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“Your retirement . . . . knowledge and planning will get you there sooner”
Are you on target, go to the following link and learn more about what to expect
https://sites.cunamutual.com/cmg/media/00025680.pdf
Depending on your point of view, car dealers are an annoyance or in the worst case, certainly not your friend. We all need autos so what’s the best way to buy a car? Educating yourself should be your top priority before buying a new or used vehicle.
A word about car dealers . . . .
Sure, the dealer needs to make a profit, however, some auto sales staff can be overly aggressive and may even gouge unsuspecting buyers. So take control of the buying opportunity and be an educated and sharp shopper.
Dealers just don’t sell cars; they sell financing and insurance products. The market has become so competitive that just selling cars isn’t enough for the dealer to survive. The “real money” is not in selling the car but in selling the related insurance products. In fact, dealers frequently make more profit from the sale of related insurance products such as Mechanical Breakdown (if your car breaks down), credit life and disability (If you die or become disabled the insurance pays the loan), and GAP (if your car is totaled, you won’t owe the lender a deficiency balance).
Let’s start with terms you should know.
Manufactured Suggested Retail Price (MSRP). This is the retail price of the auto. Who pays retail at the dealer? Nobody does. The dealer starts high then will offer the buyer a “discount” so the buyer feels he is getting a deal.
Dealer invoice. The invoice is the dealer’s cost from the manufacture. Invoice typically includes an additional 2% or 3% called holdback. A holdback is an extra rebate from the manufacture to the dealer. The manufacture refunds the dealer for the holdback after the car has been sold. You won’t see holdback listed anywhere on the invoice and the dealer certainly won’t tell you about it. Simply, holdback is more profit to the dealer. Frequently, you will see dealers advertise cars “at invoice or $100 above invoice” which includes the additional 2-3% profit from holdback.
Can I see the dealer’s invoice? No, most dealers don’t share this information. The credit union can help, so call us.
Other incentives
There is a whole list of other incentives or dealer credits including reserves for interest and flooring costs, advertising and others. These all contribute to the dealer’s profit. Don’t try to negotiate these items. Your salesman won’t know.
Pre-approval. Pre-approval means that members are pre-qualified by the credit union to buy the car before walking into the dealer.
KaiPerm Tip: When you are pre-approved, you become a cash buyer. And that’s a good thing. The dealer knows you are serious and won’t have to worry whether you qualify for a loan.
Buried, upside down or negative equity. These terms refer to the value of your trade-in. Being negative means that you owe the credit union more than the value of the vehicle. If your trade-in is being financed, you’ll need two pieces of information before going to the dealer; your loan payoff and what’s the value of your car.
KaiPerm Tip: First, always negotiate as if you do not have a trade-in. Frequently, it is better to sell the vehicle yourself; if you are uncomfortable then call KaiPerm. We’ll let you know what your car’s trade-in value is – so you can negotiate better with the dealer. Remember, that your family treasure “Old Betsy” may not be worth as much as you think. So be realistic as to your trade-in and its value.
Rebates. A rebate is a refund from the manufacture paid to you either as a down payment or separate check. Check the manufacture’s website in advance to see if the vehicle you want to buy is eligible for a manufacture’s rebate.
How to finance
If you must finance a depreciating asset (like your car), it’s wise to put down at least 20% of the sales price. The down payment will lower your monthly payment. It also means that you won’t owe more on your car is worth. Plus, a down payment will allow you to have room in your budget to pay for maintenance, gas, insurance and tires, etc. Try to keep the loan repayment at 48 months or less.
KaiPerm Tip: A good rule of thumb is to make sure your monthly payment is no more than 10% of your gross income. In some cases, KaiPerm will finance 100% of the purchase price.
Get pre-approved and avoid dealer financing. Dealers frequently won’t guide you to the best interest rate you can get. The dealer’s “finance and insurance” man will sell you payments and not the interest rate. The higher the interest rate the more money the financing company makes. And the dealership often receives a kickback from the financing company for sending a high rate loan to them. On the other hand, if the interest rate is too good to be true then be wary. The dealer may offer you a low interest rate then try to sell you a car at full MSRP. The dealer may not be able to lower the sales price because the manufacture is offering such a low interest rate. Avoid the hassle and finance at the credit union.
KaiPerm Tips:
· Get pre-approved before you buy. Pre-approval will also “slow down” impulse buying which dealer’s love to see and where consumers typically have buyer’s remorse.
· Do your homework. Find out in advance what your trade-in is worth. Search out how much will my new car depreciate. How reliable and safe is the car that I want to buy? And make sure to call the credit union with help on determining dealer invoice.
· Buy insurances/add on protection products from the credit union. We offer good quality products and far lower prices on Mechanical Breakdown Insurance (MBI), credit life and disability and GAP insurance.
A final word . . . . .
· Do business with KaiPerm; your trusted auto lender and source of reliable information. We’ll help make your auto buying experience much more fun.
PLACEHOLDER
This question is one of the most frequently asked by members. Credit scoring is a closely guarded and proprietary product. Fair Isaac owns the rights to a credit scoring model called FICO. It is used by credit reporting agencies and tells a lender how likely a person is to repay a loan and make payments on time. Simply, scoring identifies risk.
Is your credit score important? Yes, it is, but it is not the only aspect of the credit decision process made by credit granting companies. Lenders look at a variety of information such as your employment, ability to repay the loan, collateral and the current economic environment.
Here's a brief summary of FICO score factors and estimated percentage of your score in the category
Payment history 35%
Have you repaid prior obligations such as credit cards, installment (auto) and real estate loans?
Public records include collections, judgments and bankruptcy?
How late are your payments - 30-60-90 or more past due?
How many accounts have good payment history?
Amounts owed 30%
Owing a large amount of money may indicate that you are overextended.
The amounts owed on different accounts including credit cards or auto installment loans.
The number of accounts that have a balance; a high number indicates possible over-extension.
How many accounts have a balance; again, a high number raises concerns
Have your installment loans been paid down?
How long have your accounts been opened?
Length of credit history 15%
How long have your credit accounts been established, in general?
How long has it been since you used certain accounts?
How long have specific credit accounts been established?
New Credit 10%
How many new accounts do you have?
How recent have the accounts been opened?
Do you have an excessive amount of credit inquiries by credit firm?
Types of credit 10%
A good mix of credit accounts is good; too much of one type can be problematic.
Summary
Credit scores from each credit report agency only considers data in your credit report history. The range of credit scores
typically is 300 - 850. And remember, the higher the score, the lower the risk. There is no single "cutoff" score that is
used by lenders.
KaiPerm uses several other factors in the credit decision process. For one, your relationship with the credit union is very
important. Direct Advantage members, for example, receive a two percent discount from the normal stated interest rate on
credit union loans!
Importantly, the credit union does not "risk rate" borrowers. Members receive the same interest rate; KaiPerm is a cooperative
and it's our philosophy that all members receive competitive rates on their loans.
Need help or have questions, give us a call. We are here for you and to help you Get Ahead Financially.
Recent newspaper articles and internet posts are educating consumers about the safety of their financial institution. Non-performing loans, poor investments and low net worth ratios all combine for real concerns about the financial services sector.
KaiPerm’s Board of Directors and management want to assure its members that your credit union is doing well. Sure, there are challenges in this economy. And, in some ways, KaiPerm mirrors what our members are doing to survive this difficult economy. The credit union is watching expenses, limiting capital expenditures to a minimum and keeping excess cash working with a conservative and prudent investment strategy. At the same time, KaiPerm is making loans. In fact, our philosophy has always been to look for ways to make loans to our members.
How safe is KaiPerm NW Federal Credit Union
KaiPerm is a well capitalized federally insured credit union. Your funds are safe and insured up to $250,000 for individuals by an agency of the federal government, the National Credit Union Administration. Deposits can be structured to be federally insured up to $1 million for a family of four. In addition, your retirement funds are also federally insured to up $250,000.
Why are some credit unions discouraging deposits?
A recent Oregonian newspaper article cited a local credit union which asked members to take “investment money” elsewhere. Why would any financial institution do such a thing? Some credit unions are employing a “withdrawal strategy” to reduce the amount of deposits. Frequently, higher paying certificate of deposits are used to fund loan requests. In a turbulent environment, demand for loans is low – so there is not a need to keep high paying certificates or other member deposits to fund loans.
Another primary reason for reducing deposits is to improve the financial institution’s net worth ratio. Net worth is the ratio of reserves (numerator) to assets (denominator). By lowering assets, the financial institution improves its net worth ratio. Net worth is a key ratio used by bank and credit union regulators to determine the soundness of a financial institution.
Is KaiPerm making loans?
Yes, the credit union is actively making loans. That’s what we do (along with taking in member deposits). KaiPerm’s loan service levels are excellent. The credit union has not had to cut back employee hours, furlough employees or lay off anyone. Loan rates are very competitive and we provide one-day service for consumer loans and two week service for real estate transactions.
Another benefit of KaiPerm membership is that our loans are priced the same for all members for Direct Advantage (DA) members. There are no “risk rated” interest rates because of a low credit score! Your credit union is a not-for-profit financial cooperative so members all receive the value of low rate loans.
It's already tax time again!
Wow, where did the year go? KaiPerm can help you start preparing for the 2009 tax season. There is good news and some tax breaks to consider for 2009. Check these suggestions out. And, of course, talk with an advisor first before making any tax related decisions.
• First time homebuyers - The first time homeowner tax credit has been extended. Just keep your new home (primary residence) for three years and the credit does not have to be repaid. Talk with your tax preparer for specifics. Note: See KaiPerm for your home loan. Your credit union has competitive rates and super service. With home prices low, it may be a good time for you to buy.
• Unemployment benefits - If you received unemployment benefits in 2009, the first $2,400 is exempt from federal taxes.
• Use your KaiPerm credit card to make a charitable donation in 2009 even if you don't pay the bill until 2010.
• Medical expenses are deductible if they exceed 7.5% of your adjusted gross income. If you are close to the 7.5% threshold, consider scheduling and paying for the necessary medical procedure before December 31, 2009.
• Cash gifts - You can give up to $13,000 per person to any number of individuals in 2009 without having to file a gift tax return. The limit is $26,000 if you are married and the gift is from you and your spouse. Talk with your tax advisor to make sure you do it right. Note: Why not use a credit union account to set up the gift deposit?
• College expenses - Are you a parent with college students? You can claim up to $2,500 a year to cover higher-education expenses. Note: Now is a great time to open a checking account for your college student.
401K tax tips - don't cash out
• It has been reported that forty six percent of workers who changed or lost their jobs took cash from their 401K plans. An employee who cashes out a $5,000 retirement balance at age 25 would receive a check for $3,500 after taxes and penalties. If left in the account, the $5,000 may grow to $75,000 at normal retirement over 40 years at 7%. A recent study stated that 17% of workers who changed jobs and took money from their 401K spent it on items like cars, boats or everyday expenses.
Overdraft programs are a standard product offered by all financial institutions. Several major banks (Bank of America, Chase, US Bank, Wells Fargo), however, are being pressured by Congress to change the way they charge customers for overdraft items. Consumers have had enough!
These banks are now limiting the amount they'll charge you and how they pay overdrafts. Well, it's about time. But why do business with a financial institution which program is still COSTLY and that has been overcharging you for years?
Overdrafts occur when a checking account is accidentally overdrawn . . . . it happens. Not all overdraft programs are bad. You just need to know the difference between overdraft programs. After all, no one wants to be embarrassed at the check register when their check or debit card is not honored.
Now is a good time to move your accounts to KaiPerm. You become an owner so you know you will be treated fairly. And you can talk with a real person who will provide you a host of options if you are having financial challenges.
Make the move to KaiPerm today. Do business with a full service financial institution that treats its members right the first time!
Women in the work force; where do you stand in retirement?
The US Census Bureau provides some interesting facts;
So what does this mean to female employees in the workforce and planning for retirement;
Here are some suggestions to get you started or improve your situation;
More help;
Go to these websites
Need financial counseling? Call KaiPerm. We can you get started, set up a plan and help you reach your financial goals.
Good luck!
We've all laughed at the saying "I'm from the government and here to help you". But in the case of the Social Security Administration, it is true. And for women, there is especially great news. The agency has a separate website just for you!
First of all, you need to have a basic understanding of what this federal agency can do for you. Social security has provided a great handbook titled "Social Security: What Every Woman Should Know". It is a good primer with back to basics information. Go to the Social Security Administration website www.socialsecurity.gov/pubs/10127.html to print a copy. Or go to your nearest social security office to pickup a copy of the 23 page booklet. It is extremely helpful.
Did you know . . . .
More information . . . . Social Security for Women
Go to: www.socialsecurity.gov/women
Articles include:
Don't outlive your retirement savings
In light of recent headlines, I get a lot of questions about sub-prime mortgages. Let me start by stating that your board of directors and management do not believe in risking the member's money on sub-prime loans. That said, there are still some members who may have fallen into the trap of an ARM (Adjustable Rate Mortgage) when the economy was good and are now having trouble making payments. Maybe they're trying to sell their home with no luck.
My advice is this: Try to refinance with us. If your credit is clean, there's a good chance we can help you reduce your payments and get you out of trouble. If that's not an option, then we may be able to introduce you to a reputable lender that helps families with tarnished credit. But whatever you choose, be sure to call or stop by the branch soon. We'll be ready with other home loan alternatives and counseling options that may help you get ahead financially.
One of our more frequently asked questions is: who at Kaiser Permanente can I talk to about the credit union? It just so happens we have a small army of enthusiastic KaiPerm representatives who also work at Kaiser Permanente. If you work for Kaiser, one of your peers has the paperwork and answers you need. To find the KaiPerm rep near you, visit the Credit Union Reps/Kaiser Reps page on our site.
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