FFIB ProgramFFIB Program

Finance-Fraud-Insurance-Finance-Fraud-Insurance-

BankingBanking

and you…and you…

Why Are We Here?

Teens Between 13 – 18 Spent $155,000,000,000

in 2000.

Source: Stages magazine, “Fiscal Fitness for Teens,” Summer 2001

Issue.

Your experienc

e is limited.

You are a Prime

Target for

Your experienc

e is limited.

You are a Prime

Target for

SCHEMES & SCAMS

PERSONAL DEBT

The average college undergraduate student has $2748 in credit card

debt. At 18% interest, and paying $50 per month, it will take 9.5 years

to pay this debt off.

Source: Stages magazine,”Fiscal Fitness For Teens.” Summer 2001 issue.

Your First Car: Have you thought about….

•Needs vs. wants

•New -- Rebates and other incentives; new car warranty

•Used -- “as is” -Lemon Law (does not apply to used autos)

•Financing or cash

•Reputable, licensed dealership

•Accurate/fair pricing – check book values

•Insurance costs, maintenance/gasoline costs

•Can you pay for it ? Live with it ?

Buying a Car:How will you pay?

• Lot Financing “on the spot”

• Bank• Credit Union• Credit Card• Cash?

•leasing a car is an option

Negotiate!!!Negotiate!!! • Prices

• Interest rates

• Trade in

allowances

• Down Payment

Signed Contracts are Final!!!

Consider the “Real” Car Costs•Do you have a trade-in?•Is there a lien or outstanding loan on the car?•What payment can you live with?•What is the interest rate?•How many payments? •“Out of Pocket” Repair Expenses? •What is the cost of the insurance premiums?•Don’t forget Other costs such as tag, title, or registration

True Cost of 95 Mustang

Itemization of Amount Itemization of Amount FinancedFinanced

Cash Price $5,900.00 Down Pmt -900.00Unpaid Bal 5,000.00+ Tax+ Doc Stamps 18.00+Tag/Title 35.00Optional:+Credit Life Ins 107.00+Add-Ons. 1,000.00

Amt Financed $6,160.00

Amt Financed $6,160.00

Finance Charge 3,141.60

Total of Payments

$9,301.60

RATE / MONTHLY PAYMENT COMPARISONS

CREDIT UNION

BANK / DEALERSHIP

LOCAL LOT FINANCING

7.25 % APR

10.25 % APR

29.07 % APR

$190.93 $201.59 $258.38

36 Months 36 Months 36 Months

… best deal• Do not buy on impulse

• Take used cars to YOUR mechanic for a look before

buying

• Don’t believe verbal promises of sales staff

– We owe you… Get it in writing!!

• Do not sign any papers with blank spaces, not fully

completed

• Understand the payment schedule

– # of payments – is there a balloon note at end?

• Ask about any fees you don’t understand

• Ask for the opinion of someone you trust

• Be ready to “walk away” – the same deal will still be

there tomorrow!

Automobile Insurance Automobile Insurance

Under state law, if you own a

motor vehicle, you must carry

Property Damage Liability

( PDL ) and

Personal Injury Protection ( PIP )

Under state law, if you own a

motor vehicle, you must carry

Property Damage Liability

( PDL ) and

Personal Injury Protection ( PIP )

Comp. & CollisionComp. & Collision

Banks and other lending institutions will require comprehensive and collision when a car is financed.

Banks and other lending institutions will require comprehensive and collision when a car is financed.

• Comprehensive Coverage: pays for replacement or repair when damage is caused by fire, theft, windstorm, vandalism, flood, or other non-collision damage.• Collision Coverage: pays to repair or replace your automobile when you collide with another vehicle or object, or your vehicle is overturned.

Force Placed Insurance

The Deductible is what will come out of your own pocket, after a

crash.

The Deductible is what will come out of your own pocket, after a

crash.

Deductible: $2,000 Damage: $1,800Coverage: $0

Deductible: $2,000 Damage: $1,800Coverage: $0

Insurance Pays

You Pay!!!

Comprehensive & Collision

NO SUCH THING !

Full Coverage ?

The Deductible is what will come out of your own pocket, after a crash.

The Deductible is what will come out of your own pocket, after a crash.

Medical Expenses: $10,000Deductible: $2,000You pay the deductible, plus 20% of medical expenses ($2,000) Total You Pay: $4,000

Medical Expenses: $10,000Deductible: $2,000You pay the deductible, plus 20% of medical expenses ($2,000) Total You Pay: $4,000

PIP

• Driving history• Type of vehicle you

drive• Where you live

• Your gender• Your age

• Drivers Education• Your grades

• How you use your vehicle (work—pizza

delivery)

The PREMIUM is the money you pay to the insurance company.

•Pay in full – coverage for 6 months

•Monthly payments

•Premium Finance Company*

*A high interest rate may make the premium unaffordable.

Insurance Quotes for ‘95 Mustang

Company A

Female: $1785

Male: $2236

Company B

Female: $1833

Male: $2305

Company C

Female: $1350

Male: $1762

www.YourInsuranceCo.com

Remember the 1995 Mustang that cost $5900?

What will it really cost? •$9301.60 is the total amount financed

•Monthly Car Payment $258.38

•Monthly Insurance Payment: $312

•Total Monthly Cost of Your Car: $570.38

•Total cost: $20,533.68 over 36 months

+Don’t forget gas and maintenance!

… And then, there was Credit…

•The reputation for solvency and integrity entitling a person to be trusted in buying or borrowing.

•An arrangement for deferred payment of a loan or purchase.

Loan: A sum of money lent at interest.

Credit Sources

Banks and Credit Unions are the Best.

The interest rates are lower.

Finance companies are less desirable.

Establishing Your Credit Open your own

checking or savings account – before you turn 18.

Once you turn 18…

•Your first

credit card

• Rental

agreements

• Utilities in

your name

• Cellular phone

•Credit Limits•APR – Annual Percentage Rate

•Annual Membership Fees•Over the Limit Fees•Monthly Fees•Late Payment Fees•Any Incentives•Secured Credit Cards•Pre-paid or “Guaranteed” Credit Cards

Interest Rates and Penalties

Credit Card Sense

• Pay off the balance as soon as possible. Make payments on time.

• Don’t have more than one credit card.

• Check/verify all charges when you get your monthly statement. • Immediately notify the company in writing of any inaccurate information.• Save card use for special occasions or emergencies• Never let friends borrow your credit card• Shred unused credit card offers• If your card is lost or stolen ….

Understand what you Understand what you sign/sign/

Know Your RightsKnow Your Rights

• ALWAYS read what you are signing • Don’t sign blank contracts• Walk away from sales pressure• GET COPIES of anything you sign, especially

contracts and policies • Keep receipts• Get it in writing – verbal agreements are

not legally binding

•Don’t hurry into a deal that you don’t understand•Research before you buy and ask questions•Take an experienced friend with you

Dangerous Waters

Auto Insuranc

e

CARS

Credit Cards

“Have I got a Package Deal

for you!”“Have I got a Package Deal

for you!”

PocketingPocketing

The Wrong WayThe Wrong Way

Sept. 29, 1998

Stable Insurance CompanyJoe Someone

The Correct WayThe Correct Way

Sept. 29, 1998

Stable Insurance CompanyInsurance Company Name

FRAUDFRAUDFRAUDFRAUD Lying can land you in

JAIL!!

Is This Your Future?