Since auto sales have slowed recently, there have been more dealership ads touting zero percent financing and “No payment until…” “Zero” and “No…” are definite attention grabbers but reading the fine print shows that these deals do result in higher cost. Most often, you will save money by taking a low interest loan along with a dealer rebate in lieu of the “Zero” or “No payment until…” offer.

These ads entice new car seekers to come to the dealerships but often they find out that they do not qualify for the great rate and terms because of loan restrictives. Zero percent financing typically is open only to those buyers with the top echelon of credit scores.

Other surprises await car buyers as well. The zero percent rate comes with much shorter terms than most buyers seek. Terms for zero percent financing deals are traditionally for 12 or 24 months, which makes monthly payments much higher. Also, buyers are often not allowed to take the available rebate, if they choose zero percent financing. In addition, extra fees are also sometimes associated with such deals.

Depending on your credit and payment history, these offers may work great for you. However, most people, even those with good credit, often find that such offers are not what they appear on the surface. Be proactive in saving your time and money by reading all the fine print with these offers very carefully.

To find out which scenario, rebate and low rate loan vs. zero percent financing, would save you the most money on your auto purchase, please try the Credit Union Lending Systems' calculator.

Source: Federal Deposit Insurance Commission (FDIC), “There’s No Such Thing As a Free-Lunch Loan,” FDIC Consumer News.

A few years ago, many smaller companies did not offer retirement plans for their workers. In addition, many self-employed workers did not have access to a retirement plan that fit their needs. Enter the Individual Retirement Account (IRA)! IRAs were created to allow an individual, working or not working, to be able to contribute toward their retirement. They are now recognized as tremendously flexible tools of saving that enrich any retirement portfolio.

IRA FEATURES

• Work Status...IRAs are typically quite flexible in that you do not need to be actively working to set up or contribute to one. The IRA is yours whether you are working for one company, more than one or none at all.



• Contribution...IRAs do not necessarily require scheduled contributions or set a percentage for the amount you contribute. An annual contribution limit does exist, however. The maximum amount you may contribute for 2008 is $5,000, if you are under age 50, and $6,000, if you are over age 50. Maximum contribution levels are scheduled to increase almost yearly until 2011, when it retreats back to the 2001 level of $2000.



• Plan Scope...IRAs allow for a greater scope in plan makeup than the average 401(k). This makes an IRA a wonderful complement to a company-sponsored 401(k). You could set up an IRA that is greatly diversified with CDs, mutual funds, savings and stocks — all dependent on your particular situation.

There are two retirement IRAs: Traditional and Roth.

• Traditional IRAs allow you to contribute pre-tax earnings to the plan depending on your income, tax bracket and if you also participate in a 401(k). Usually, contributions to a Traditional IRA are often made with pre-tax dollars through payroll deductions. However, contributions are also tax deductible for those non-working plan holders.
• Roth IRAs allow contributions only from after-tax dollars. Therefore, when you begin withdrawing from your plan after age 59 ˝ and if the plan has been active for at least five years, your contributions will not be income taxed.
• Note - early withdrawal of funds from either type of IRA may result in fees for there are certain withdrawal restrictions.

Call Purina Credit Union, (314) 982-2888, (877) 342-5728 toll free, or check with your financial advisor for more information on the many benefits of having an IRA in your retirement portfolio.

Sources:
- ‘The Complete Idiot’s Guide to Investing for Women,’ by Jennifer Bayse Sander, Anne Boutin,
   and Jim Brown, Alpha Books, ©1999.
- Motley Fool web site, “All About IRAs” section.