martin's or Giant (MD, PA, VA, WV), Giant Eagle (OH, WV, MD, PA), Roundy's (WI, MN) or Rainbow Foods (MN)

B. Once you have your loyalty card, then go to www.fuelperks.com and register your loyalty card online.

C. Start shopping to save gasoline

  • Gas saving tip 1: From the comfort of your home, earn points by purchasing goods through their website.
  • Gas saving tip 2: Purchase gas gift cards from retailer(s), and at the same time earn points.
  • For more information, visit: www.fuelperks.com

Jeff Burch Save Gas

6. Save gas through your grocer:

A. KROGER: Gas discounts can be found through Kroger, the largest grocery chain in the country. States excluded from the program: AL, CA, LA, MO, OR, WA. The basics:

  • Earn 1 point for every dollar you spend on groceries (before coupons).
  • Earn 50 points for each prescription filled (excludes all government funded programs).
  • Receive 100 points for every $50 spent in gift cards (doesn’t include Kroger store gift cards).
  • For every 100 points redeemed at the pump, 10 cents per gallon is rewarded up to $1.00 per gal up to 35 gal per purchase.
  • Fuel points must be used during the month (“all or nothing”). Customers cannot use partial points for separate fill-ups:

Example:
100 points =      10 cent discount
200 points =      20 cent discount
500 points =      50 cent discount
1,000 points =   $1.00 discount  

  • Customers who use a Kroger 1-2-3 MasterCard can receive an additional 5¢ gas discount.
  • If your local Kroger store has teamed up with Shell or other outside gas stations, then buy $50 gas gift cards at Kroger, so you earn rewards points and save even more on gas!
  • Kroger pharmacies will match any local pharmacy's price for prescriptions, which means you get the best possible price on pharmaceuticals and earn points to save gas.
  • For more information, visit: www.kroger.com/in_store/fuel/Pages/default.aspx

B. FOOD CITY: Receive gas discounts from Food City (KY, TN, VA) through their Fuel Bucks program. The basics:

  • No limit on number of points you can redeem.
  • Earn 1 point for each $1.00 purchased in grocery items.
  • Receive 10 bonus points for every $10 of Food City brands purchased.
  • Earn 50 bonus points with qualifying prescriptions.
  • 150 points earns you 15¢ off per gallon on a single fill-up (Up to a maximum of 20 gallons per fill-up).
  • Points earned in one month, will expire at the end of the following month.

Example:
Points earned in Dec 2011 will expire Jan 31, 2012.

  • Earn 50 additional points for qualifying Pharmacy prescriptions. Applies to all new, transferred, or refilled prescriptions. Excludes federally funded prescriptions and $4 generic prescription plan.
  • For more information, visit: www.foodcity.com/save/fuel-bucks

C. WALMART: Get a Walmart gift card and use it at participating gas stations and you'll save 10 cents per gallon, with no other restrictions or requirements. For more information, visit: www.walmart.com/cp/Gift-Cards/96894 (see "Important Deals and Limitations" near bottom of the page).

D. PUBLIX: Keep an eye out for gas saving promotions through Publix (AL, FL, SC, TN). This promotion was recently released:

"$10 Off the Purchase of One $50 Gas Card.  With a grocery purchase of $25 or more. Coupon required for each deal. Only one deal and coupon accepted for every $25 grocery purchase."

WOW! This means you get $10 in free gas, and even if the gas cards sell out, you can get a rain check and receive the offer when they replenish their stock. Furthermore, the rain checks don't expire. Publix run these type of promotions every couple of months, so stock up when you see them.

  • If you live in area that has both Publix and a Fuelperks provider, buy gift cards to use at those stations. Save on the gift card and then save further on gas with your fuelperks!

  • Final grocer gas saving tip: Since you can purchase gas up to 20-35 gallons through these gas saving programs, and the average gas tank only holds 16 gallons, then bring your other car or gas cans to the pump, so you won't waste the discount.

NOTE: If the grocers mentioned are not within a reasonable distance or in your state, then check around with your local grocer(s) for gas saving promotions or special discounts.

Example: Safeway: www.safeway.com/ifl/grocery/club-card

For more information, visit: www.publix.com

7. Club memberships and gas cards:

  • Club memberships: Take the time to research club memberships, wholesale clubs, automobile clubs, and other organizations that offer gas discounts to members. Below, are just a few clubs to assist you in your research.

A. Costco ($50 to $100 membership): www.costco.com
B. Sam's Club ($40 to $100 membership): www.samsclub.com
C. AAA Club ($59-$159 membership): www.aaa.com
D. BJ's Wholesale ($50-$90 membership): www.bjs.com

  • Pay with gas card: Think about getting a gasoline credit card that offers 5% to 10% rebate on every gas purchase.

 

Go Further On A Tank Of Gas! (Updated) by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with PART 3 - Tips 8 thru 11 .

Tags: Trans World Assurance, Money Book, Jeff Burch, money saving tips, better gas mileage

Go Further On A Tank Of Gas! (Updated) - Part 1 by Jeff Burch

Posted on Mon, Jan 23, 2012

Worried and feeling helpless because your budget's been blown out of proportion due to the skyrocketing prices of gasoline? Solution: Get into the habit of using the following gas saving tips and ideas that will help you go further on a tank of gas.
                         
1. Be smart and wise when purchasing gasoline: Regular grade fuel costs about 20-40 cents per gallon less than premium grade. However, using regular gas in a car intended to run on premium can quickly destroy an engine. Conversely, using premium gas in a car intended to run on regular wastes gas, money and causes car problems. Check your vehicle owner's manual to find out what type of gas is right for your car.

2. Check the Internet for cheapest gas prices: Find the lowest gas prices in your area by using the sites below:
www.motortrend.com/gas_prices
www.gasbuddy.com
www.gaspricewatch.com
www.fueleconomy.gov/feg/gasprices/states/index.shtml

3. Nationwide gas discount and rebate gas station finder:
To find the nearest gas station that gives gas discounts for paying in cash or rebates/rewards by utilizing certain credit cards, visit: www.nerdwallet.com/gas-prices

4. Credit and debit cards: Some credit and debit cards provide reward points, coupons or other benefits for purchasing gas. For a list of credit cards that offer gas discounts, rebates, etc., visit:
www.fatwallet.com/forums/finance/711457
www.indexcreditcards.com/gascreditcards.html
www.rewardscards.com/gas-rebate-cards-ranked.asp

 

(Updated) Go Further On A Tank Of Gas! by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with PART 2 - Tips 5 thru 7 .

Tags: Trans World Assurance, Money Book, Jeff Burch, money saving tips, better gas mileage

Security Clearance Debt Concerns & Solutions (Part 3) by Jeff Burch

Posted on Mon, Dec 26, 2011

Previous Article - Part 2

Part 3. Solutions and assistance that can mitigate financial concerns:

Conscientious participation in credit counseling or a debt consolidation program can significantly mitigate financial concerns. Consistent, systematic, documented good faith efforts to repay or otherwise resolve debts without formal counseling will have the same effect. If it is obvious that the subject is only taking such actions to get or retain a security clearance, it will do little to convince Central Adjudication Facilities (CAF) that the problem is unlikely to recur once the clearance is granted. Therefore, efforts to resolve financial problems should begin as soon as possible. Obviously, the earlier corrective action is taken, the more likely the problem can be fully mitigated.

For further assistance, contact a reputable nonprofit 501(c)(3) Credit Counseling Agency (CCA) that has extensive experience assisting soldiers in protecting or saving their security clearance. In most cases, they can negotiate a debt repayment plan with your collectors and put these accounts on a Debt Management Plan (DMP) to be paid off as quickly as your budget allows. A CCA can provide you with a detailed report that lists all your consolidated accounts, contact information, payment amounts, and projected pay off dates. This minimizes financial risk associated with your career and aids in the acceptance of your security clearance.


Security Clearance Debt Concerns & Solutions was written by Jeff Burch. Be sure to check out the other articles on the Trans World Assurance blog written by Jeff Burch.

Tags: military, Money Book, Jeff Burch, establish credit, Security Clearance, debt

Security Clearance Debt Concerns & Solutions (Part 2) By Jeff Burch

Posted on Sat, Dec 24, 2011

Previous Article - Part 1

Part 2. What "patterns" adjudicators look for in a Personal Security Investigation (PSI):

Adjudicators follow the "whole-person" concept and look for "patterns" of irresponsibility in a PSI. A bankruptcy or foreclosure can be considered a non-issue if the financial crisis stemmed largely from circumstances beyond the subject's control and is unlikely to recur or the subject acted in a reasonable and responsible manner.

Example: If a subject has never had financial problems in the past, but got into trouble with a lender because his/her home is currently worth less than the mortgage loan due to a market downturn, and then (gulp) received PCS orders, this would tend to be considered a mitigating condition. However, if a subject going through foreclosure has a prior history of not meeting financial obligations documented in previous investigations, this suggests a pattern of financial irresponsibility that cannot be easily brushed aside. Likewise, a soldier who obtained a loan by overstating income or committed other types of loan fraud may find it difficult to convince the adjudicators that he/she was just an innocent victim of circumstances beyond their control.

 Adjudicators understand that financial problems often arise due to situations beyond the investigation subject's control, such as serious illness/disability, divorce, loss of income, crime, business downturn, and natural disasters. Again, if a person acts reasonably and responsibly under the circumstances (including bankruptcy, when necessary) to resolve their debts, the financial issue can be mitigated. The debts do not have to be fully resolved at the time of adjudication, but there should be "verifiable uninterrupted efforts" toward this goal. Response to debt is evaluated by the things people do (or don't do) about delinquent debt. How people deal with delinquent debt is often a decisive consideration, because it is viewed by adjudicators as an indication of their trustworthiness and reliability. Those who disregard their financial obligations may also disregard their responsibility to safeguard classified information. The following is a list of common indicators of irresponsibility and unethical behavior:

• Changing address without notifying creditors
• Failure to take reasonable measures to pay or reduce debts
• Knowingly issuing bad checks
• Increased credit card use immediately before filing for bankruptcy

 

Security Clearance Debt Concerns & Solutions by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with Part 3 - Solutions and assistance that can mitigate financial concerns.

Tags: military, Money Book, Jeff Burch, establish credit, Security Clearance, debt

Security Clearance Debt Concerns & Solutions (Part 1) By Jeff Burch

Posted on Fri, Dec 23, 2011

Previous Article - Introduction

Part 1. Concerns and issues that can occur if you're not proactive with your security clearance:

A. Financial concerns: 

Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of engaging in illegal acts to generate funds. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.
 
B. Conditions that raise security concerns and may lead to disqualification:

• Inability or unwillingness to satisfy debts
• Indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of
willingness or intent to pay the debt or establish a realistic plan to pay the debt  
• A history of not meeting financial obligations
• Deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust
• Consistent spending beyond one’s means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ratio, and/or other financial analysis
• Financial problems that are linked to drug abuse, alcoholism, gambling problems, or other issues of security concern
• Failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same
• Unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that cannot be explained by subject's known legal sources of income
• Compulsive or addictive gambling as indicated by an unsuccessful attempt to stop gambling, concealment of losses, borrowing money to fund gambling or pay gambling debts, family conflict or other problems caused by gambling

C. Conditions that could mitigate security concerns:

• The behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment
• The conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances
• The person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control
• The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts
• The individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions taken to resolve the issue
• The affluence resulted from a legal source of income

 

Security Clearance Debt Concerns & Solutions by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with Part 2 - What "patterns" adjudicators look for in a Personal Security Investigation (PSI).

Tags: military, Money Book, Jeff Burch, establish credit, Security Clearance, debt

Security Clearance Debt Concerns & Solutions (Intro) by Jeff Burch

Posted on Thu, Dec 22, 2011

INTRODUCTION

A security clearance is a status granted to individuals allowing them access to classified information, i.e., state secrets, or to restricted areas after completion of a thorough background check. Additionally, a security clearance can be a lucrative commodity to retain after service separation for future employment opportunities.

To apply for Military Security Clearance one must fill out and complete Standard Form 86 (www.opm. gov/Forms/pdf_fill/SF86_July2008.pdf).

Included in the SF 86 questionnaire is Section 26 that concerns your financial records within the last 7 years, and asks for full disclosure of all financial obligations, including those in which you are a cosigner or guarantor. Questions asked pertain to bankruptcy, repossessions, liens, unpaid judgments, wages garnished, 90/180 days current or past due/delinquent accounts, etc. Dire consequences may come about if discrepancies arise.

Example: A soldier marks "no" to all Section 26 questions, assuming he had paid all his bills on time, never been late, etc. But 3 years prior when splitting a townhouse rental with 3 other people, the cable was in his name. When he moved out, he told the roommates to return the cable box. They never did and the cable company marked him down for an unpaid return 3 years ago. Fast forward 5 years and the US Government pulls his credit and sees the discrepancy. The soldier has lied (unknowingly) on his SF 86 and they discharge him from service.

 

Security Clearance Debt Concerns & Solutions by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with Part 1 - Concerns and issues that can occur if you're not proactive with your security clearance.

Tags: military, Money Book, Jeff Burch, establish credit, Security Clearance, debt, credit history

Car Financing Strategies, Part 3 (Jeff Burch, Money Book)

Posted on Sat, Jun 18, 2011

TRICKS USED TO FOOL THE UNINFORMED

“We have credit unions that lend money for cars”:  That is a true statement; however, if you finance your car through their credit union you will pay the commission that they give to the dealer for bringing in your business, which will cost you 1% to 2% or more. 

“Our loan rate is 6%, which is lower than your credit union’s loan rate of 8.75%”: That may be true; however, the dealer might have conveniently forgotten to factor your rebate into that equation.

Example: $14,000 car financed by a dealer at 6% for 48-months, payment would be $328.72 a month. However, by applying a rebate of $1,500 toward down payment, and loan financed through credit union at 8.75%, monthly payment would be $309.50. That would be a nice tidy savings of $922.56 over a 48-month loan.

Important: Make sure car manufacturer sends rebate check directly to your residence.

Buying credit disability insurance or credit life:  These insurance polices pay car payment obligations off in case of death, or if one should become disabled. Typically, they are over-priced policies that you do not need. Consider the policies as optional coverage, no matter what the dealer insists. Besides, even if you decline the policy and die later, your estate is liable for all car payments.

Other solution: Purchase cheap term insurance policy.

Before signing any contract: Make sure that the dealer or lender has not added an insurance policy to the contract without your knowledge. Adding a policy will leave you with a higher payment than expected.   Calculate monthly car payment by using loan table (on right); then make doubly sure this is the correct figure, before signing your name on the contract.

Important:  Several credit unions do not charge anything extra for such insurance policies. 

Bonus: Several credit unions believe that a death cancels loan obligations. 

Getting a loan for the loooooooongest period:  Typically, consumers finance long-term loans, for lower monthly car payments, or when financing a costlier car than they can readily afford. 

Problem: The longer the loan, the more interest you will pay, and on top of it, be charged a higher interest rate. However, when purchasing a used car, the interest rate is generally the same for two or four year loans.

Danger: By borrowing money too long, you may end up paying far more than the car is truly worth, which would be costly if you try selling it.

------------------------------------------------------------------------------

Example: Financing $14,000 car

 Length          Interest         Monthly          Total
of Loan             Rate          Payments      Interest

 3-year                6%             $425.88       $1,331.68

 4-year                7%             $335.16       $2,087.68

 5-year                8%             $283.92       $3,035.20

 6-year                9%            $252.36       $4,169.92

 7-year              10%             $232.42       $5,523.28


------------------------------------------------------------------------------

Strategy #3: Lower payments will make it easier on your budget each month, but payments will seem like an eternity. Look for more “reasonably priced” cars that come with affordable payments and shorter pay-off plan. 

Note: To lower and shorten payments take out a loan for no more than 80% of loan value of the car, and then pay difference with down payment.

Calculate payments: The table below will help you to figure monthly payments with a mixture of interest rates and for any dollar amount.

Example: Car costs $14,000, with 48-month loan at 10% interest rate. Divide amount of the loan $14,000 into $1,000: $14,500 ÷ $1,000 = 14. Locate 10% rate on table; then on right, under 48-months you will find the factor of 25.36. Multiply 14 by 25.36 and you will have an exact monthly payment of $355.04.

Interest    36-months      48-months    60-months
  Rate        per $1,000      per $1,000     per $1,000

  11.00           32.73               25.84             21.74

  10.75           32.62               25.72             21.61

  10.50           32.50               25.60             21.49

  10.25           32.38               25.48             21.37

  10.00           32.26               25.36             21.24

    9.75           32.14               25.24             21.12

    9.50           32.03               25.12             21.00

    9.25           31.91               25.00             20.87

    9.00           31.79               24.88             20.75

    8.75           31.68               24.76             20.63

    8.50           31.56               24.64             20.51

    8.25           31.45               24.53             20.39

    8.00           31.34               24.42             20.28

    7.75           31.22               24.29             20.15

    7.50           31.10               24.17             20.03

    7.25           30.99               24.06             19.91

    7.00           30.87               23.94             19.80

    6.75           30.76               23.83             19.68

    6.50           30.64               23.71             19.56

    6.25           30.53               23.59             19.44

    6.00           30.42               23.48             19.33

 

Lease payments: To familiarize yourself with the complexity of car leases, see: www.LeaseGuide.com

Tags: Money Book, Jeff Burch, car financing, auto loans

Car Financing Strategies, Part 1 (Jeff Burch, Money Book)

Posted on Thu, Jun 16, 2011

To get a great deal on a new or used car, you have to do more than just twist the dealer into giving you a great price. You also must haggle and bargain for best terms and interest rate for your new car loan. Usually, car dealerships will give in to your tactics to lower the price of car, but will launch a full-scale assault when it comes to car financing. That is because a dealership makes most of their money on car financing.

To be fair, it is the goal of any good business to make money, and that is what a good dealership should do. Furthermore, a dealership has a full arsenal of schemes and tricks to get the job done. However, it is the right of any consumer to research and gain knowledge in order to get the best deal possible. With a little insight, you can fine-tune yourself into a consumer who knows his way around a dealership and guard against dealer traps.

According to www.edmunds.com, in the United States the average car deal consists of:

 ■ Down payment of $2,400

 ■ Amount financed $24,864

 ■ Monthly payment of $479.

The most popular loan term is 6-years. Nowadays, you can finance up to 100% of the manufacturer's suggested retail price, plus taxes, tags and fees. Even if you are "upside down" on your old car loan (you still owe money after the trade-in), it's no longer a deal breaker.

However, car loans can vary from 0% to as high as 30%. Therefore, it is extremely important to know that dealers put their most gifted, brightest and toughest closers in the finance/insurance office. This is the place where you are shown offers for extended warranties and other add-ons, including tons of paperwork that can exhaust you to the point of giving in.

The following strategies will help prevent you from being “taken for a ride” in a dealer's finance office.

Strategy #1: To begin with, arrange financing first from an outside source. A good place to start looking for a car loan is through local credit unions, which mostly, have the lowest interest rates. If you don’t belong to a credit union already, join one fast. Car loans are only one of many benefits of belonging to a credit union. All military personnel can belong to a credit union. 

To find credit unions in your area, call the Credit Union National Association (CUNA) at 800-358-5710 or visit www.cuna.org.

Once you find a few credit unions, call them over the phone; compare their loan rates with other institutions offering car loans, such as local banks, thrifts, savings-and-loan, etc.

Once you have your financing in place, start your search for the car you want, but do not tell the salesperson that you already have your car loan secured, until you have the car's price in writing.

Danger: Not researching the best terms and financing before purchasing a car, and assuming that dealers offer the best deal when it comes to financing a car loan, to which, consumers later learn to their angst of longer and higher payments.

Lesson: Dealers are just “middlemen” when it comes to car financing between you and car lending institution.  Dealers typically try to finance your car at a higher interest rate set by their source, so they can increase their profit margin.

Example: If you qualify for a 6% rate, but the dealer charges 8% on a 60-month, $20,000 car loan, you pay over $1,100 more in interest (extra profit for the dealer).

Auto Loan Calculator: Use calculator to check interest rates to see how much car you can afford at: www.bankrate.com/calculators/auto/auto-loan-calculator.aspx

WARNING: Do not forget to include auto insurance payments, especially, when considering how high a price you want to pay for a car.

 

This series of articles on Car Financing Strategies from Jeff Burch's Money Book will continue tomorrow.

Tags: Money Book, Jeff Burch, car financing, auto loans

VA Home Loan Programs, Part 3 (Jeff Burch's, Money Book)

Posted on Sat, May 21, 2011

STEPS TO PURCHASING A HOME

1. PRE-QUALIFY FOR A LOAN:
Many lenders will accept your loan application and begin processing the loan for only the cost of a credit report, usually under $25.  Pre-qualifying will:

  • Tell you how much house you can afford to buy.
  • Get your CERTIFICATE OF ELIGIBILITY ordered or updated.
  • Check your credit, and begin repairs if necessary.
  • Keep you from looking at a home you cannot afford.
  • Home sellers and their realtors will look favorably on your offer because they can be confident that your loan will go through.
  • If your credit report is in and your ELIGIBILITY CERTIFICATE is ordered, your loan will close much faster.

2. LOCATE A REALTOR IN THE AREA YOU WANT TO LIVE IN:
As a purchaser, the Realtor works for you FREE (since the seller pays the commission). Certain Realtors will also help you with your closing costs. If a Realtor wants money from you to find you a home, RUN, don’t walk, to another Realtor!

3. WRITE A CONTRACT ON THE HOME YOU WANT:
Your Realtor will prepare this for you. VA contracts contain a clause called the “VA ESCAPE CLAUSE” which protects your EARNEST MONEY if the house does not appraise for the purchase price.

4. APPRAISE THE HOUSE:
A VA approved appraiser will now determine the value of the home. He will note any obvious repairs that need to be done to bring the house up to VA STANDARDS. The VA then reviews his work to further safeguard your interest and issues a VA Certificate of Reasonable Value.

5. LOAN APPROVAL & CLOSING:
VA or a lender’s underwriter approved by VA now issues the final approval and the loan closing is scheduled. You will sign many papers, all approved by the VA. The lender and Title Company are limited in the closing costs; they can charge you. The VA will not let them charge UN-allowable closing costs. This does NOT prevent them from charging you too high an interest rate.   

6. MOVE IN:
Congratulations! You have taken a major step toward financial freedom and wealth building.


OPM—THE SECRET TO WEALTH BUILDING
OPM stands for OTHER PEOPLES MONEY. If you borrowed $150,000 to purchase a home, you have $150,000 of someone else’s money working for you. If your home goes up 5% in value each year, you are getting richer by $7,500 per year or $625 per month!  PLUS, now your gains compound!

EXAMPLE: 5% yearly appreciation on a $150,000 home over a 30-year period.

5th year: $191,442                 
10th year: $244,334
15th year: $311,839
20th year: $397,995
25th year: $507,953
30th year: $648,291

MORE INFORMATION ON HOME LOANS

Tags: Money Book, Jeff Burch, VA, home loans, home ownership