Listener (7:03)

I think, I think no.

Clark Howard (7:05)

Okay. I think, I think no.

Listener (7:08)

Lawrence in Texas says I'm going to Singapore and Thailand in May. I need a newer phone soon and I was wondering if I would be able to get a better price in Thailand on the same model. Whether it's a Samsung, iPhone, etc.

Clark Howard (7:21)

My experience, no. I looked last year at electronics prices. My son and I went and looked two different places because he thought he'd find a bargain and they were actually more expensive than they were here in the United States.

Listener (7:36)

So when the electricity like wouldn't that be different?

Clark Howard (7:39)

Like that doesn't matter.

Listener (7:40)

It doesn't matter.

Clark Howard (7:40)

It doesn't matter. It's just the phones were not a better deal there. There are a lot of Chinese brands that are what are called white label phones that if you're just looking for a rock gut cheap phone you can get phones so dirt cheap and in Thailand. But if you're looking for a brand name Samsung or iPhone, you're going to find your best deals here in the United States.

Listener (8:09)

Michael and Georgia says, I have been a member of a local based credit union for 32 years with a regular checking account and savings account. Several years back they offered a special program for the children of members to open savings accounts with the stated goal of encouraging kids to save for college and long term goals. I recently went back to check on the status of the accounts and was told by the credit union that they had a few months back closed both accounts due to inactivity. They took 100% of my kids savings account money through new monthly inactivity fees they initiated. We were not notified of these actions at all. I don't understand how they can do this. A minor savings account should not require reg activity and regardless my own account is certainly very active. I expect this from a monster mega bank but not my credit union and feel that they are not the customer oriented institution they were in the past. Do I have any recourse?

Clark Howard (9:02)

So Michael, first of all, you're not a customer. You're an owner. You're a member of that credit union. Your kids were members of that credit union until the credit union kicked them out. You've been with that credit union for a generation and a half, 32 years. And once a year there's an election of officers. You also can go to a meeting and speak at the meeting because this is wrong. This is not the way that your kids should be treated. If the whole idea was to encourage them ultimately that they would be lifelong members of a credit union and boot them out. I'm also curious how you could have never gotten statements that would have shown the balance declining month by month. The only way I could think that could happen is maybe you moved at some point in your kids young years. The statements stopped coming because of change of address. But definitely you don't deal with the bureaucracy at the credit union. You go talk at a meeting where members you may have to get on the agenda. But you want to bring this up because this is a credit union hurting itself and its future. And if those youth accounts no longer are worthwhile to the credit union, emptying them and kicking the kids out is a bad way to handle it. Obviously.

Listener (10:32)

Yeah. Joan in Illinois says I need post retirement advice, something I've not seen much of. What investment strategy would you advise for someone like me, a woman in her early 70s still working enough at my solo business to bring in a little self employed income? I downshifted substantially in the past couple of years, so it's now around 20,000 per year, which I plan to continue for a while. I've paid off mortgage, a good retirement based from Social Security and a small pension, employer based resources and other savings. I'm not terribly worried about running out of money as I age, but I would like to protect my assets and hopefully get moderate growth over the inflation rate. My first priority is financial security for me and my partner, also in his early 70s during our lifetime. But I hope to leave some money to cherished friends and worthy causes after I'm gone. What's a good strategy for investing cash savings beyond putting it into high yield savings accounts or CDs? For example, is there a reasonable percentage of cash that should be in index funds or elsewhere to generate growth? So you're not a financial planner?

Clark Howard (11:33)

Yeah. And you're asking me? I can only give this back at the envelope because the money you have in Savings accounts and CDs, all you're trying to do is basically keep up with inflation. That's all savings do. It's not investing. But you don't have your money at risk. You know, you, you put money in, you got a little bit more later for having put money in savings and CDs because of the fact you still have some income. You got the pension, you got Social Security, you've got this money in 401ks and IRA even in retirement. You need some amount of the money in the 401k IRA area in investments to help you overcome inflation's effects over time. Because you have these regular sources of income coming in. The money you've saved, that is in retirement accounts needs to be a portion of. A meaningful portion needs to be invested. Like even if it's just a third of it invested in a target retirement fund, since you're already semi retired, it would be a target retirement fund, let's say 2025. And that way they're managing in the fund. A certain amount of money is in stocks. The rest is in a variety of instruments like bonds, whatever. So the risk is lower. But you are still getting a return that hopefully will outrun inflation over the years. And who knows how many years that could be. You could live another 30 years. That's why having some amount of your money in stocks is still very valuable. And that's why I like a Target retirement fund current time 2025, because then it's managed for the rest of your life as if you are truly trying to preserve money and have it grow some as well. And that's where a Target retirement fund would come into the mix. So again, that's just back of the envelope, very, very general. If you wanted very specific, you could hire a fee only planner to look at what you've got and give you recommendations. And you're paying an hourly rate for that. We have suggestions how to do that@clark.com Coming up ahead. The car market has whiplashed on us again. Big changes in the car market, some I've addressed recently. I want to tell you how it's affecting people who already own cars. That's coming straight ahead.

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Clark Howard (16:29)

A perfect storm in so many ways with COVID The after effects linger to this day. One of the things that has been really distorted now for four years is the vehicle market, the car market. And I just saw a stat recently that was shocking. People who are trading in a car or vehicle to get something new, almost one in four are upside down in that vehicle they're trading in, meaning your loan is more than what the car is now worth. Because you got to think what happened if anybody bought a car during the COVID era, used or new. The prices you were having to pay were way inflated. And now, you know, cars depreciate over time. And values of used cars that were so, so inflated. Two years ago, you know, we had person after person saying, hey, this is a great country. I bought a car years ago and I just sold it used for more than what I paid for it When I got it, my oldest brother, Gary, he and his wife had a car they bought used, a Kia Sportage was what it was called. They bought it with like, I think it had 15,000 miles on it. They drove it for several years, sold it with 60,000 miles on it, and sold it for only a thousand less than they paid for it when they got it. I mean, the car market was crazy with what was going on with used car values. I'm not telling you anything. You don't know if you bought a used car or even new during the COVID cycle. So now the values are normalizing, which means they're going down. And so people get tired of the car they got, they dump it, trading it out on something else. And then what happens is you pay for the new vehicle, and your loan also has a transfer of what they call negative equity added into it is the upside down of the used vehicle you're getting rid of. So now you're making two payments every month. In that one, you're still paying off the vehicle you traded in, and you're paying for the new one you got or the newer used one you got. That's ugly. So what happens if you're upside down? As much as you'd like, those newer wheels or brand new wheels, if you're upside down and alone, you keep driving what you got. No fun. I know it's no fun, but cars are so much more reliable than they used to be. It used to be, you know, a car hit 100,000 miles, it was going to be nothing but trouble. Moving forward today, nothing but trouble starts more often at 200 or 250,000 miles on the odometer. Even if you're tired of it, it's not necessarily tired of you. And the best answer with negative equity is you keep driving. Now, on the other hand, if you're looking for a newer used car or vehicle right now, the reality is the prices have become much more favorable than they were. Even though loan rates are higher, the prices have been coming down so much shopping for something today is much more favorable. Recently, we covered how to buy a new vehicle now that you're in control in the marketplace, and so many dealer lots are just overwhelmed with cars coming in. They don't have customers for for new cars except a couple of brands. So you now have real pricing power in the market again. But again, don't be tempted by that if the vehicle you already have, you owe on it so much more than it's worth. Christa, I was talking to a guy just Last week, who was in a bad accident. His car was totaled. The other car was totaled. Both drivers were injured. Somebody blew through a red light, T boned him. He's. He's okay, has one cut healing on his head, but his wallet is not okay because he's so far upside down on his vehicle. So he's not going to be made whole. You know, the whole idea of insurance is to be made whole. And he was asking me about how's this whole gap insurance thing work. It doesn't even matter if it's the other party's fault. You're only paid what your vehicle is worth at the time that the accident happens. And the good news, both drivers will recover fully physically, but his wallet's going to be hurt.

Listener (21:32)

For a good gap insurance is something you buy when you're, when you're taking.

Clark Howard (21:37)

Out, if you're taking out a loan that's a long term loan, you're going to be upside down in your loan for pretty much the life of that loan. And so gap insurance is an additional expense that you can actually shop around for that covers that gap. So if you do have your vehicle stolen, not recovered or totaled in an accident, you're covered for that difference between the worth of the vehicle and, and that's down here in your loan. That's up there.

Listener (22:09)

All right, well, this one is very relevant from Solomon in Oregon. He says the inevitable happened. My 2018 Mitsubishi Outlander Sport with over 100,000 miles was repossessed by the bank. I'm okay with this because of my situation leading up to it. Now I have to wait to see what it will sell for and see what I owe. In the meantime, what are the best things I can do to rebuild from this? It's the first time I've had a car repossessed by the bank willingly.

Clark Howard (22:37)

So Solomon, this is really hard. And I'm not going to sugarcoat when they wholesale that Mitsubishi, it's going to be a low price they receive for it when they wholesale it out. So you're going to get billed some junk fees and that gap, normally if you don't have the money, you're going to have to work out a payment plan with them for it. And I don't know what else led to it. But I will tell you, if you bankruptcy attorneys tell you that many of the filings they do involve post repossession judgments that people suffer over a car repossession or SUV repossession, whatever. And so if you are prepared moving forward psychologically to Just pay for it. You can negotiate what the payout is and the total amount because any dollars they receive from you is more than they usually do when a vehicle is repossessed. You want whatever deal you reach, whatever payment plan, whatever total amount you'll pay, that must be in writing. And then whatever you agree to, you got to make the payments because otherwise the written agreement will allow a default judgment against you if you don't make the payments. And then you're back to square one owing a much bigger amount for you. If you need wheels going forward with that repo on your credit, what the smart move is to buy whatever junker car you can buy for whatever cash you can come up with and drive a car that you don't have a loan against to give your credit time to heal and your wallet time to heal. And Solomon, I'd love to hear from you later how you're doing financially.

Listener (24:34)

Okay. Chuck in Wisconsin says, my daughter lives in Manhattan without a vehicle and is moving to San Francisco and will be needing a car there. Are there typically price differences between New York City and San Francisco and Wisconsin when buying a car? Where would it be to her benefit to buy the car on the East Coast, west coast or in the middle?

Clark Howard (24:54)

So I love this question, Chuck, because what's happened with the car market? I don't know if your daughter wants to buy new or used, but especially in the new car market, there are significant differences from metro area to metro area depending on the competitive nature of a market. An example, if your daughter is going to live in the San Francisco Bay area and is going to want a fuel efficient vehicle, an electric vehicle, plug in, hybrid, hybrid, anything like that, that is so in demand on the west coast because of how expensive gasoline is on the West Coast. Electric or hybrid or plug in hybrid will be much cheaper back east or especially in the Midwest where you're talking about in Wisconsin, then it'll be on the West Coast. You then have to factor in, you got to get it out to the West Coast. And hybrids are very strong in the marketplace. Electric vehicles are very weak in the marketplace right now. And the price of new and used electric vehicles, in a lot of cases now below the cost of gas engine equivalents, with gas being five, six dollars a gallon in the Bay Area, there's a big advantage to buying, if you're interested in price, buying a used electric vehicle to have out there. Again, not buying it on the west coast unless there's a great rebate available in California, which could be a factor. So this is not an easy question to answer, but is best answered by using one of the car tools like Cargurus or Autotrader or something like that, and see what prices are in different zip codes on different models. And you'll just take a lot of notes. You'll see the regional price differences for specific makes and models in different markets around the country.

Listener (26:59)

The sales tax matter at all?

Clark Howard (27:01)

No. Because you register, you pay the tax and market where you register.

Listener (27:05)

Yeah. Okay. Miranda in Georgia says my husband is considering a new job, which will require a lot of travel. The company offers a company car or a car allowance for use of his personal vehicle. From an employee perspective, which of these options would be most beneficial for my husband? And what are some pros and cons?

Clark Howard (27:22)

Okay, so the easy button is driving the company car. You have to keep a log, usually of personal miles that you drive. Actually, you got to do this. In either case, there'd be some formula of imputed income you're billed for the personal miles. Or if your husband just drives the company car only on company business, then you don't have to worry about that. But if your husband drives an older car, it's almost always his advantage to take the mileage rate. As long as they're paying a good mileage rate. I forget what the IRS rate is right now. Somewhere 57.5 cents or something like that per mile. The employer will tend to offer whatever the IRS allowance is. If it's an older car that's heavily depreciated, then driving his own car would actually usually be the best deal. If your husband likes new wheels or drives new wheels or newer wheels or an expensive car, then he's much better off with the company car. This is all dollars and cents based on the expectation of what he would be driving. If it's his own transportation, you kind of know it's going to be a fleet car from the employer. So it's just what he would be happiest being in day after day as he's driving around for work. And those people who like fancy new wheels. Never a deal on the reimbursement from an employer driving your own vehicle. I want to thank you so much for joining us on today's podcast. Hope you have a wonderful RA rest of your day. And remember what this is all about. It's about your personal control of your wallet moving forward that you learn ways from us how to save more, spend less, and avoid getting ripped off.