Finance

Drivers are paying an average $702 monthly for new cars: Here’s why that record high was ‘inevitable,’ says analyst

Published

2 years ago

August 15, 2022

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Drivers are paying an average 2 monthly for new cars: Here’s why that record high was ‘inevitable,’ says analyst

Skynesher | E+ | Getty Photographs

Why drivers are spending extra to purchase a brand new car

The typical new-car transaction in July was $45,869, based on a joint estimate from J.D. Energy and LMC Automotive. That is down a tad from the report $45,988 set in June.

A number of components are enjoying into larger prices, consultants say:

Greater rates of interest for auto loans: The typical is about 5.5%, up from 4.5% a 12 months in the past, Edmunds information reveals. That price might tick larger, on condition that the Federal Reserve is anticipated subsequent month to once more increase a key rate of interest that many client loans derive from.

Provide chain constraints: Within the midst of a persisting scarcity of pc chips wanted to finish in the present day’s automobiles, client demand continues to outstrip provide, which has led to elevated costs. During the last 12 months, costs on new automobiles have risen 10.4%, based on the newest Client Value Index.

Car recognition: Client desire additionally has shifted over the past decade or so to SUVs and vans from sedans, which can value much less.

Fewer incentives: With sellers not struggling to make gross sales, producer reductions have fallen to a mean of $894 per car, down 54.7% from a 12 months in the past, based on the J.D. Energy/LMC estimate. It is the primary time the common has fallen beneath $900.

How to economize when financing a brand new automotive

When you plan to finance the acquisition of a brand new automotive, there are some issues to contemplate that might decrease the quantity it is advisable finance.

For starters, take into account that shoppers with larger credit score scores are capable of safe the perfect mortgage phrases.

“Boosting your rating may make all of the distinction in an auto mortgage … the upper you may get it, the higher the speed you will be supplied,” mentioned licensed monetary planner Malcolm Ethridge, an govt vp and monetary advisor at CIC Wealth in Rockville, Maryland.

Moreover, should you plan to make use of seller financing, you could possibly negotiate the rate of interest down, Ethridge mentioned. “Individuals most likely do not give attention to that,” he mentioned.

You additionally must be reasonable about how a lot automotive you really need. Some automobiles might have options that push the value up however that you can reside with out, he mentioned.

“Take note of discovering one which has fewer options … as a result of that may carry down the value of the automotive,” Ethridge mentioned.

Commerce-in values stay ‘extraordinarily good’

And should you’re buying and selling in a automotive, that additionally will cut back the quantity it is advisable finance. Relying on the specifics of the automotive, it could possibly be price greater than you anticipate.

Commerce-in values “are nonetheless extraordinarily good in comparison with what it will have been price in typical occasions,” mentioned Drury at Edmunds. As an illustration, for 5-year-old automobiles, “you might be nonetheless 1000’s of {dollars} forward of the place you technically must be,” he added.

“When you have a look at a 5-year-old automotive 5 years in the past versus one in the present day, there is no comparability,” Drury mentioned. “You’ve got a lot fairness in that automotive.”

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Finance

St. Augustine's says it will eliminate 50% university employees ahead of accreditation meeting

Published

2 hours ago

November 23, 2024

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St. Augustine's says it will eliminate 50% university employees ahead of accreditation meeting

RALEIGH, N.C. (WTVD) — Saint Augustine’s University (SAU) announced Saturday it will eliminate several positions, including non-faculty and vacant, this month ahead of its significant accreditation meeting.

Last December, the Southern Association of Colleges and Schools Commissioner on Colleges (SACSCOC) voted to remove SAU from membership due to its financial status. The university’s appeal was denied in February and then in July, the SACSCOC arbitration committee reversed the decision and reinstated SAU’s accreditation.

The SACSCOC board will vote on the next step for the university in December.

In a news release, SAU said to ensure compliance with the Southern Association of Colleges and Schools Commissioner on Colleges and keep its accreditation, the school has reduced its expenses by approximately $17 million in fiscal year 2024 compared to 2023. Reductions, totaling 50% of university employees, include 67 staff positions (41% reduction); 37 full-time faculty positions (67% reduction); 32 adjunct faculty positions (57% reduction); and stopping several under-enrolled programs.

SEE ALSO | St. Augustine’s alumni hosts celebration amid canceled on-campus homecoming

The university also said it will be actively settling outstanding balances with vendors and adjusting various contrasts.

SAU also reported completing four financial audits for fiscal years 2021, 2022, 2023, and 2024, and restoring employee payroll and health insurance benefits.

The HBCU university — remaining millions of dollars in debt — secured a $7 million loan from Gothiuc Ventures with a high-interest rate. To get the loan, St. Aug’s put up much of the university’s main campus and off-campus properties as collateral.

Gothic Ventures tells ABC11 that the interest rate offered was determined by the financial difficulties faced by the university, which included a recent audit, historical revenue losses, and outstanding debt.

SEE ALSO | Saint Augustine’s University’s high-rate $7 million loan puts HBCU in jeopardy, finance experts say

Many, including SAU alumni and finance experts, are concerned about this loan.

“We are concerned about the partnership between Gothic Ventures and Saint Augustine University because if for any reason Saint Augustine is unable to repay Gothic ventures, the land will be lost and the university as we know it will cease to be,” alum Bishop Clarence Laney said.

The lawsuit against the board of trustees by the SaveSAU Coalition was also recently dismissed.

EDITOR’S NOTE: The featured video is from a previous report.

Finance

Assess your financial risk before new policies affect the economy

Published

10 hours ago

November 23, 2024

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Assess your financial risk before new policies affect the economy

I’ve been thinking about financial risk lately.

Should I change my asset allocation in my retirement portfolio, considering Donald Trump’s successful bid for the White House? Stock market valuations have risen smartly in recent years, which real income growth, productivity improvements, technological innovation, low unemployment rates and healthy corporate profits have largely powered. Yet with the election of Trump, voters have approved a massive economic experiment.

The Trump administration comes into power with many policy goals, but four economic initiatives stand out: Enacting significant tax cuts; imposing broad-based and significant tariffs; sweeping raids, mass deportations and tighter immigration controls; and slashing federal government regulations. The extent that these plans turn into reality and how each policy will interact with the others is uncertain. The risks are obvious. The outcome isn’t.

Enter risk management, a critical concept in finance. Professionals often associate risk with volatility. The tight link makes sense, since owning assets with high volatility hikes the odds of losses if there is a pressing need to sell the asset to raise money.

However, for the typical individual and household, risk means the odds money decisions made today don’t pan out. Managing risk means lowering the negative financial impact on your desired standard of living from decisions gone wrong and when circumstances take an untoward turn.

“Anything that makes reaching or maintaining that more likely reduces your risk, and anything that makes this less likely increases your risk,” writes Bob French, the investment expert at Retirement Researcher. “Everything else is just details.”

The key risk management concept is a margin of safety, a bedrock personal finance idea broader than investment portfolios. It can include having an emergency savings fund, owning life insurance to protect your family and investing in your network of friends and colleagues to hedge against the risk of losing your job. The right mix depends on the particulars of your situation.

In my case, after studying my portfolio, running household money numbers and reviewing lifestyle goals, I’m comfortable with the asset allocation in my retirement portfolio. There is too much noise in the markets for comfort, and market timing is always tricky. The prudent approach with my individual situation is to stay the course.

Finance

Shannon Bernacchia Appointed Interim Finance Director for Regional Schools – Amherst Indy

Published

18 hours ago

November 23, 2024

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At a Zoom meeting on Friday, November 22, School Superintendent Dr. E. Xiomara Herman recommended to the Regional School Committee and Union 26 School Committee that Shannon Bernacchia be appointed interim Finance Director for the schools, replacing Doug Slaughter who had served in that position since 2019. Bernacchia has served as Assistant Finance Director under Slaughter. Her appointment was approved unanimously by both school committees.

In recommending Bernacchia for the interim director position, Herman cited her “impressive career, dedication, and accomplishments during this transitional period [to a new administration],” adding, “Since joining our district, she has demonstrated exceptional proficiency in managing complex financial operations, including preparing budgets, overseeing audits, and providing detailed financial reporting to the school committee.”

Bernacchia holds a Bachelors Degree in Business Management from Bay Path University and professional training in school fund accounting. She currently holds an emergency School Business Administrator license valid through 2025 and has completed all requirements for her initial license, except for the 300 hours of mentorship. She anticipates completing that requirement in January, 2025. Former Amherst Regional Public Schools and Town of Amherst Finance Director Sean Mangano is serving as her mentor.

Herman expressed confidence in Bernacchia’s ability to head the district’s financial operations.

In acknowledging her appointment, Bernacchia thanked the school committee members and said that she was excited to work with superintendent who is woman.