Tech CU Money Savvy

Auto makers are cutting back on their leasing options for wannabe–new–car owners, especially those rare people who still want to get into an SUV or big pickup. What’s the reason? Falling used car values, i.e. the “residual value” at lease-end that is used to figure what the lease payments need to be has fallen as much as 26 percent because fewer people are willing to buy gas guzzlers these days. Pair that with a rising concern about tightening credit markets, and it turns out there aren’t many financial people in the car business willing to take on a lease.

Here are just a few of the manufacturers who are having trouble with their leasing programs:

• Chrysler: will suspend offering new leases on Friday
• Ford: lease rates will rise on big vehicles
• General Motors (GM): “weeding” out riskier credit customers
• Nissan: having trouble with their leasing program because of potential losses

Gotta buy? Get the best price with an auto buying service!

With leasing options falling to the wayside, more consumers are going to have to purchase their vehicle outright. This means you may not be getting that luxury car you could only afford with a lease, but it doesn’t mean you can’t still get a good deal. One option is to turn to an auto buying service to help you search for the best price on the vehicle of your choice, and it offers the added benefit of eliminating the need for you to deal with the dreaded car salesman. A number of financial institutions offer free auto buying services, including Tech CU.

Our service, The Car Store, is free and all requests can be conveniently submitted online.

Here’s how it works:

1. Go to the dealer and test drive the vehicle of your choice.<
2. Decide the exact make, model, upgrades, color (interior/exterior), etc. that you want.
3. Call, email or submit your specifications online.
4. A consultant will work directly with you to help you find what you’re looking for, and they’ll find you the lowest possible price for that vehicle. They’ll even deliver the car right to your doorstep!

As an extra incentive, Tech CU will also offer you a .25% APR discount off of your approved rate for purchasing through The Car Store.

You can also turn to one of the many independent personal vehicle shoppers around the Bay Area. Doing a simple Google search using the keyword ‘Auto Buying Services’ will provide plenty of names. Here’s a link to a recent article on the “Burgeoning Trend in Car Buying: Using ‘Personal Shoppers’ Instead of Dealerships.”

One last note: before working with anyone, you may want to check out Yelp! to see if the personal vehicle shopper you’re considering has been reviewed (positively or negatively). It’s a great resource for services like this.

While there is an endless deluge of forms and reports the average person deals with throughout the course of his or her life, no single document has the absolute power to affect an individual’s financial life more so than the infamous credit report and related FICO score.

Why is the credit report so important? Because the score that is derived from that report ultimately affects the loan rate you will receive on a home loan, car loan or credit card. The information on a credit report can also be used by potential employers in evaluating you as a candidate for a new job.

What You Don’t Know Can Hurt You
So you think that because you’ve been faithfully making your required payments to creditors month after month (well, maybe you’ve had one or two late payments) your credit score is in the stratospheric range—you’re cruising in the high seven hundreds, right? Think again!

What many people don’t know is that it’s easy to mangle your credit—even when you’re following what you think is good advice. Click this link to learn the 5 Big Credit Mistakes that can take your score down!

Your Credit Report—it says a lot about you
A credit report includes information on your place of residency, the frequency with which you pay your bills, whether you have been arrested or even if you have filed for bankruptcy. Nationwide consumer reporting agencies sell this information to creditors who use this information to evaluate you when applying for credit, insurance, rental leases and even employment.

With the frightening rise in Identity Theft, many individuals are finding themselves in situations where fraudsters have stolen their identities and secured loans in their names and in the process, devastated their credit. Sometimes the culprit of a negative credit rating can be erroneous information provided to the credit bureau. Recovering from a damaged credit report is a time consuming and frustrating process often requiring the assistance of professionals.

When in doubt, check it out!
The Fair Credit Reporting Act (FCRA,) requires each of the nationwide consumer reporting companies (Equifax, Experian, and TransUnion) to provide you a free credit report once every 12 months. Taking a proactive approach to ensuring that your credit report remains accurate is as easy as ordering a free credit report online at: annualcreditreport.com.

And believe it or not, right now you have an even better option available to you than simply checking your credit report once a year. You can get up to 9 months of free credit monitoring through TransUnion! We blogged about this a few weeks ago, and you can read the full story by clicking here. There is a deadline for signing up for this free service (September 24), so you’ll want to act fast.

Bottom line, it’s important to stay on top of your credit report, and luckily there numerous web resources available to you today. We’ve listed just a few here. If you have another suggestion, please leave your comments. Happy crediting!

Resources for Finding Your Credit Score Online:

• Quizzle.com (Affiliated with Quicken Loans, this website will provide you a free credit report and an unofficial Quizzle credit score.)

• CreditKarma.com (Provides a free credit score which comes from one of the three major credit bureaus and allows you the ability to track and monitor your score.)

• myFICO.com (Fee-based service that offers reports obtained from Equifax, Experian, and TransUnion.)

The closure on July 11th of Pasadena-based IndyMac Bancorp has once again sent shivers down the spine of many across the country. Even those who’ve never deposited as much as a dime with IndyMac are wondering “just how safe is my money?”

We blogged about this topic back in January when people were feeling jittery about what was going on with Countrywide. Of course, Countrywide didn’t go under. Bank of America stepped in and bought them, essentially rescuing the mortgage lender and getting a pretty good deal in the process (BoA got Countrywide for around a 0.76 percent discount).

What happened with Countrywide and now IndyMac is directly related to the sub-prime mortgage meltdown. Why are we surprised? Many experts told us it was coming. But let’s put things in perspective: the failure of these two mortgage lenders doesn’t mean that every financial institution across the country is in trouble. Still, you may be wondering about the safety of your own deposits at a credit union. Are they insured or not?

The answer is emphatically—Yes! Your deposits are federally insured at a credit union. The equivalent of the FDIC for credit unions is the NCUSIF (National Credit Union Share Insurance Fund), overseen by the NCUA (National Credit Union Administration), the regulatory agency for federal credit unions. In the same way that bank deposits are insured for up to $100,000 and certain other accounts (such as IRAs) for up to $250,000, so are credit union deposits.
http://www.ncua.gov/ShareInsurance/Index.htm

On July 14th, NCUA Chairman JoAnn Johnson released a statement saying,

“Member deposits in federal and almost all state chartered credit unions are federally insured by the NCUA, through the National Credit Union Share Insurance Fund (NCUSIF). NCUSIF is backed by the full-faith and credit of the United States Government. Consumers who have federally insured funds in credit unions should rest assured that their deposits are safe up to at least $100,000 per account, with additional coverage of up to $250,000 for certain retirement accounts.”

Here are some additional facts that you may want to consider:

• Not one penny of insured savings has ever been lost by a member of a federally insured credit union. (Note: While Tech CU is not federally chartered, we are federally insured.)

• All credit unions must be insured by the NCUA, and no credit union may terminate its federal insurance without first notifying its members. The NCUSIF is backed by the full faith and credit of the United States government.

• Credit unions that are insured by the NCUSIF must display the official NCUA insurance sign in their offices:

So what do you do if you have more than $250,000 invested with a credit union? Here’s what the NCUA has to say:

Generally, if a credit union member has more than one account in the same credit union, those accounts are added together and insured in the aggregate. There are exceptions, though. You may obtain additional separate coverage on multiple accounts, but only if you have different ownership interests or rights in different types of accounts and you properly complete account forms and applications. For example, if you have a regular share account and an Individual Retirement Account (IRA) at the same credit union, the regular share account is insured up to $100,000 and the IRA is separately insured up to $250,000. However, if you have a regular share account, a share certificate, and a share draft account, all in your own name, you will not have additional coverage. Those accounts will be added together and insured up to $100,000 as your individual account. Additionally, shares denominated in foreign currencies are insured as outlined in NCUA Rules and Regulations.

Coverdell Education Saving Accounts, formerly education IRAs, are insured as irrevocable trust accounts and will be added to a member’s other irrevocable trust accounts and insured up to the SMSIA. Roth IRAs will be added together with traditional IRAs and insured up to $250,000.

Additional coverage is available on revocable trust or payable on death accounts. You can now name a parent or sibling as a beneficiary to get separate coverage. Previously, beneficiaries had to be a spouse, child or grandchild.

For more information on how your accounts are insured, click here.

As you’re walking through the checkout line at the grocery store or handing over your credit card for that $70.00 tank of gas, you may be wondering if we as consumers are better or worse off than we were say 5 or 10 years ago?

We wondered too, and did a little research.

We found a great website: Measuring Worth, which published by the Institute for the Measurement of Worth, a nonprofit whose mission it is to “make available to the public the highest quality and most reliable historical data on important economic aggregates, with particular emphasis on nominal measures.”

Basically, to tell us how much things are worth today compared to yesterday.

The site has some excellent calculators that can tell you everything from the relative values of the US dollar to annualized growth rates to purchasing power and more. You’ll find everything you ever wanted to know and more about how much your dollars are worth.

For fun, we used the Measuring Worth calculators to see how much money you would need today in order to have the equivalent of $100 say 5, 10, 25 and 50 years ago? (According to the site, current data is not yet available for 2008, but we can still compare recent 2007 figures to historical ones.)

Here are the numbers. To have the same “purchase power” as $100 just

• 5 years ago, you would need $115.25 in the year 2007
• 10 years ago, you would need $129.19 in the year 2007
• 25 years ago, you would need $214.86 in the year 2007
• 50 years ago, you would need $736.56 in the year 2007

For more information on how the “Purchase Power of Money” is computed, or if you want to read more about the changing value of money, go to www.measuringworth.com.

Are you feeling the squeeze? We want to know. Leave us your comments on how far you feel your money goes today compared to 5 years ago.