We Will Buy Your Car

This is a great time to sell your old unwanted car. These are the words posted on the internet ad by my local Toyota dealer. “We will buy your car even if you don’t buy from us.”  Carvana is running a similar ad on their cable television ads.  What’s going on?  Why do they want my old car?

It’s simple.  Car dealers lack inventory.  After going to the Los Angeles Auto Show and sitting in their new cars I looked at my local dealer web sites to see what models they had in stock. Some had none.  Some had a handful of 2021 cars and the trim choice was one.  Take it or leave it.  2022 cars are even rarer. To keep their business alive those new car dealers want your old car so they will have any inventory to sell.

What’s going on here? It’s a year of shortages.   The auto industry’s turmoil may be unrivaled.  It’s all about the computer chips in short supply.  Every car needs them and so do appliances.  The chip makers are overwhelmed by the unexpected demand.  Most of the chips are made overseas in China and Taiwan. Most the cargo ships are waiting to be unloaded in the ports of Long Beach and Los Angeles.  Those computer chips are somewhere among the cargo containers on the ships.

2022 will be an expensive year to buy a car.  This is definitely a supply demand situation.  Some car dealers are actually asking for more than the sticker price. Unless you really need another car it has been advised by many to wait until 2023.

Do you have funds for the unexpected?

Owners would have to pay assessments ranging from $80,190 for one-bedroom units to $336,135 for the owner of the building’s four-bedroom penthouse, a document sent to the building’s residents said. The deadline to pay upfront or choose paying a monthly fee lasting 15 years was July 1. The association had just $800,000 in reserves.

The building was in a desirable location. Owners pocketed impressive returns when sold. All, except one apartment, sold for more than double the purchase price. Unit 508, a 1,683-square-foot condo sold for $800,000 in February, more than doubling its 2012 sale price of $370,000.

An HOA commonly maintains a type of savings account called the cash reserves or a reserve account for significant, infrequent, or unexpected common area costs.

When a development’s homeowner’s’ association (HOA) encounters large or unexpected expenses, the HOA needs money to repair or replace the damage. For example, what if a clubhouse roof starts leaking, the pool needs resealing, or a piece of equipment in the fitness room breaks down? At times like these, it is wise for HOAs to have a reserve account.

House in my neighborhood, asking price $800,000. Similar to the price of a condo.

Reserves for single family homes isn’t a bad idea either.  When the bathroom tub backed up in my home the plumber said he needed to install a drain cleaning opening under the house. After he crawled under the house he reported that the main sewer line was leaking in many places.  Cost for replacing the sewer system under the house was $5,000.  There was no reserve fund.  There was the retirement investments and that paid the bill.  A similar situation resulted in installing new copper plumbing for another $5,500.  Termites are lurking and the roof is 30 years old.

Owning a house is expensive but it provides us a place for both privacy and fun.



Americans are more Cautious Then You Thought

2000 Chevrolet Montecarlo

According to CNBC, a cable finance news channel, 25% of cars in the U.S. are at least sixteen years old as vehicle age hits record high.

On average, 1 in 4 cars and trucks you pass are at least 16 years old, according to new analysis of what Americans are driving. With the economy struggling due to Covid-19, prompting companies to lay off millions of Americans, the age of vehicles in the U.S. is likely to rise. It may even climb at a faster rate, according to IHS Markit the highly respected survey company that provided the data.

As someone who believes in driving a car until it is ready for the junk yard I was delighted to learn that I am not alone.

Of course we all want a new car.  We might even shop for a new car.  Then we hear what the monthly payment will be and that stops us from proceeding with the purchase.

It is the same thing when it comes to the purchase of any high priced item.  The picture on the old TV is still good so unless the new television has some new features we can’t live without, we turn to our family members and say “What we have does the job.  Let’s wait until black Friday and we’ll make it a family Christmas gift.”

Despite all of these efforts to keep our expenses under control and avoid using our credit card, the Average US Credit Card Debt is at $15,983.

Sadly many of us have been laid off as a result of the virus epidemic and are now using our credit card(s) to buy our everyday needs.

Is personal bankruptcies going to grow?  Putting food on the table is a priority.

Lowering the Cost of Living

The average Social Security check is only $1,413.08 in 2018, making it hard to get by in the United States. Some retirees look to other countries, where living expenses can be lower, to make their Social Security checks stretch further.

A recent GOBankingRates survey found that more than half of people ages 55 and older have less than $10,000 saved for retirement — and a whopping 34 percent have nothing saved at all.

As the tough economic times continue in the U.S., many people are looking to cut down on their expenses by moving to more affordable cities and towns.

Or is the answer moving to another country where the cost of living is far less than the United States.

southamericaliving.com lists workable budget of $1000 – $1200 USD and up, affording more luxuries such as eating out regularily, shopping excursions, larger apartment or house. The following countries have the lowest cost of living: Bolivia, Colombia, Ecuador and Peru. Chihuahua, Mexico and Guadalajara, Mexico are two of the lowest cost cities in Latin America.

Inexpensive healthcare is often touted as a reason to retire abroad. You become eligible for Medicare at age 65. However, you can’t use this government health coverage overseas.

The annual cost to own and operate a sedan in the U.S. is $8,588, according to AAA. When you retire abroad, you might not need a car because public transit is more common and reliable.

Rent in Mexico is 4.33% lower than in United States. In Santa Ana, Costa Rica a 3-bedroom single family home currently costs about US$212,000.  The cost in other Costa Rican cities housing costs are similar to Santa Ana.  Consider those housing costs in your destination city.  The cost per square meter of a home in Jakarta, Indonesia is $2,120 USD. The cost per square meter of a home in Richmond, Virginia is $2,128 USD.

If you think you’ll lower your tax bill by retiring overseas, think again. You still have to pay U.S. taxes. Even if you move your assets to accounts in your new country, you will be required to file an annual tax return, according to the U.S. Department of State.

If you retire abroad, you still can collect Social Security benefits, said Sally Hurme, author of “Get the Most Out of Retirement: Checklist for Happiness, Health, Purpose, and Financial Security.” In many countries, you can even have your check directly deposited into an account, she said. The Social Security Administration has a Payments Abroad Screening Tool you can use to see in which countries you can live and still receive your check.

You might also have to pay taxes in your new country, Hurme said. The U.S. does have treaties with some countries — including Canada and Mexico — that prevent double taxation. But the country you want to retire to might not.

If you own property or have assets in your new country, you’ll likely need to hire an attorney in that country to help draft an estate plan, Hurme said. That’s because any documents that you had drafted in the U.S. — such as a will, trust or power of attorney — might not have any effect overseas.

The alternative to moving to a“low cost” country is considering moving to a low cost city in the United States.

I found a survey of those low cost cities. Actually they are mostly towns that you are not likely to visit let alone move to. Excluding those small towns (less than 100,000 population) the least expensive small city is Brownsville, Texas with a Population of 180,000 and a Cost of Living 14.9% below U.S. average. Indianapolis, Indiana has a population of over 800,000 people and a Cost of Living 13% below U.S. average.

How comfortable will you feel living in another country? Your family and friends will be thousands of miles away. Visiting San Jose, Costa Rica may be fun but living there should at least cause you to wonder about the downsides.  Think through the entire process before moving to another country rather than living in a country where you were born and feels like home.

Giving to Worthwhile Charities

This is the time of the year when many of us feel charitable.  We not only give gifts to our family members but give a gift to the gardener, the people who clean our house, the hairdresser, and some of the charities begging for help on television.

The Wounded Warrior Project seems to advertise frequently on CNN.  A few years ago CNN provided some damaging data about many charities.  They identified Charity Navigator (charitynavigator.org) as a good source to obtain evaluations of charities and how much of the money collected actually goes to the intended needy.  The Wounded Warrior Project earned 3 out of 5 stars.  Only 70.5% of the money raised actually went to the services provided.  The former chief executive was paid $575,470 annually but the report say the current chief executive receives  no pay.  Charity Watch, another organization identified by CNN as a charity evaluator,  (charitywatch.org) says The Wounded Warrior Project spend only 61% of the money collected on the needy victims.  Charity Watch gives The Wounded Warrior Project a C+.

I donate money to six charities and have carefully considered their performance.  You should too!

Self-driving Car Timeline for 11 top Automakers

As I drive a 2001 Nissan Maxima that has gone about 118,000 miles and is still a smooth operating car with dirty upholstery and cruise control that has stopped functioning, I believe it is time for something new.

Aren’t self driving cars about to be the next big thing in just a year or two?

I found the following summary of when this is likely to happen.  Abridged article from venturebeat.com dated June 4, 2017

Should I wait another few years?  After all the car still runs quite well.

A company by company examination of public investments by leading car makers and statements from their top executives makes it clear that most car companies are betting self-driving technology is inevitable, and they’re all jumping in with investment and initiatives.

Defining “self-driving” by level

Level 1 automation: some small steering or acceleration tasks are performed by the car without human intervention, but everything else is fully under human control

Level 2 automation: like advance cruise control or original autopilot systems on some Tesla vehicles, the car can automatically take safety actions but the driver needs to stay alert at the wheel

Level 3 automation: still requires a human driver, but the human is able to hand some “safety-critical functions” off to the vehicle under certain traffic or environmental conditions. This poses some potential dangers as the major tasks of driving are transferred to or from the car itself, which is why some car companies (Ford included) are interested in jumping directly to level 4

Level 4 automation: a car that can drive itself almost all the time without any human input but might be programmed not to drive in unmapped areas or during severe weather. This is a car you could sleep in.

Level 5 automation: full automation in all conditions

 

GM: Rumors of self-driving vehicles by 2018

Unlike other big car makers, GM has not laid out a specific timeline for its self-driving cars, but the company has made it clear it’s moving aggressively in that direction. In December, GM CEO Marry Barra wrote, “We expect to be the first high-volume auto manufacturer to build fully autonomous vehicles in a mass-production assembly plant.” The focus will be on ride-sharing, rather than the individual buyer.

 

Ford: Truly self-driving vehicles by 2021

Ford Motor CEO Mark Fields told CNBC that Ford plans to have a “Level 4 vehicle in 2021, no gas pedal, no steering wheel, and the passenger will never need to take control of the vehicle in a predefined area.” Ford actually plans to skip right over Level 3 automation and go straight to Level 4. In the company’s tests, chief technology officer Raj Nair found that Level 3 automation would lead to engineers dozing off and not being situationally ready to take over when called on. CEO Mark Fields claims that Ford will have cars with no gas pedal and no steering wheel driving people around in select cities by 2021.

 

Honda: Self-driving on the highway by 2020

At the end of last year, Honda announced it was in discussions with Waymo, an independent company of Alphabet, to include Waymo self-driving technology in Honda’s vehicles.

 

Toyota: Self-driving on the highway by 2020

Toyota has been one of the most skeptical car companies when it comes to autonomous vehicles, but in 2015 it made a big investment to catch up. Toyota is investing $1 billion over five years in the Toyota Research Institute to develop robotics and AI technology. The company hopes to launch products based on its Highway Teammate programs in 2020, which would also be just in time for the Tokyo Olympics.

 

Renault-Nissan: 2020 for autonomous cars in urban conditions, 2025 for truly driverless cars

Renault-Nissan is counting on its new partnership with Microsoft to help advance the company’s autonomous car efforts. Renault-Nissan plans to release 10 different self-driving cars by 2020.

 

Volvo: Self-driving on the highway by 2021

Volvo CEO Hakan Samuelsson said in an interview, “It’s our ambition to have a car that can drive fully autonomously on the highway by 2021.” He envisions that full autopilot would be a highly enticing option on a premium vehicle and will initially be priced at $10,000.

 

Hyundai: Highway by 2020, urban driving by 2030

Hyundai is working on self-driving vehicles but with more of a focus on affordability. In an announcement, Hyundai claims it is “developing its own autonomous vehicle operating system with the goal of using a lot less computing power. This will result in a low-cost platform, which can be installed in future Hyundai models the average consumer can afford.”

 

Daimler: Nearly fully autonomous by early 2020s

Daimler announced this month a high-profile development agreement with Bosch, one of the largest parts suppliers. The goal is to bring both Level 4 and Level 5 autonomous vehicles to urban environments “by the beginning of the next decade.” This announcement came less than a month after Bosch announced its own collaboration with chip maker Nvidia to develop self-driving systems.

 

Fiat-Chrysler: CEO expects there to be some self driving vehicles on the road by 2021

Fiat-Chrysler also teamed up with Waymo last year to test some self-driving Chrysler Pacifica Hybrid minivans.

 

BMW: Fully self-driving vehicles possible by 2021

Last year, BMW announced a high-profile collaboration with Intel and Mobileye to develop autonomous cars. Officially, the goal is to get “highly and fully automated driving into series production by 2021.”

 

Tesla: End of 2017

As a smaller startup car maker, Tesla has always focused on pushing the edge of technology. Last year, Tesla began making sure all its cars had the hardware needed for full self-driving capabilities, even before the software/data was ready. Tesla constantly updates its car’s software to improve safety.

I have no car payments now and  the car still runs quite well.  Maybe some new tires and I will ask the mechanic what is the cost of fixing the cruise control.  

Don’t Need A Will? Think Again!

 

 

 

by Jane Bryant Quinn in the May 2017 AARP Bulletin

Just do it. Your heirs will thank you.

Does everybody need a Will? The straight answer is yes. That’s true even for people who think they don’t have a dime to leave to anyone. What if you were in an accident and died later of injuries, and your estate won a $l million settlement? Who gets the money?

Admittedly, that’s a little far out. You might get away without having a will if, say, you’re a renter living on Social Security with no savings. If you have savings, a pay-on-death account will pass that money to named beneficiaries when you die.
But there are hitches to any no-will scheme, says attorney Patrick Lamon of Bilzin Sumberg in Miami. To begin with, a random financ.al asset almost always turns up. Examples might be a rental deposit that’s returned or a medical reimbursement. Those checks will be made out to the deceased. How do your heirs get them cashed?

If you had a will, you’d have named an executor to cash checks, pay off creditors and distribute any money or property to your beneficiaries. Without one, your heirs will have to ask a court to appoint a personal administrator. Usually, it will appoint your surviving spouse or a child. But you risk a family fight over who should be in charge.

Some couples try to go will- free by putting everything into joint names. Joint assets pass to the other owner automatically. So do assets with beneficiary forms, such as individual retirement accounts. But something is inevitably left out typically, a car, Lannon says. Heirs would need an administrator to transfer title. Even if the joint-asset strategy works for the first death, what happens when the other spouse dies? He or she should make a will, which you both could have done from the start.

When there’s no will, state law dictates who gets the house, car, savings and other assets. Those laws vary widely. A surviving spouse might get everything in one state but only one-third in another, with the rest going to your children. If you have no children, half might go to a spouse and half to your parents.

Lawyers are the best source for reliable wills. Your lawyer will also remind you that you need a durable power of attorney and a health care proxy, so someone can manage your finances and make medical choices if you’re unable to do so yourself.

If you’re allergic to lawyers, you can find free, state-specific will forms online. In most states (not all), handwritten wills are also accepted, provided that they were witnessed properly. DIY should be better than nothing. But be careful.

Jane Bryant Quinn is a personal finance expert and the author of “How to Make Your Money Last” She writes regularly for the AARP Bulletin.

Cars and Trucks to Avoid in 2017

Consumer Reports is a wonderful organization for giving unbiased reviews on everything from paint to cars to toasters.  They can do this because they take no advertising.  Compare that behavior with car magazines, photo magazines, and home décor magazines that thrive based on the level of advertising they obtain.  In other words it is unlikely that Popular Photography will give a negative review of a Nikon camera or Motor Trend will write negative issues about a Ford.

Thus we come to a list of vehicles that CR has defined as the “10 Least Reliable Cars.”  The report was just emailed out this morning.

cr-least-reliable-car-2017-fiat-500l-pr-10-16

With an overall rating of 35 out of 100 the Fiat 500L is ranked as the worst of the worst.  The road test was a 50 out of 100. “Reliability ranks at the bottom of our charts.”

Next to the bottom is the Ford Fiesta. Trouble spots: clutch replacement, rough-shifting or slipping transmission, noises and leaks, power equipment.  I can attest to this car’s poor rating based upon my own experience.  Hertz gave me no choice in Seattle despite my reservation for a mid-sized car.  Cramped, uncomfortable seats, and very noisy at freeway speeds.

Jeep Renegade has an overall score of 42.

Cadillac Escalade has an overall score of 44.  Reliability is much worse than average.  With a price range of $73,395 – $97,795 General Motors should be ashamed of trying to sell this vehicle.

Chrysler 200  has an overall score of 47.

Ram 2500 has no overall rating.

Tesla Model X  has no overall rating but has a Reliability is much worse than average.

Ford Focus  overall score of 50

Chevrolet Tahoe rating is 51 /GMC Yukon rating is 51

Chevrolet Suburban   overall 54  /GMC Yukon XL   overall 50.

Is it any wonder that European, Japanese, and South Korean cars are so successful in America?  My question is when will they learn?

The Low Pay for Low Skills Lie

No one wants to be poor and no one wants to ask for aid from welfare offices. Unfortunately some people simply lack the abilities needed to successfully attend college. In fact some people struggle to graduate from high school. That is the reason we have a population of poor adults that will always have an income barely above the minimum wage for their entire lives.

In a world where high tech skills are the driving force and innovations that are eliminating many low skill jobs, the least able in society must accept simple jobs that do not provide a living wage.

Those poor people may be hard working but there simply is not enough family income to pay the cost of food, clothing, housing, and the other basics that the rest of us take for granted. Society’s solution is welfare.

The argument given by so many people against raising the minimum wage is that the jobs they do are not worth any more than that low pay.

Thus we, society, are subsidizing all industries that employ minimum wage personnel. We are giving them welfare. Society makes the poor feel even worse about their condition by requiring them to apply for welfare, present food stamps to markets, and other degrading actions.

The solution is to require employers to pay a “living wage” for the lowest skill jobs. Those people in that category would no longer receive welfare aid. The only people receiving welfare aid would be the mentally and physically handicapped. What about single mothers with young children? Require employers to provide child care either on site or through payments to child care facilities.

Of course there would be a chorus of objections to the cost burdens placed on employers. The answer is that society is currently paying the bill through welfare payments and that translates to higher taxes.

Conservatives who object to subsidies should be happy with reduced government size and Liberals should be happy to know that even the least able in society will receive a living wage.