My partner had a debit/ATM card with the same bank for almost a decade. When he first got it (and when I got my first ATM card, at about the same time) withdrawal requests would just be denied if they were over the amount in the account. A few years later, I switched to a credit union, but he stuck with his big bank for the easy availability of their ATMs.
Last year, he got hit with an overdraft charge for an ATM withdrawal. We contested the fee, they stonewalled, he went in to close the account and all the sudden they could waive the fee. What they claimed not to be able to do was change the ATM setup to deny overdraft withdrawals. So we closed the account anyway.
My credit union has some downsides, but whenever I research the alternatives, they're not just worse, they're downright evil. We need banking reform laws - the laws targeting check cashing/pawn shop/payday loan places should be aimed at the banks, as well.
Just to get this out of the way: it doesn't have to be warm to bike. My partner bikes to work as long as it's above zero, and we know people who bike well below that. And, where you live is a choice. If you plan on biking, live near where you work, end of story.
But we have a car anyway, for long trips. If we needed a new car, we'd buy one. We don't, so we won't. The price/incentives/stability of the automaker don't really affect our buying decisions.
I'm with Lucille - maybe this recession will put the excess producers who depend on debt-fuelled vanity buying out of business, and leave us with a level of car production to support people buying at a lower level.
Yes, we looking at a new car for me. Hubby has a truck that is 3 years old, and paid off after 1 year. So he is good for several years. My Saturn, which I love is now 8 years old. We paid it off also after 1 year. It only has 60,000. I live close to work, grocery stores, malls, etc. We contacted our Credit Union and interest would be 2%. Can't kick at that. Our goal again is to have it paid off in one year, which it will be. The prices right now are just too good for what I am looking at to not upgrade. Again would probably be another 8 years before we did this again.
So, yes this is definately the right time for us, maybe not for everyone, but for us. Hubby has a city job with 22 years in. It is a BIG city and they would have to shut the whole shabang down for him to not have a job. My job is secure for at least this year. But we would stil be comfortable with just his income. We are one of the lucky few and yes, we do count our blessings. So far no one in either side of our families has been affected job wise. So with prices of cars where they are now it it the perfect time for us to invest in a new car.
We will possibly take advantage of this, but only because we will be in the market for a car very soon. We are still driving the car we bought new six years ago, and plan on keeping it, but have since had two kids who are almost school age, so driving only one car is going to get harder and harder. We buy new because we've owned a couple used cars that ended up with big problems that weren't worth fixing after only a few years. I'd rather buy something affordable (note: we drive a KIA that cost all of 17 grand, and was paid off after less than three years), maintain it the way it is supposed to be maintained (something you never know about when you buy used), and get rid of it when it starts having the huge problems our other cars did. Also, we have the cash on hand to buy something new. So, yeah, I'd look at a domestic car with some tax incentives if it met our needs and budget. I wouldn't say that is the reason we'd buy it now, though.
It would take one hell of an incentive AND a majorly innovative vehicle to get me to take on a car payment. Don't get me wrong, I'd *love* a shiny new car, but my car runs fine, and I just don't want to take on a car payment.
Guest 77, you do have to accept the position you are offered in California. So that means that people wouldn't even apply to the lower paying positions because they know they have to accept it. Additionally, you cannot be attending school, but like I said in my article my friend is preparing for graduate school. This means studying for tests and getting essays together. The unemployment office doesn't even know that he is doing this.
I totally disagree with your assumptions on people dealing with unemployment insurance. I do not know much about California criteria but in Kansas some of the rules are as follow:
1. To remain on UI you have to accept a position if it is 75% or greater than your last salary.
Ex. Someone who was making 40,000 in their last job must accept a job if it is greater than or even to 30,000. Otherwise, you lose benefits.
2. Attending school is forbidden unless you are on a WIA or TRA program in which you are allowed training while receiving UI benefits.
3. You must keep records of all resumes/applications submitted with any followup information such as interviews with names and date included.
Furthermore, I wonder if you have considered in times of high unemployment people are on extended benefits for longer amounts of time because of a smaller job pool instead of freeloading?
I'll use my coworkers' salaries as a data point. Generally, higher salary = better worker. If someone makes more than me, I'll want to know why. This will lead me to examine their work habits and output. They become a positive example. If there's something that I can emulate from a higher-earner, I'm going to do it to better myself.
Bikes work great, as long as you don't have to commute too far and live somewhere warm enough to ride it year round (or nearly).
Public transport is heavily, heavily taxpayer subsidized. As a rider, you probably pay about 1/5 of the actual costs of your transportation. Those that religiously rely on public transportation are leeches on the underbelly of society.
I would love to buy an electric car, too, but it financially doesn't make sense to do so at the prices being bandied about today. I'm sure it will make sense in the future, but it doesn't yet.
In general some good points pro and con in the comments.
One point is that I take exception to the statement that "Getting new insurance at your age will cost exponentially more" provided under the reasons why not to cash it in. Assuming we're talking about getting a policy in your early twenties from a parent, a quick check at an insurance web site showed: 100 K policy, 23 year old non-smoker in decent health, $20/month for 20 year level term or $86/month for whole life. Using 3% inflation, the $86 quote would be about $43/mon 23 years ago. Hardly more, and definately not "exponentially more". Even if the comparison is whole life to whole life, two to three times what you would pay now is not exponentially more.
That said, I feel the important point whenever you have to make a financial decision is not to follow advice from anyone blindly. They are not in your shoes. You need to weigh a few options, run some basic numbers, be honest with yourself if you'll just fritter the cash value away or really use it on something to make yourself financially more stable (which I would believe is what parents really want for their kids), and then make a decision that fits your life and values.
I think it's sad that our governments solution to the fact that we're broke is to spend more money. What's even more sad is that they're trying to drive people into making bad decisions. Buying a new car is fun, sure, but it's potentially the worst investment you can make. Cars are depreciating assets, and they lose 15% of their value just driving them off the lot. Dumb. And in an economy like this, the last thing people need to do after losing their asses on their house or investments is to turn around and lose on their car.
But we can all thank Kensian economics for getting us here. The people don't want to spend money, businesses don't have any money, so the solution is that the government will take your money and spend it for you.
Buy! Buy! Buy! Now's never been a better time to buy a Ford!
I enjoyed this post, and am going to call my bank asap to opt out of this service. However, I just wanted to put my two cents in regarding different options for overdraft. The option to have it go to your savings account gives me the willies. If anyone were to get your debit card information and used the card - they would not only have access to all that's in your checking account - but when that was used up, then also all that is in your savings account. And because debit cards don't offer the same "protection" as credit cards do you could be out a lot of money very quickly. Even if you were to recover the funds due to fraudulent charges - with debit cards the practice is that you don't get the money back until *after* the dispute is settled - and who knows how long that would take. And every banks "protection" amounts (I'm not sure what the proper term is - but charges they are willing to cover) are different - and hardly ever open ended.
I think a clunkers for cash program is a ridiculous overreach of government. But I think it's great when car lots offer those same deals. With the price of so many scrap metals going up I'm surprised we aren't seeing more offers like these privately.
If you cancel the policy for the cash surrender value you only have to pay income taxes on the investment buildup (i.e. the difference between the cash value and the amount of premiums that were paid). On most of these policies that were taken out on us as children the cash value is rarely higher than the premiums that were paid in and so most people don't have to pay taxes.
The hidden cost of a shiny new car is insurance. Having to pay for full coverage while paying off the bank loan. I'm never going to make the mistake of buying a new car again!
I will not even consider purchasing a car from an auto manufacturer that has received help from the government no matter how many incentives they offer. I can not support the expansion of the government into areas that it should not go.
We've always had used cars. New cars would be out of the question for alot of reasons, no matter how we'd obtain it. With a young male almost driver in the house, our car insurance would kill us. Then there's the new car off the lot instant depreciation, and the hefty car payments. (With our present system we save to pay in cash in full, avoiding interest and increasing negotiating options.) The phrase "government paid" is being tossed around, as if it were some ancient wealthy uncle out there, dishing out goodies to his relatives. It'll be our tax money folks, and our kids and our grandkids...it never pays to presume upon the future.
We just are not people that buy new cars every few years. We don't even buy used cars very often. We usually try to maintain what we have as long as possible. When it becomes too ancient to bother fixing it or gets some massive repair needed that out does the worth to us of the vehicle we consider looking for another one.
The only even possible consideration for buying a new vehicle is if one of the new technology cars comes out like the Volt or the VW blue motion models. Even then it isn't a given.
Part of the problem is that the auto industry was running based on all of these people buying a new car every 2-3 years. Most did it for status or fashion. If they stop buying new cars frequently you really can't expect people like me to make up the slack.
i'm thoroughly against the "cash for clunkers" proposals being suggested...mostly because working on old cars is a hobby of mine, and this will utterly kill the restoration market. i have been known to buy two of an identical vehicle to ensure one is functioning at all times, and i'll still save thousands over a new car.
My partner had a debit/ATM card with the same bank for almost a decade. When he first got it (and when I got my first ATM card, at about the same time) withdrawal requests would just be denied if they were over the amount in the account. A few years later, I switched to a credit union, but he stuck with his big bank for the easy availability of their ATMs.
Last year, he got hit with an overdraft charge for an ATM withdrawal. We contested the fee, they stonewalled, he went in to close the account and all the sudden they could waive the fee. What they claimed not to be able to do was change the ATM setup to deny overdraft withdrawals. So we closed the account anyway.
My credit union has some downsides, but whenever I research the alternatives, they're not just worse, they're downright evil. We need banking reform laws - the laws targeting check cashing/pawn shop/payday loan places should be aimed at the banks, as well.
Just to get this out of the way: it doesn't have to be warm to bike. My partner bikes to work as long as it's above zero, and we know people who bike well below that. And, where you live is a choice. If you plan on biking, live near where you work, end of story.
But we have a car anyway, for long trips. If we needed a new car, we'd buy one. We don't, so we won't. The price/incentives/stability of the automaker don't really affect our buying decisions.
I'm with Lucille - maybe this recession will put the excess producers who depend on debt-fuelled vanity buying out of business, and leave us with a level of car production to support people buying at a lower level.
Yes, we looking at a new car for me. Hubby has a truck that is 3 years old, and paid off after 1 year. So he is good for several years. My Saturn, which I love is now 8 years old. We paid it off also after 1 year. It only has 60,000. I live close to work, grocery stores, malls, etc. We contacted our Credit Union and interest would be 2%. Can't kick at that. Our goal again is to have it paid off in one year, which it will be. The prices right now are just too good for what I am looking at to not upgrade. Again would probably be another 8 years before we did this again.
So, yes this is definately the right time for us, maybe not for everyone, but for us. Hubby has a city job with 22 years in. It is a BIG city and they would have to shut the whole shabang down for him to not have a job. My job is secure for at least this year. But we would stil be comfortable with just his income. We are one of the lucky few and yes, we do count our blessings. So far no one in either side of our families has been affected job wise. So with prices of cars where they are now it it the perfect time for us to invest in a new car.
We will possibly take advantage of this, but only because we will be in the market for a car very soon. We are still driving the car we bought new six years ago, and plan on keeping it, but have since had two kids who are almost school age, so driving only one car is going to get harder and harder. We buy new because we've owned a couple used cars that ended up with big problems that weren't worth fixing after only a few years. I'd rather buy something affordable (note: we drive a KIA that cost all of 17 grand, and was paid off after less than three years), maintain it the way it is supposed to be maintained (something you never know about when you buy used), and get rid of it when it starts having the huge problems our other cars did. Also, we have the cash on hand to buy something new. So, yeah, I'd look at a domestic car with some tax incentives if it met our needs and budget. I wouldn't say that is the reason we'd buy it now, though.
It would take one hell of an incentive AND a majorly innovative vehicle to get me to take on a car payment. Don't get me wrong, I'd *love* a shiny new car, but my car runs fine, and I just don't want to take on a car payment.
Guest 77, you do have to accept the position you are offered in California. So that means that people wouldn't even apply to the lower paying positions because they know they have to accept it. Additionally, you cannot be attending school, but like I said in my article my friend is preparing for graduate school. This means studying for tests and getting essays together. The unemployment office doesn't even know that he is doing this.
I totally disagree with your assumptions on people dealing with unemployment insurance. I do not know much about California criteria but in Kansas some of the rules are as follow:
1. To remain on UI you have to accept a position if it is 75% or greater than your last salary.
Ex. Someone who was making 40,000 in their last job must accept a job if it is greater than or even to 30,000. Otherwise, you lose benefits.
2. Attending school is forbidden unless you are on a WIA or TRA program in which you are allowed training while receiving UI benefits.
3. You must keep records of all resumes/applications submitted with any followup information such as interviews with names and date included.
Furthermore, I wonder if you have considered in times of high unemployment people are on extended benefits for longer amounts of time because of a smaller job pool instead of freeloading?
You must not live in the Southeastern USA. Public transportation?!?!? HA hahahahahhahhaaa....
I'll use my coworkers' salaries as a data point. Generally, higher salary = better worker. If someone makes more than me, I'll want to know why. This will lead me to examine their work habits and output. They become a positive example. If there's something that I can emulate from a higher-earner, I'm going to do it to better myself.
Bikes work great, as long as you don't have to commute too far and live somewhere warm enough to ride it year round (or nearly).
Public transport is heavily, heavily taxpayer subsidized. As a rider, you probably pay about 1/5 of the actual costs of your transportation. Those that religiously rely on public transportation are leeches on the underbelly of society.
I would love to buy an electric car, too, but it financially doesn't make sense to do so at the prices being bandied about today. I'm sure it will make sense in the future, but it doesn't yet.
In general some good points pro and con in the comments.
One point is that I take exception to the statement that "Getting new insurance at your age will cost exponentially more" provided under the reasons why not to cash it in. Assuming we're talking about getting a policy in your early twenties from a parent, a quick check at an insurance web site showed: 100 K policy, 23 year old non-smoker in decent health, $20/month for 20 year level term or $86/month for whole life. Using 3% inflation, the $86 quote would be about $43/mon 23 years ago. Hardly more, and definately not "exponentially more". Even if the comparison is whole life to whole life, two to three times what you would pay now is not exponentially more.
That said, I feel the important point whenever you have to make a financial decision is not to follow advice from anyone blindly. They are not in your shoes. You need to weigh a few options, run some basic numbers, be honest with yourself if you'll just fritter the cash value away or really use it on something to make yourself financially more stable (which I would believe is what parents really want for their kids), and then make a decision that fits your life and values.
I think it's sad that our governments solution to the fact that we're broke is to spend more money. What's even more sad is that they're trying to drive people into making bad decisions. Buying a new car is fun, sure, but it's potentially the worst investment you can make. Cars are depreciating assets, and they lose 15% of their value just driving them off the lot. Dumb. And in an economy like this, the last thing people need to do after losing their asses on their house or investments is to turn around and lose on their car.
But we can all thank Kensian economics for getting us here. The people don't want to spend money, businesses don't have any money, so the solution is that the government will take your money and spend it for you.
Buy! Buy! Buy! Now's never been a better time to buy a Ford!
Ha. No it's not.
My bike works great.
I'll buy a Pure electric car.
Never buying another gas powered dinosaur.
Might not even buy the electric, i can use public transport for long distances.
I enjoyed this post, and am going to call my bank asap to opt out of this service. However, I just wanted to put my two cents in regarding different options for overdraft. The option to have it go to your savings account gives me the willies. If anyone were to get your debit card information and used the card - they would not only have access to all that's in your checking account - but when that was used up, then also all that is in your savings account. And because debit cards don't offer the same "protection" as credit cards do you could be out a lot of money very quickly. Even if you were to recover the funds due to fraudulent charges - with debit cards the practice is that you don't get the money back until *after* the dispute is settled - and who knows how long that would take. And every banks "protection" amounts (I'm not sure what the proper term is - but charges they are willing to cover) are different - and hardly ever open ended.
I think a clunkers for cash program is a ridiculous overreach of government. But I think it's great when car lots offer those same deals. With the price of so many scrap metals going up I'm surprised we aren't seeing more offers like these privately.
If you cancel the policy for the cash surrender value you only have to pay income taxes on the investment buildup (i.e. the difference between the cash value and the amount of premiums that were paid). On most of these policies that were taken out on us as children the cash value is rarely higher than the premiums that were paid in and so most people don't have to pay taxes.
The hidden cost of a shiny new car is insurance. Having to pay for full coverage while paying off the bank loan. I'm never going to make the mistake of buying a new car again!
I will not even consider purchasing a car from an auto manufacturer that has received help from the government no matter how many incentives they offer. I can not support the expansion of the government into areas that it should not go.
no
Maybe if domestic cars didn't suck. Maybe.
How about slashing the UAW's salary in half as a condition for this incentives?
In the end, you'll have to pry the keys to my Accord from my cold, dead hands.
I haven't had a car payment since 1992. This is an essential piece of MY financial freedom.
I know it is naive to wish that businesses and government would spent less than they earn like the rest of us are trying to do but, there it is.
No
We've always had used cars. New cars would be out of the question for alot of reasons, no matter how we'd obtain it. With a young male almost driver in the house, our car insurance would kill us. Then there's the new car off the lot instant depreciation, and the hefty car payments. (With our present system we save to pay in cash in full, avoiding interest and increasing negotiating options.) The phrase "government paid" is being tossed around, as if it were some ancient wealthy uncle out there, dishing out goodies to his relatives. It'll be our tax money folks, and our kids and our grandkids...it never pays to presume upon the future.
We just are not people that buy new cars every few years. We don't even buy used cars very often. We usually try to maintain what we have as long as possible. When it becomes too ancient to bother fixing it or gets some massive repair needed that out does the worth to us of the vehicle we consider looking for another one.
The only even possible consideration for buying a new vehicle is if one of the new technology cars comes out like the Volt or the VW blue motion models. Even then it isn't a given.
Part of the problem is that the auto industry was running based on all of these people buying a new car every 2-3 years. Most did it for status or fashion. If they stop buying new cars frequently you really can't expect people like me to make up the slack.
i'm thoroughly against the "cash for clunkers" proposals being suggested...mostly because working on old cars is a hobby of mine, and this will utterly kill the restoration market. i have been known to buy two of an identical vehicle to ensure one is functioning at all times, and i'll still save thousands over a new car.