Online car buying is growing

Will the car-buying process shift to the Internet in the next 10 years? That's the view of some analysts speaking with CNNMoney.com, which reported an increase in online car buying (CNNMoney.com Sept. 10).

Some large dealerships--Autonation, the country's biggest chain, and Sonic Automotive--are experimenting with upfront Internet pricing that serves as the initial point of contact for buyers.

Most consumers already use the Internet to window shop and gather information. But now more are completing the transaction online--hoping to avoid those dreaded face-to-face sit downs with a salesperson.

For consumers, the struggle between dealers and shoppers is shifting in favor of the buyer while dealerships, already faced with slim margins, look for a faster sales turnaround. The practiced online shopper can pit dealers against one another from home.

The appeal of online shopping is simple for consumers: There's less hassle. It's fast and convenient. Online car buying has become more streamlined and competitive, according to Edmunds.com. It has shopped online exclusively for its fleet-testing vehicles during the past eight years.

Michelle Dosher, managing editor of Home & Family Finance Resource Center and MoneyMix at the Credit Union National Association, Madison, Wis., offers this advice:

• Line up your financing so you can be a cash-paying customer. Shop around for rates, starting first at your credit union.
• Know exactly what you want to buy--the make, model, options, even the color.
• Avoid going to the dealership. Call, send an e-mail, or employ a car-buying website to get bids from competing dealerships. Ask them to send you a copy of the window sticker and the invoice price, which is what you are really after. You'll be surprised how many will do so when they know they are bidding against another provider.
• Don't fill out a credit application from the dealership before you have a firm price. Dealers use it to see whether you're a qualified buyer.
• Resist the temptation to go to the dealership before getting a firm quote. Remind dealers that other providers are meeting your request for a firm bid.

If you buy from an individual or through an unknown provider, Dosher also reminds online shoppers to beware of potential fraud.

Visit a loan officer at LifeWay Credit Union to discuss auto financing details.

Your portal to 'the land of the free'

The good old U.S.A. is called the land of the free, and no one knows this better than the smart consumer. Anyone willing to take the time to look--and ask--around is sure to find bargains at the best price of all: nothing.

Where to begin? How about the place that has catered to cheapskates since the days of Benjamin Franklin? As one Minnesota credit union member told readers of the Credit Union National Association's (CUNA's) Home & Family Finance Resource Center:

"Visit your local library--if you haven't been there for a while, you'll be surprised, as I was, to see what they have to offer. Aside from current books and magazines, you can get free or very cheap DVD rentals. In addition, our county libraries have free museum passes--they give you no-cost admission to many area museums and attractions. No strings attached. It's a great way to get truly free entertainment."

One library resource you're sure to find useful is the annual list of "fabulous freebies" from Kiplinger's Personal Finance magazine (Sept. 1). But there's much more.

Libraries all around the country are coming up with ways to offer unusual services for free or a small fee. For example, at many branches you can rent framed artwork for your home. Some libraries circulate toys for kids and household tools for grownups. You might even be able to check out an electricity monitor to modify your home electrical use or borrow an e-reader to take on vacation.

Ask library staff to help you track down free opportunities in your area. Many communities have neighborhood festivals and art fairs. Almost all museums have free days or partial days--find out when they are and arrange your visit around those days. See if your children's museum, science center, zoo, or aquarium has free times or free special events.

Depending on where you live, the opportunities keep coming. For example, if you're in a college town, find out about free performances by music department faculty or students. If your community has an orchestra or symphony, see if it allows free access--even if it's for rehearsal time.

Who has an 800+ credit score?

Some people go a lifetime striving to hit a hole-in-one in golf or bowl a 300 game. Others are reaching for an 850 credit score.

Ismat Sarah Mangla interviewed several individuals with high scores and asked them to share their success stories (Money Magazine Aug. 26).

Chris Peplinski, a stay-at-home dad from Rogers, Ark., has a score of 813. He reads up on the elements that make up a FICO credit score and checks his number every three months.

Leland Lim, 41, has a score of 806. The San Francisco Bay Area doctor checks his reports regularly. However, his score suffered from a single error until he had it corrected.

Brenda, 69, and Dick Husemann, 66, have matching scores of 818. The retired Wilmington, N.C., couple keeps balances low, charging less than 10% of their available credit. While this keeps their scores low, they also commit to never missing a payment. Payment history accounts for 35% of the FICO score, and making timely payments is the No. 1 way to improve a credit score.

FICO, the Minneapolis-based company that created the widely used credit score model, considers five elements when calculating a score:

• Payment history;
• Amount owed;
• New credit;
• Amount of available credit; and
• Types of credit used.

myFICO.com also offers information about the basic elements that determine a score.

Those interested in seeing their credit scores can request a free annual credit report from each of the three main credit bureaus from AnnualCreditReport.com. Users can report any errors directly to the report provider.

Mark September 16 for the "Money Talk"

Money skills are crucial to the next generation's ability to live responsibly and independently. Will they get all the important personal finance information they need at school this fall? Probably not. But, there's something you can do about it. Prepare yourself and your child for National Money Talk Night (Forbes Aug. 25).

Taking advantage of the back-to-school atmosphere, American Express, with Jean Chatzky, is sponsoring National Money Talk Night, a time for parents and their children to talk about personal finance on Sept. 16. The idea for the night arose from discussions Chatzky, a nationally known personal finance author and media personality, held with American Express, the Jump$tart Coalition and the Council on Economic Education.

Chatzky has prepared the tools, information, and even the words you need to have the Money Talk with your child. The information is available for three age groups: middle school, high school and college students.

Here's what you do:

• Visit MoneyNightTalk now. Download and view resources so you can get your own questions answered in advance. Pledge to have the Money Talk with your child. Print the talking points appropriate to your child's age group.
• Mark Thursday, Sept. 16 on your calendar and ask your teenagers and young adult children to do the same.
• On Sept. 16, sit down with your kids and have the Money Talk. You can use the MoneyNightTalk website or personal finance information on your credit union's website during your discussion to help answer your kids' questions.

Take note of the money attitudes and ideas that come out of your discussions. If you don't have children, invite your spouse or significant other to this national event. Use the talking points to help you discuss your financial goals.

Looking for a new car?

Check with us first! With rates as low as 2.99%, you will save money with a car loan from LifeWay Credit Union. Call us at 251-2089 today!

How to NOT run short of money in retirement

What are the chances you'll run short of money in retirement? The Employee Benefit Research Institute, Washington, D.C., predicts that 47% of early baby boomers ages 56 to 66 and 43% of late boomers ages 46 to 55 are at risk of having insufficient income in retirement to cover basic retirement expenses, as well as uninsured health care costs (EBRI July 27).

To help, Smart Money.com (Aug. 20) identifies six relatively painless ways to close the income gap:

• Ditch high-cost debt. Aim to step into retirement debt-free. Pay as much as you can afford on highest interest-rate debts first while still making minimum payments on all other debts. Once you pay off the highest-cost debt, keep whittling away until you pay off all of them. Getting rid of mortgage, auto, and credit card payments in retirement could save you thousands of dollars or more a year.
• Weed out unnecessary insurance. You probably don't need a disability policy in retirement. Similarly, weigh the pros and cons of cashing in your life insurance policy if you no longer have dependents and your spouse could easily support him or herself. When making the decision, calculate the financial loss to your family if you die, and then factor in the cost of the premiums.
• Scale down this old house. Fewer rooms and square footage translate to lower expenses--upkeep, maintenance, utilities and taxes. Or, move to a less expensive area.
• Get rid of energy guzzlers. Replace older appliances with new Energy Star models, switch to compact fluorescent bulbs, and ask for a free or discounted home energy audit. Visit doe.gov for guidelines to conduct an audit on your own.
• Trim high investment fees. You may be paying too much if your fees are more than 1% of your portfolio value. Ask for a fee reduction if you think you're being overcharged, or search for a fee-only adviser at NAPFA.org.
• Lose the landline. If cell phone reception is a problem, consider getting a signal booster. Visit BillShrink.com for the low-cost cell phone plans.

How retailers get you to buy more

Spending more than you planned while shopping lately? It could be because retailers are doing more to target your senses and emotions in ways you may not notice (Chicago Tribune Aug. 15).

A consumer's best defense is to be aware of tricks and traps that entice you to indulge, according to Martin Lindstrom, author of "Buyology: Truth and Lies About Why We Buy":

• Touch. You're more likely to buy a product because you touched it. A smart book store clerk won't simply point you to the right aisle, but will retrieve a book and place it in your hands.
• Start high, end lower. A salesperson's best way to increase buyer spending considerably is to frame a decision by asking the customer to make choices. The customer is shown a full-featured product and asked which features to eliminate, rather than starting with the basic model and asking what to add. In most cases, the customer will not want to "give up" features not originally considered.
• "Sincere" flattery. Salespeople use comments that may not be sincere but sound like it. You might not believe a clerk who says, "That dress looks great on you." But if she says, "I had to tell another woman that dress didn't look good on her, but it looks great on you," the compliment sounds more sincere.
• Live models. Customers are more likely to buy clothes they see on a live model than on a mannequin, according to a new field of research called neuroeconomics. That's because neurons in the brain associated with empathy are stimulated by a human, but not by a mannequin.
• Music. Does that tune make you feel happy and relaxed while in the store? Playing music with a rhythm slower than your heartbeat helps buyers linger longer, and ultimately spend more.

One way to avoid getting sucked in by retailer tactics is to shop with a list. Retailers want consumers to linger in the store so they can persuade them to buy additional or more expensive items. If you don't have a shopping list, you're more likely to be a good target for their agenda.

Another option: Wait to buy. Shopping can raise the dopamine levels in the brain, creating a rush. Building in a 48-hour waiting period for discretionary purchases can help answer that "Do I really need it?" question.