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The Best Way to Buy Tires

By Bob Brooks

August 25, 2014

 

Question:

Dear Bob,

I remember you talking about the best way to buy tires.  I need to buy a set of tires for my car and the cost that the dealership is charging seems high.  What are the steps to take?

 

Answer:

This is where the interest really comes to be an advantage.  The big discount type tire outlets their entire inventory in stock. My recommendation is www.discounttire.com   You can go online and do some research as to the best combination of tire and price.  You can also research the 100's of comments that consumers place on the site.

Keep in mind; more people are going to take the time to post their displeasure than the other way around.  So, keep the comments in perspective.  However, that will give you a good avenue to figure out the best value. Finally, in most cases, you can also set up an appointment online to have them installed and verify that your store has them in stock.

Now one last way that you might save a little more money is by purchasing them on-line.  The site www.tirerack.com has a big online presence.  You select the tires, buy the tires online, and then ship the tires to a shop that will install them for you.  There are plenty of shops that you can just pay to install the tires. Figure up the discount on the tires, plus the delivering charge, and the install charge and compare the prices.  The savings might be worth the few extra steps you have to take.  

Dealerships are an easy and convenient way to get your tires replaced. However, you end up paying for that convenience in a big way.  

 
Should you Buy a Pre-owned Car or Brand New?

By Bob Brooks

August 22, 2014

Question:

Dear Bob

Thank you for your show. Since this show is about how to be prudent with our money, I want to know why people always say it's better to buy a pre-owned vehicle than a new one. I have bought 2 cars and in both cases I've found that the difference is usually about 1 or 2 thousand dollars between a brand new vehicle and a 2 or 3 year old car with about 20 to 30 thousand miles. Please, explain. Thank you

Answer:

There are two factors that you have to consider when deciding to pay for a brand new car or a gently owned car with low miles

(1)     Price depreciation of the vehicle - Once the car drives off of the showroom floor the car takes an upfront price depreciation hit - Said another way, if you were to try and resell that car the next week you wouldn't get what you paid for it. The longer you drive it the more the value of the car depreciates.

(2)     Negotiated price - Car dealerships only have so much room to negotiate on a new car sale.  Most of the time they have a ton of room on a pre-owned car transaction.  You have much more negotiation power.  Plus, the new car depreciation should already be baked into the price of the car. 

Now how do you get an idea of a fair price?  There are actually 2 ways to go about this.

(1)     How long has the dealer had the car? The car fax, which gives you the history of the car, will often note when the vehicle went into dealer inventory.  It is a simple rule of thumb.  The longer it has been in dealer inventory the more likely they are motivated to take a lower price. It costs a dealership money to hold onto cars.

(2)     You can do a search on a site such as autrotrader.com and see what the exact car you want is going for across the country

To get a fair price you have to do your homework. I stress the word fair.  I have always felt that there are diminishing returns as you try and squeeze every nickel out of a car deal.  You just don't want to overpay and getting a little bit of a deal is always good. Another important thing to remember when you try and get the “incredible” deal is that time and stress can cost you, as well.

 
The Do's and Don'ts of Debt Consolidation

By Bob Brooks

August 21, 2014

 

Question:

Dear Bob

I am looking for the best way to try and consolidate about 30k in credit card debt. Any suggestions? My credit is pretty good now and I am making my payments on time, however, my monthly payments to all my creditors exceed $1000 per month.

 

Answer:

When you have quite a bit of debt that you are paying off, it is without question a huge blessing to have good credit scores. That gives you options - This reader has good credit scores - so should she consolidate? 

There are only two reasons that you consolidate - 

  1. Better interest rates - The amount of interest and the amount of money you are paying each month are going to be the two key determining factors as to how long it takes you to get out of debt.

Obviously, you want to pay back as much as you can.  Higher interest rates will require you to pay back much more.

  1. 0% plans - great concept however, you have to do the math. Does it make sense after you evaluate the interest you are paying after the 0% period plus factoring in the 3% transfer fee? You need to make absolute sure that you can pay back a bulk of that money during the 0% time period. 

When should you not consolidate?

  1. For the sake of convenience - in the email it sounded to me like the thought of one payment sounded much better than multiple.
  1. To lower the payment - if you consolidate into another plan and the payment is much lower, one of two things are occurring -you actually did get a much lower interest rate which is good or they extended the term of the note out further which is something that you don't want to do. 

Paying back debt is no fun.  However, staying the course and making a commitment to that high set of payments as well as making sure your interest rate is as low as possible insures that you get out of debt as quickly as possible.  

 
5 Ways to Save on College Textbooks

August 20, 2014

I was sent this by consumer expert Andrea Woroch.  Andrea is a nationally-recognized consumer and money-saving expert for Kinoli Inc., who helps consumers live on less without radically changing their lifestyles.  For more information click here.


 

Among the biggest and most important purchases college students make, textbooks top the list of pricey needs. In fact, the U.S. Public Interest Research Group found the average student spends as much as $1,200 each year on books and supplies -- with some books costing as much as $300 alone. This expense has become so great that 65 percent of students opt against buying a textbook, even though they fear their grades will be in jeopardy.

There's no reason to risk your GPA to save your budget. Before you head to the campus bookstore, consider these five ways to saving on textbooks.

1. Buy Used
Publishing new editions of textbooks every four years (or so) works to devalue used textbooks, as students fear buying anything but the newest editions. Though used textbooks in the current edition go for 50 to 60 percent off, the older edition can save you even more.

Most updates are minimal but speak with your professor before buying. Then, check outHalf.com, Textbooks.com and eCampus.com for used book options.

2. Rent Textbooks
Many students look forward to selling their books at the end of the semester, but the payout is paltry compared to what was paid for the original book. To avoid this predicament, rent textbooks through sites like Chegg and CampusBookRentals.com and save over 80 percent. If you go this route, be sure to keep the book in pristine condition so you're not charged any fees when you return it.

3. Grab a Coupon
Whether you're renting or buying a new textbook, don't forget to look for printable coupons and online coupon codes for savings. Sites like CouponSherpa.com offer 10-percent off at Half Price Books, and FreeShipping.org has codes for free delivery from Textbooks.com. Even a general search for "textbook coupons" can yield savings, so do your research!

4. Download What Your Need
Since few classes require students to read every page of a textbook, you can get away with downloading only the necessary portion from such websites as CourseSmart.com and Open Courseware from MIT. You can also find hundreds of free-domain books for use on e-readers through the Project Gutenberg website.

5. Avoid Bundles
Bundling high-margin multimedia CD-ROMs with texts tends to push up the price of new books. However, federal regulations have restricted this practice so you have the option of buying what you need and nothing more. Check with your professor or teaching assistant before you buy the whole bundle since buying the textbook alone is typically cheaper.

 

 
Alert – If You Went to a Hospital in this System, Your Personal Information Might be Compromised

By Bob Brooks

August 19, 2014

You might want to pay attention to this story.  Unfortunately, this story is a big deal and one that is getting hardly any press.  According to a regulatory filing from Community Health Systems, Chinese hackers have stolen medical records for 4.5 million patients.  Community Health Systems runs 206 hospitals in 29 states. 

Over the course of 2014, I have written about some pretty major security breeches.  However, this is by far the worst because of the type of data stolen - social security numbers.  Most of these thefts involve credit card information, emails, etc.  This particular one is significant because not only the millions of people who have been compromised but also because of what thieves can do with this information.  The social security number is the entry into identity theft.  In order to open a credit account, all you need is a social security number.

Unfortunately, the company is concerned about Texas because of the number of hospitals in the state. Supposedly, the company is going to contact anyone that they feel has been compromised.  I wouldn't stick around for that.  If you know you have been to one of these hospitals in the last 5 years, you are at high risk for identity theft.

The company will probably inform you with a sense of urgency.  Rarely, do they give the right advice as how to proceed.  Here are the steps I would take:

1)     If you have the luxury to do so, set up an identity freeze on your 3 credit report files. 

This is the ultimate protection because you in a sense put a lock and key on your credit file.  You are the only person that can access your credit files.  There is a cost associate with the locking and unlocking of your files.  However, I believe that if you were involved in a security breech that you are able to lock them down for free. 

2)     Get identity theft monitoring for all 3 credit reporting agencies

This is the first line of defense against identity theft.  If someone is trying to access your credit, a good service will notify you immediately and you can take the action to stop it. 

What about these other companies who claim to protect you on every level? 

This isn't an industry with a stellar reputation.  Until a company like Lifelock can explain how they are going to figure out one Joe Smith from another or determine ahead of time that someone else is using your credit card fraudulently, I wouldn't waste the money.  After all, Lifelock's first "no.1 identity theft system" was simply to call the credit reporting agencies and put a fraud alert on your file and continue to renew it.  Eventually they were successfully sued and told to cease and desist. 

Miraculously they came up with another state of the art system.  Maybe it is the cynic in me. I find it hard to believe that it is worth the money.

Once again, if you are contacted by this company for the reason of potential identity theft, I would take action.  If you know you were at one of these hospitals in the last 5 years I would be proactive.

 
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