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The Clark Howard Podcast
07.17.26 Clark Answers His Critics on Clark Stinks / Your Car’s Longevity
00:36:03
Clark Stinks! & How Long Should You Hold On to Your Car?
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- [00:01]
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- [00:35]
Clark Howard
I'm so glad you're with us here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. You know it's Friday and you know I look forward to my summer weekends. Do I ever. Well, there's something I look forward to almost as much. Our weekly Clark Stinks episode. I'm going to learn from you straight ahead. And later, Americans are holding on to their vehicles the longest ever. Ever. Is that a good idea for you too? Let's talk that through coming up later. But right now it's time for Clark Stinks. I should have never encouraged you to speak. You almost think I'm pretty stupid.
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Clark Stinks Listener
You should be ashamed of yourself.
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Advertisement Voice
Well, maybe I'm wrong.
- [01:29]
Clark Stinks Listener
Maybe I'm wrong.
- [01:30]
Clark Howard
Maybe you're right, pal. So what you got to start with?
- [01:37]
Clark Stinks Listener
I'm going to start with Doris in Arizona. Doris says clark, you smell like a beautiful rose that has sat in the vase just a tad too long. You recently responded to a young adult's question about obtaining a travel credit card with with the advice to get the Capital One Venture X. While this is a great card, it would be much better to get the Venture card first. If you get the Venture X before the venture, you will become ineligible for the signup bonus on the Venture. This card lineup requires you to get them in a certain order in order to maximize signup bonuses.
- [02:07]
Clark Howard
I appreciate that. So the reason I I was in that case jumping directly to Venture X is somebody who wanted to travel few times a year or more. And the benefits of the Venture X. Of course you got the sign up bonus with either and starting off with it's like Chase does that with the Preferred and then tries to graduate people into the reserve and Capital One does it with the Venture and then hopes you graduate to the Venture X. So on the bonus thing you're right. But the benefit I think is good enough with the Venture X for somebody who already plans to travel several times a year that I would Go straight to it. And again, for people who think I've lost my mind, encouraging somebody to get a card with a $395 annual fee, the way this card is set up, it actually becomes, for somebody who travels even just a couple times a year, a net negative $5 a year annual fee.
- [03:20]
Clark Stinks Listener
Mike in Florida says recently Clark described the current inflation bout as perhaps worse than the one in 2021, 2022. The data disagrees. The CPI inflation peaked at a whopping 9.1% year over year in June of 22. The highest rate so far this year is just 4.25%. Also, with oil falling big from April, the real time inflation measures have declined substantially in the past two months.
- [03:47]
Clark Howard
Mike, thank you. So it is true that the spike in inflation back in 2122 hit that peak of the 9%. That was brutal. And this one is, by comparison, seemingly much lower. This one's an unforced error. We were in a position where we were trending towards the preferred measure of about 2%. And economists have this philosophy about why a 2% inflation rate is really good for an economy. The problem with this 4.25, it's not just the fuel price. There's an underlying amount of inflationary pressure that's due to extreme federal spending deficit spending in addition to the temporary effects from the Iran war. So the inflation today to me, is more threatening because it's becoming underlying. Where the inflation that happened during COVID was because of excessive demand over supply, it was because of the disruptions in factories and other things during COVID Jeff
- [05:06]
Clark Stinks Listener
in Pennsylvania says, this isn't so much about Clark himself, because I don't think he stinks. I just think the podcast theme song stinks on ice. When I hear it, I get the feeling that a cheesy game show is about to start. I keep thinking about Supermarket Sweep from the 1980s. I just think the Clark Howard show is so much better than the theme song.
- [05:25]
Clark Howard
What do you think of that?
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Clark Stinks Listener
I don't know. I think we should let the Clarky speak. Okay, we'll do a poll or something.
- [05:31]
Clark Howard
So I, you know, it's funny, I know so little about music, and so I'm not qualified to give an opinion on that, but thank you.
- [05:41]
Clark Stinks Listener
Scott in Idaho says, Clark, you stink. You stink so bad that I think your famous Costco clearance polo shirts are starting to absorb the odor.
- [05:49]
Clark Howard
This is from Sam's Club.
- [05:51]
Clark Stinks Listener
Every week on the podcast, you share so many ways to save money, and then one day you talk about the dangers of spaving spending money just to save money on things we don't actually need. Once I thought about this more, I realized something. Clark, you and your team are my primary supplier. You can't say spaving is bad when your team sends out the Amazing Clark Deals email to my inbox every day. I'm just trying to be a good Clarky. But then I open your email and suddenly I'm convinced that buying a refurbished 12 pack of Smart Plugs and a pair of Gore Tex hiking shoes I didn't know existed is saving me $80. Thank you for all the ways you help me save money and spave money.
- [06:29]
Clark Howard
Well Scott, I'm glad you saved money, but I don't want you spaving. I don't want you buying things you don't need. Or especially for someone who can't afford to buy the things that we have on Clark Deals. But Clark Deals is all about not wasting your time and showing deals that are real deals, not non deal deals. But yeah, there is always the risk that somebody sees, oh, look at that bargain they have on Clark Deals. I'm going to buy that and then it ends up in a closet or whatever.
- [07:02]
Clark Stinks Listener
Mike in Michigan says Clark and Krista are the biggest pair of sweaty gym socks when they were drooling over a 32 and 29 year old $625,000 net worth. Yes, impressive. But it's obviously the value of their home that they bought before the giant run up. Otherwise they'd say how much they had invested. Clark went so far as to offer them a compound interest calculator to bathe in their future riches. Except homes don't compound like the market does. This is the problem with net worth versus invested assets. But that's the whole field of personal finance sticking it up.
- [07:35]
Clark Howard
Thank you very much for that. And Mike, that's something I addressed many months ago, maybe last year is the underlying value of investable assets versus the house that you live in is that houses, the actual physical house you have depreciates over time. The underlying value of the land is what may rise over time or the location of that house. So houses do not have the ability over the long haul to increase in value at the compounded rate than investments that you're investing in. Companies that create a new product or service or supply the marketplace better than others create the profit stream that you ultimately benefit from. And for most of us it's not an individual stocks, it's from owning free enterprise. The people who take the risks that create the rewards. So it is true that Even though over my lifetime I've been a real estate investor and have owned a number of rental properties, most of where I've made my money is investing in capitalism, in investments that have grown at a much higher rate than the properties. But I believe there's advantages to to both. But your point is very well taken. If somebody's just sitting on paper profits in a house, that net worth is not as impressive as it would be if it was from regular contributions to a 401k Roth IRA or an investment account.
- [09:27]
Clark Stinks Listener
Brandon in California says Clark, you smell like the inside of my Covid mask. For all of your countless hours discussing the ins and outs of personal banking, you give remarkably short shrift to business banking. Small businesses are the lifeblood of this economy, and for millions of small business owners, many of whom listen to your show, their minds are consumed with every decision and challenge facing their business every day. None of your three favorite children offers business banking, which means small business owners are forced to use big banks with their high minimums and exorbitant fees, or small online banks that not many accept cash, may not be insured, or may have other limitations. Specifically, could you address how it would work to have a small feeder account for cashless transactions that is linked to the main account? You've proposed this idea for personal transactions using Venmo or Big Bad Zelle, and an idea that makes sense. But how would it work for business accounts? Would that smaller transitional account need to be a business account too? Should it be at the same institution? Thank you for all you do, but don't forget your small business owners. I wonder if we should do a segment on this in a future podcast instead of addressing it all now. What do you think?
- [10:34]
Clark Howard
Well, all right. So Brandon, as a business owner for as far back as I can go, the way businesses get ripped off on business banking accounts is just ridiculous. And there are some startups that you mentioned that are doing online business accounts, but it leaves that hole in the system. How do you handle cash deposits? I do want to address that, but ultimately if we can come up with a way to give a good advice about business checking, I'd love to do that. When you talk about a feeder account, yes, you would have to have an account at an institution where you can do deposits and then you link it to cash deposit and then you link it to your much more important account that doesn't have all the fees. Now where do I do my business banking? I do it at Charles Schwab because I have no fees and I can earn decent money on cash that we don't have needs for cash flow for the business at a time. And so I've been able to make that work. But we don't take any cash deposits so it's easier and streamlined for me. But this is Brandon, A terrible problem is that small businesses in particular are really treated terribly by the banking system.
- [12:07]
Clark Stinks Listener
Yep. Okay. Brent in Georgia says just a touch smelly here. When you got justifiably ragey regarding Zelle recently, someone lamented that he sent the wrong recipient a large amount via Zelle and you basically told him that he was sold. I use Venmo from time to time, never Zell, thanks to you. But when I send a large amount, I first send a small token amount for which I do not disclose to the recipient. Before I send you $500 for your favorite charity, I would first send you a token amount, say 44 cents. Then I ask you how much you received. If you answer correctly, only then do I send you the larger amount. I do this for each new recipient to whom I'm sending a large amount, ensuring I'm sending to the correct person. I hope this saves someone from wasting their hard earned cash.
- [12:52]
Clark Howard
Brent, I love that suggestion. I mean that's brilliant. You think about how many organizations do that when you're setting up initially a relationship with them and they'll send you two small deposits, usually like 12 cents, 8 cents, whatever, and they ask you identify the amounts you received, then they know they have a proper link to an account and then they send money. Your idea is excellent.
- [13:22]
Clark Stinks Listener
Okay, Hamong and Georgia says hello Clark, because of the World cup, instead of saying you stink, I'm going to issue you a yellow card. On more than one occasion you have told listeners that they can upload their medical bills or loan documents to Chat GPT or equivalent large language models LLMs to spot medical billing errors or better understand loan terms. These documents contain your HIPAA and personally identifiable information, which is PII. Public versions of these LLMs such as ChatGPT do not conform to HIPAA or PII compliance needs. So when you upload your medical bills or other documents, you're also giving access to your personal information to these public LLMs. That is dangerous. A better way to do this is to redact your personal information before uploading. While ChatGPT et al are incredibly powerful tools, I always recommend people utilize them using caution to ensure you're not giving away or publishing your personal info to these tech companies and to the world.
- [14:25]
Clark Howard
That is an absolutely great suggestion and we've talked before about the HIPAA compliance problems with any of the AI assistants. Your suggestion as a way to deal with the lack of HIPAA compliance is really smart and is exactly These last two are exactly why we do Clark Stinks. Think about among what you have done with what you've said, Brent with what you have said. Both of you are adding to the pool of knowledge that benefits you, your fellow listener, your fellow viewer, and helps me do a better job at what I do. Thank you so very much and I appreciate when you tell me I didn't do a good job about something and you share your point of view. When you share something that would make what I've said better or forces me to correct something that is in my mind is the right way to answer something and you say that's wrong. This is what you should be saying. I learned so much from you. We all learn from each other and it's so important that we take the opportunity to listen to each other and learn from each other. And so if you have something you think I should know or that you feel there's a better way for me to answer something, please go to clark.com clarkstinks and let me know. Coming up ahead, the car business is in a weird place right now and I want to talk about that aging vehicle you might be driving around in and you're wondering, is this a good idea?
- [16:23]
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- [17:32]
Clark Howard
States is in the weirdest place. Automakers used to try to hit a balance of units sold and an average selling price that allowed them to have a certain amount of market share and to bring in so much net revenue. But the automakers in the United States, they're kind of running like pack animals. And they have decided that they're not going to fight market share. They don't care about that anymore. And all they care about is gross margin per vehicle. So automakers are happy to sell quite a bit fewer vehicles than they used to, because what they're trying to do is create shortage in the marketplace and allow the price of a new vehicle to be pushed up much higher. Now, what's interesting today is they're absolutely engaged in a form of price fixing, but price fixing not in the way that would be normally considered to be highly illegal. And that's meeting secretly, parceling up the market and setting the prices. Things are much more sophisticated now. And there's nothing in the law that accounts for what's going on today. The automakers collectively have decided, no, okay, so we're not going to sell as many. That's too bad. But the ones we're going to sell, because everybody else is doing the same thing, we're all going to push these prices up to an average vehicle price, plus or minus 50 grand. So a lot of people are looking at vehicles and they're saying, I'm not buying anything. Look how much they want for it. I'm not doing that. Now, I have a little bit of good news on the used vehicle front. It's a business news story that may not have made it where you've seen it, but Hertz just had the biggest one day drop in its stock price since they came out of bankruptcy. Huge decline. And it's because they disclose that their vehicles are depreciating now quicker than their finance people thought they would. And when they finish with a used vehicle that's been in their rental fleet and they're selling it into the wholesale market, excuse me, it's now bringing quite a bit less than they had budgeted for. There is now softness that has not been there in forever in the used vehicle market. And that's because used vehicles, because new vehicles went up so much in price, used vehicles went up to a point where many of them became not affordable. So we're now at a point that people are on buyer strikes. They're not buying new, they're not buying used. They're letting those vehicles age. And the good news is that vehicles are aging so much better than they used to and the average age keeps getting older and older. So if you're thinking, you know what, I'm just going to keep driving what I'm driving, that is turning out to be a good decision. You know, the funny thing about this is America used to be different than the rest of the world, that we kept our vehicles a much shorter time than people did elsewhere in the world. I mean, it was unusual in much of the world for people to have a vehicle that they got rid of before it was double digits in age. Most of the world, people kept a vehicle well past 10 years. Today in the United States, we're above 12 years, 13 right in there. Average age of a vehicle. It's a lucky 13 in this case. So Americans historically tired of a car before the car was tired. So with your vehicle, what's the point at which you say I cry uncle? My math is different than a lot of other people's. I'm more green light on getting rid of an older vehicle. When the cost of repairing it to keep it on the road exceeds 50% of the remaining value of the vehicle, that's when I think that's the green light to dump it. I know that Consumer Reports, among others, says that when the cost of repairs exceeds the remaining value of the vehicle, that's when you dump it. Why have I said 50%? The reason is, is that if a vehicle is really starting to tire out and is starting to have significant repairs, you're getting close to the point where you could throw good money after bad, that you do a repair and you think you're good and then the thing breaks again something else and you're looking at money. But the point is most people ditch a vehicle when it has its first major repair. But that major repair could represent a relatively small percent of the value remaining in the vehicle. So that's why I use 50% above 50% as a tipping point. Just my thought. And do you know this era we're in with the automakers all conspiring through, not through a smoke filled room, but conspiring through knowledge of each other and all signaling the same kind of corporate actions eventually runs out of steam and someone will be the disruptor. Someone will come in and start trying to take market share with more affordable vehicles. I mean, there's this bizarro one that the Amazon founder is doing for the $25,000 pickup truck. Have you seen is bare bones as could be, has crank windows. And I read recently it originally wasn't Going to have air conditioning. And they found out that nobody was going to buy it if it didn't have air. People didn't mind that. Crank windows. It doesn't even come with a sound system in it. Oh, wow. Because they figure people will put their phone in there and use music on their phone, navigation on their phone, that sort of thing. And I think that's pretty smart. But what'll be interesting to see is if we're like the Europeans where there's enormous numbers of very affordable vehicles now sold in Europe as new vehicles that are reliable and dependable. We don't have that spirit right now in the United States, but I expect it will come.
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Clark Stinks Listener
Okay. Russell in Florida says Clark. My wife and I are 32, both work from home and have a $350,000 household income.
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Clark Howard
Wow, that's a great income.
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Clark Stinks Listener
We have $78,000 in liquid savings, 112,000 in brokerage index funds and 392,000 in retirement. We own an $850,000 home in Florida with 450,000 in equity. We drive very limited miles.
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Clark Howard
You're throwing a lot of numbers at me.
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Clark Stinks Listener
I'm sorry.
- [25:06]
Clark Howard
Trying to absorb them.
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Clark Stinks Listener
I think that's it. Well, not quite. We drive very limited miles, but our paid off 2019 Hyundai Electra and Mazda CX5 feel incredibly cramped. With our one year old's car seat and gear, we frequently face a cargo space crunch for our outdoor lifestyle. Kayaks, bikes, road trips and have a small chance of a mountain state relocation soon. I feel massive guilt buying a full size truck since we don't need it to commute but we desperately want the family utility. Is buying a truck a bad idea from a work from home household? If we buy, I'm looking at a near new 2025 Ford Gold certified pre owned truck for $44,000 out the door. Trading our Elantra for 9,500 plus $10,000 cash down. Do you want all this information? Is this too much?
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Clark Howard
Keep going. I'm trying to absorb it all at
- [25:56]
Clark Stinks Listener
4.79% for 36 months. Finally, our home eventually needs a $35,000 master bathroom model as it's original to the home and we were considering doing this in the next one to two years. So I feel like Russell wants you to approve or disapprove of this truck purchase.
- [26:16]
Clark Howard
So I know what it's like, you know, with when children come in the household and suddenly you feel like you don't have enough room. The decisions are really not about having a one year old because you got room for you and your child. What you don't have room for is all the sports gear and all that. So I would actually make a different suggestion, particularly since you have the bathroom remodel coming up. I would buy what we used to call a beater vehicle, a beater truck, a beat up older one that you. Since this vehicle would be more a player just for weekend fun from what you said, you're gonna do kayaks, bikes, that kind of thing. Forget the road trip for a minute and you buy an older one with good number of miles on it and it becomes a third vehicle is better than you every day driving a big pickup truck that you haven't even said how many miles are on it. You're going to have this new obligation paying a loan for three years. Good. It's only three years. But with the income you have, I'd like you saving more money and I'd like you instead of spending money on that. I want you putting money aside now to do the bathroom remodel you want to do. I want you to not have this debt and then take on other debt for the bathroom remodel. I'd rather you spend. You were going to take ten grand to put down on this. I'd rather you find an old dumpy pickup truck that you can use for your recreational activities and that you take money that you would have put towards that and you start putting it into your money that's going to go towards the bathroom remodel. You are so privileged as a couple to have this incredible income. So you should be able to pay for these kind of things from your income source and not have to borrow money for it. So I know that's not what you wanted me to say, but I really feel like I can't greenlight you taking on debt with the idea of taking on more debt in a year or two for the bathroom.
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Clark Stinks Listener
Kristen in Georgia says my adult daughter received a $50 check. That quote represents an accident benefit payment from. Do you want me to name the company here?
- [28:47]
Clark Howard
Oh, I know them very well. You can name them.
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Clark Stinks Listener
I think it's pronounced unum.
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Clark Howard
Yeah.
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Clark Stinks Listener
This was an unsolicited check and she has not been in any type of accident or filed a claim. It goes on to instruct her that she can create an account through their website. A letter with additional details regarding your approval is available through this secure portal. If she goes to that website. Is this a sc. Scam?
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Clark Howard
No, Unum is completely. Unum. Unum. It's completely legit. They are A company that historically sold a lot of various insurance products. They especially specialize in particular industries. They were big on selling various insurance products to doctors and other medical professionals. But they do a bunch of different things. And they could be the administrator for something that your daughter is owed money for from some kind of settlement. There's no harm because it's completely legitimate organization. Going to their website, looking at the claims thing, seeing if there is actually a legitimate 50 bucks and it may be something like, oh, yeah, I did that. I didn't know I got ripped off in any way and get your money. There is no fake kind of thing, solicitations out there that we've heard of with anybody pretending to be unum. Because the thing is, nobody in the general public's ever heard of them anyway, so it would be a bad name to use for a scam.
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Clark Stinks Listener
Lisa in Texas says, Clark, I messed up big time. You answered my question last month, but unfortunately I made a bad financial decision the day before I heard your answer. I'm the one whose daughter and family moved to Texas and they wanted to buy a house in our neighborhood, but could not buy it until their current house is sold. I told them I would buy the house in our neighborhood, and then when their house sells, they can pay me back. You suggested instead they buy the house and then I could act as the lender. That would have made things so much easier. I usually do research before I make major decisions, but.
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Clark Howard
Okay, let me stop you right now. All right, first things first, Lisa, what you. What you're going to lay out for me was out of love, and you're beating yourself up and don't do this. We're going to just talk it through and everything's going to be fine from here.
- [31:08]
Clark Stinks Listener
Lisa says, I usually do my research before I make major decisions, but I let my emotions and pressure of getting the house quickly get the best of me, and I ended up purchasing the house with the money in my brokerage account, which will cause about a $16,000 tax hit. Is there anything I can do now so I don't have such a big tax bill next April? Do you know if there would be a preferred way for them to buy the house from me once their house sells? Or are there any issues if their house takes a long time to sell? I've had a lot of sleepless nights because of this stupid decision I made. But I'm trying to look at the bright side, that my young grandkids are in their forever home just right down the street. I'm Hoping my favorite financial guy can help guide me out of this.
- [31:51]
Clark Howard
I could tell from the. That's why I stopped you. I could tell. Lisa, you're beating yourself up. Please, please be compassionate towards yourself as you are for others. Don't lose sleep over this. You did something loving, kind, caring. You got your kid, your grandkids by you and stupid decision that is. That's a terrible term to use for this. Was there a way I thought might be a little better? Yeah. Stupid.
- [32:27]
Indeed Advertiser
No.
- [32:28]
Clark Howard
So what do we do from here? Let's look at it in steps. All right. The $16,000 tax hit. You may be able to do what's known as tax loss harvesting to counterbalance it. It's where you sell some things that you have losses in that you use to offset the gain that's causing you to have the $16,000 capital gains. And so you can offset some of that. And then you, to avoid something known as the wash rule, you just have to wait more than a month, 31 days, let's say 32 days, to go back into whatever it is you harvested the loss from. And if you talk to your accountant, if you have one, he or she will be able to explain to you how you can counter that $16,000 tax by using some losses to offset it. Second thing, all you're going to do is you're going to sell the house to them. When their old house sells, everything's going to be fine. You're likely to have minimal tax implications from the purchase and the sale as long as their house sells in a reasonable amount of time. And when the time comes, you talk to a real estate attorney about the best way to handle the sale from you to your family. So please, please, please, when I give advice is my opinion. And it can be a situation where the direction I think is best. But do not beat yourself up because you did something that accomplished something you really wanted in your life and it's all going to be fine. Just remember when you see your grandkids, that's what's important. On that note, that's it for us for this week on the podcast and YouTube show. And I hope that we were helpful to you, we gave you some stuff you could put to work in your life and that you have a wonderful weekend ahead of you. And remember, we're here for you all weekend long@clark.com and clarkdeals.com with more empowerment, which is what we're about, empowerment through knowledge, so you can save more, spend less, and avoid getting ripped off. We'll see you on Monday.
- [35:09]
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