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FFIB ProgramFFIB Program
Finance-Fraud-Insurance-Finance-Fraud-Insurance-
BankingBanking
and you…and you…
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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.
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Your experienc
e is limited.
You are a Prime
Target for
Your experienc
e is limited.
You are a Prime
Target for
SCHEMES & SCAMS
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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.
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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 ?
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Buying a Car:How will you pay?
• Lot Financing “on the spot”
• Bank• Credit Union• Credit Card• Cash?
•leasing a car is an option
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Negotiate!!!Negotiate!!! • Prices
• Interest rates
• Trade in
allowances
• Down Payment
Signed Contracts are Final!!!
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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
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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
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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
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… 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!
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Automobile Insurance Automobile Insurance
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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 )
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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
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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
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NO SUCH THING !
Full Coverage ?
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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
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• 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)
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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.
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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
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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!
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… 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.
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Credit Sources
Banks and Credit Unions are the Best.
The interest rates are lower.
Finance companies are less desirable.
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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
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•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
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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 ….
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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
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Dangerous Waters
Auto Insuranc
e
CARS
Credit Cards
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“Have I got a Package Deal
for you!”“Have I got a Package Deal
for you!”
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PocketingPocketing
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The Wrong WayThe Wrong Way
Sept. 29, 1998
Stable Insurance CompanyJoe Someone
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The Correct WayThe Correct Way
Sept. 29, 1998
Stable Insurance CompanyInsurance Company Name
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FRAUDFRAUDFRAUDFRAUD Lying can land you in
JAIL!!
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Is This Your Future?