Is ethanol gasoline good for the environment or causing you to fill up more often?

Ethanol is consider a biofuel alternative to gasoline.  It is produced from the fermentation of sugar from foods such as corn, sugar cane, etc. and it also can be produced by the hydration of ethylene from petroleum production too.  Many gas stations advertise ethanol additives in their gasolines and that by purchasing their ethanol gasolines you are helping reduce pollution in the environment, that your car will run better, etc.  Is this true and what are the things you may want to know…

Not all vehicles do well with ethanol based fuel.  Your gas mileage could be reduced and unknowingly you could be filling up more often. People who have reported reduced gas mileage with ethanol based gasoline are some hybrid owners and people with older cars. 

Of course for you to know whether ethanol based gasoline is affecting your gas mileage or not, you will have to test your own vehicle for results.

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What is a fico score/credit score? What things can affect my fico score/credit score?

On various television programs you have probably heard the words “fico” score or credit score mentioned, but what exactly is this? 

Fico stands for the Fair Isacc Corporation.  They were the inventors of a credit scoring system that most of the world uses. 

Your credit score or fico score represents a calculated measure of what type of credit risk you actually are.  Credit scores range from 300 – 900 with the majority of people in the 600 – 800 range. Higher credit scores mean lower interest rates charged on loans.  Lower credit scores mean higher interest rates charged on loans.  For instance, a person with a credit score of 450 will pay  three to five points higher interest rates on loans than a person who has a credit score of 800.

Keeping a good credit score is very important because it can affect your ability to get a mortgage, get a school loan, get a car loan and even your ability to rent suitable accommodations. 

What are the things you may want to know…that affect your credit score for better or worse?

The amount of time you have had credit – Loyalty pays off. Try to establish credit with companies for at least seven years or more. Although other reward programs or incentives can be tempting, jumping around from credit card company to credit card company can lower your fico score/credit score. Of course, age also plays a factor in the total amount of time you have had credit too.  The amount of time you have had credit makes up 15% of your fico score/credit score. 

How often your credit is accessed – Buying a car?  Opening a bank account?  Applying for a credit card?  Renting an apartment? Inquiring about loan?  Getting a mortgage?  All these things require access to your credit report.  Each time someone other than you accesses your credit report it lowers your score.  If you are buying a car, inquiries within 14 days will be grouped together.  If you are buying a house inquiries within 30 days will be grouped together.  How often your credit is being accessed makes up 10% of your fico score/credit score. 

Different types of credit you have – Installment debt like a car loan or a mortgage is looked upon more favorably than revolving debt like credit cards.  The different types of credit you have make up 10% of your fico score/credit score. 

Your bill payment history  – Do you pay your bills in full and on time?  If you are not paying your bills on time and/or making minimal payments on several maxed out credit cards this will lower your credit score.  Do you know that your bill payment history actually makes up the largest portion of your fico score/credit score?  35% 

How much debt you have compared to available credit – Maxed out or high balances on your credit cards?  If you compare the amount of your available credit on your credit card compared to the amount of debt you have on your credit cards; does it work out to over 50%?  If it does, this affects your credit rating for the worse.  Your goal should be not to borrow more than 50% of your available credit balance from any single lender. (mortgages and car loans excluded) Do you know will have a better credit score if you owe smaller amounts on several credit cards rather than maxing out one credit card to its limit?  How much debt you have compared to available credit makes up 30% of your fico score/credit score.

Here is an example of what a credit report looks like.

If you live in Canada, here are links to Canadian credit bureaus:

Transunion

Equifax

Experian


If you live in the U.S. here are links to U.S. credit bureaus: 

Equifax

Transunion

Experian


Are you so focused on getting a discount that you miss the big picture?

Everyone loves getting a deal no matter what they are buying. I got a great price, it was a steal of a deal, it was on sale, etc., etc. are common sayings we hear quite often from family, friends and coworkers on a regular basis.  But…before you jump up and down in glee there are things you may want to know…if your actually getting as good as deal as you think you are.

Lets examine some of the areas where people may be lulled into thinking they are getting a great deal when they may not be.

Homes.  Some people are so focused on getting the cheapest price possible that they forget about over all construction quality and long term maintenance/repair costs. A good deal on a poorly built home that requires thousands of dollars in repairs or renovations may end up costing you more than if you would have paid more for a very well built home that requires less maintenance/repairs over the long run. Try to hire a home inspector that is very, very, thorough so you can avoid buying the “deal” that turns out to be a money pit. 

Clothing, shoes, etc.  Examine the quality of the item carefully. Thin material, loose threads/buttons, unfinished seams, hems falling apart, gaps where the sole of the shoe meets the leather, etc. These items may fall apart after wearing them for a short time.  Instead of buying many “deals” that fall apart quickly you may be better off waiting for a higher quality item to go on sale or buying higher quality second hand items that will last for a much longer time period.  If you find yourself buying things that fall apart or don’t last very long, try to calculate how much you are spending on all these items and how often you are replacing them.  You may be paying out a lot more over time than if you would of bought higher quality items originally.

Home Renovations.  The cheapest quote may not be the best quality job.  When you go to sell your home, buyers may look at a poor quality renovation job as a new renovation project and deduct higher amounts off their offer because of it.

2 for 1 deals – Grocery stores are famous for this one.  The buy one get one free is usually based on paying full price for the first item and getting the second one free.  A lot of times the same item is advertised on sale for a lower price a week before or after the 2 for 1 deal is advertised. 

Meals – Special discount coupons or two for one meal deals may require you to purchase beverages. Some restaurants have high mark ups on beverages and charge a lot for them, that is how they make their profit. If you normally drink water with your meals, ordering two meals at regular price with water may actually cost less than the meal deals that require you to purchase beverages with them.

Manufacturers Suggested Retail Price or MSRP – This represents the “maximum” product price, it is not the recommended retail selling price.  You will see MSRP on everything from electronics, to furniture, to automobiles, etc.  Seeing a lower hand written price for $50.00 off the manufacturers suggested retail price is not a deal. 

Automobiles.  Beware of red tag sales, family/employee pricing sales. Profits at dealers are actually higher during these times than at other times.  People mistakenly assume they will save a lot of money during these special sales or get a better discount than shopping at other times of the month, not necessarily so. The best time to shop for a vehicle is the last day of the month, late in the day when the sales staff is tired.  The dealers want to close their books and want good sales quotas.

Furniture. There is always room for additional discounts even if the item appears as if it is on sale, it pays to ask and shop around. MSRP pricing with hand written prices below the MSRP is very common at furniture stores. Tent sales involve merchandise that is damaged, has been discontinued or clear out items the store will no longer be caring because of poor sales figures.  Always try to get additional discounts on tent sale items or on floor models that are for sale, because these are items that the store really, really, wants to get rid of. 

Jewelry. There is a very high mark up on jewelry items.  The best time to buy jewelry is usually May, but June through August is good too.  Most people get engaged at Christmas and Valentines or give jewelry as gifts at this time.  Discounts and/or quality of items on sale will be limited during these times.

Percentages off the sale price, percentages off the original price.  The bate and switch game that some retail stores play to clear end of season merchandise. At first you will see a sign 30% off the last marked sale prices, then you will see a 40% off sign, but 40% discount is taken on the original price and all the sale price tags have now been removed.  This item may now cost more at 40% off the originally price than it did when it was 30% off the last marked sale price.  A higher discount percentage off the original price may not be the best deal, it really depends on the type of store you are dealing with.

Price matching guarantees.  The majority of people are lulled into a false sense of security when they see the words: “we will match our competitors prices, we will beat our competitors prices by 10%”, etc. Do you know the majority of people don’t bother to check if the competitors are actually offering better prices than the store they are buying the merchandise from?  With so many search engines at your finger tips, it may pay to shop around.

Remember…

MSRP is Manufacturers “Suggested” Retail Price.  A suggestion is just a suggestion, not the price you should be paying.

High prices can hide in bundle type packages and it may be cheaper to buy the items individually than in bundle packages. 

Manufacturers will set MAP (minimum advertised price)  That is why you may see brand names left out of advertisements and generic words like “plasma tv’s on sale”.  The retailer may actually be selling the manufacturers tv for less than the manufacturer will let them advertise the item on sale for.

When items are really cheap, they may be at the end of their life cycle, seasonal, discontinued or just plain old.  Dollar/liquidation stores thrive on selling old stock, check for expiry dates.

Buying a car? Buying a suv? Buying a van? Buying a truck? Just test driving a new vehicle you are admiring? Why does a car dealership have to photocopy my drivers license before I test drive a vehicle?

A lot of car dealerships will photocopy your drivers license when you test drive a vehicle.  They will say their insurance requires it.  It is for the salespersons safety in case you rob them, steal the car, etc.  

Things you may want to know…

Some dealers copy your license to run unauthorized credit checks on you during your test drive.  This is still a top complaint in both Canada and the U.S.  You ask “how could they run a credit check on me; I didn’t sign anything to give them permission.”   Here lies the fatal flaw with the credit bureau itself. The credit bureau assumes when the car dealership calls for a credit check with your personal information that you have actually signed the paper giving them permission to do so. 

There are couple bad factors at play when a car dealership takes the liberty of running an unauthorized credit check on you.  Firstly, they know your credit score before you would even start negotiations for the vehicle.  This gives them the upper hand in the price negotiation process because they already know what you can afford.  You can get less of a discount, less for your trade in, etc. etc., all because of an unauthorized credit check.

The next bad factor. You can’t decide what vehicle you want to buy, so you test drive a lot of cars at a lot of different dealerships.  If a lot of those dealerships run unauthorized credit checks on you, this can lower your credit score and affect your ability to obtain other loans.

What you can do…

Make your own copies of your drivers license to hand to the dealer and write on the copy, “Dealer may not run a credit check on you”  Remind them of the fines associated with unauthorized credit checks.  Both Canada and the U.S. have laws to protect consumers from unauthorized credit checks.

Remember…

Not every car dealership runs unauthorized credit checks on you, but it is very hard to tell who does and doesn’t unless you look at your credit report after test driving cars.

It doesn’t hurt to check your credit score every few years and see who may of been poking around in it. It doesn’t matter how many times you personally check your own credit, it has no affect on your rating.