Pod Insights The Clark Howard Podcast 05.16.25 Clark Answers His Critics on Clark Stinks / Bumpy Ride For Car Buyers About this episode Friday - Clark Stinks day! Christa shares Clark Stinks posts with Clark. Submit yours at Clark.com/ClarkStinks. Also, potential car buyers face a lot of questions right now - should you buy new or used? If buying used, is Certified Pre-Owned (CPO) the way to go? Clark shares advice to help you navigate decision making. Clark Stinks: Segments 1 & 2 Vehicle Purchase: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Roth vs. Traditional 401(k): What's the Difference? Why 'Buy Now, Pay Later' Worries Clark Howard Best Credit Cards With No Foreign Transaction Fees in 2025 The Best International Phone Plans Why You Should Never Mail a Check How To Buy a Used Car Certified Pre-Owned Vehicles: What You Need to Know Before You Buy Should You Ever Lease a Car? When Should I Drop Comprehensive and Collision Coverage? Best Place to Get a Car Loan Car Loan and Payment Calculator - Clark Howard Clark.com resources: Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:00 Speaker 00 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
0:12 Speaker 01 Price and participation may vary. Promotion pricing may be lower than meal pricing.
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0:50 Speaker 03 It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. Remember this, if you have a question for me, you can submit that question at clark.com/ask. But today, I'm responding to your questions, actually your comments, your beefs that you posted at clark.com/ClarkStinks, where you tell me what I've gotten wrong. Also, what about buying or leasing a car right now?
1:33 Speaker 03 And if I'm planning on buying used, which is what 80% of people do, how valuable is it doing a CPO? Know what that is? Certified pre-owned. I'm going to tell you the dirt that you need to know about CPO. That's later. But right now, it's time for Clark Stinks.
1:55 Speaker 04 I should have never encouraged you to speak.
1:57 Speaker 05 You must think I'm pretty stupid.
1:58 Speaker 06 You should be ashamed of yourself. Well, maybe I'm wrong, maybe I'm wrong. Maybe you're right, pal.
2:08 Speaker 07 You're not all that stinky. However, there is one thing I don't think you considered when you spoke about 401ks versus Roth 401ks. Last year, I made the decision to put all my future 401k contributions in my employer's Roth 401k plan. Soon, I noticed stopping getting the employer match. After much research, I found written in very small print on the last page of the company 401k manual, there is no match for a Roth 401k contributions.
2:36 Speaker 03 I've never heard of an employer doing that distinction.
2:40 Speaker 07 I've changed my contributions, so I get the match. I don't know if this is unique to my employer, and they list the very large employer they work for, but beware. Thank you for all you and your team do. I love the new Ask an Advisor segments. Jill.
2:53 Speaker 03 Jill, I'm seldom speechless. I almost am right now. I have never heard of an employer offering a match on a traditional and not on a Roth. What would be their motivation? That's weird.
3:08 Speaker 07 Maybe the only thing I could think of is if the higher compensated executives, if there's a thing where there has to be a certain percentage of people in the traditional 401k.
3:17 Speaker 03 No, just in a 401k.
3:19 Speaker 07 Okay, I don't know. I agree with your disdain for pay-in-four schemes, but one small correction on the DoorDash thing. The minimum charge that can be split into four is $35, and even then, not all orders are even eligible. And also, they want you to know Best Buy, Lowe's, Home Depot, Sephora, and many merchants who sell significantly higher-priced items are on DoorDash. So, no one's going to be putting a late-night pizza on a pay-in-four scheme, let alone McDonald's. I don't know, my son might do that. But even that aside.
3:48 Speaker 03 I don't know. When Grant and his buddies go to McDonald's late at night, or go to a regional chain called Cookout.
3:58 Speaker 03 I think they easily go over $35 with their order.
4:02 Speaker 07 Yeah, I'm just saying my son would might be tempted if I've warned him, so he won't. But if McDonald's was like, yeah, okay. Anyway, but even that aside, nearly all purchases on DoorDash are debit or credit cards. And while I don't know the best breakdown, I bet 60, 70% are credit cards. And you know, a significant number of buyers carry a balance on their cards. So stupid as it is, even without paying for schemes, a lot of people are already buying their cheeseburgers on installments. And they're not getting it spread over four months without additional interest charges. So while paying for is seldom a good deal, the sky isn't falling just because some purchases on DoorDash are not eligible for the scheme. Warren.
4:40 Speaker 03 Warren, thank you. Okay, so what's my beef with paying for? Oh, that was a bad pun.
4:47 Speaker 03 I didn't mean that. I didn't mean that. All right, so the thing is, is that paying for gets people to spend money impulsively that they might not have spent in the first place if they were short of money. And it, it has not been working out for people as it's messing up their credit, huge numbers, about a third of people. And people are not paying as they have agreed and all that. And so it's like piling on. We already have enough problems with people carrying, as you described so, so well, uh, credit card debt and then financing a 99 cent something.
5:28 Speaker 03 So yeah, it's just all part of one big blob of a problem with people borrowing for lifestyle.
5:36 Speaker 07 You don't stink, but you missed a solution for virtual credit cards from settlements. I use mine to buy an Amazon gift card within a few minutes of receiving the email, then get a reduction on my next purchase. I've not gotten any less than about $5, so I'm not sure about getting a $1 settlement. Clark.
5:53 Speaker 03 Okay, let me explain that. Uh, this was in response to people getting these stupid stored value cards that people are using now instead of just paying us money. And they're counting on breakage where the money never gets redeemed. And then they paid you the money, but they never actually paid you the money. And so this was in response to somebody having an idea of how to offload a small amount of money. And we talked about utility bills that they'll accept partial payment and then you pay the rest how you normally would. Amazon gift card, another way to do it.
6:28 Speaker 07 Two things Clark overlooked. His chosen phone company isn't the only one great to use for international travel. My T-Mobile plan has free internet and texting in 125 countries and only a fee for phone calls not made over Wi-Fi. I travel a lot too, and I've saved big bucks using my T-Mobile cellular service. Second, Fidelity has a debit card with no foreign transaction fees. I've never had a fee, but if one shows up, Fidelity credits the account, not just Vanguard. Joanne.
6:57 Speaker 03 Joanne, thank you. First of all, that second part, I didn't know that about Fidelity doing what Schwab does. It wasn't Vanguard we were talking about before, it was Schwab. I really appreciate that. The problem with the T-Mobile International is you're capped at five gigs of data when you travel overseas. So if you're on a trip very heavily using your phone, you run out of data in several days and then you have to buy more data from them. The advantage with Google Fi is that you use your data overseas, just like you use it in the United States, if you're on one of those plans.
7:38 Speaker 03 And by the way, Google Fi just doubled the amount of data you could use to 100 gigabits, gigabytes, versus T-Mobile's five.
7:49 Speaker 07 I wrote to you asking about health insurance for my spouse, who is five years younger after my forced retirement at age 65. You recommended that I look into part-time work for a Part 135 operation. Often they are small companies that don't offer health insurance to full-time pilots, let alone part-time pilots. After retire, all retiring pilots are aware of flying opportunities after retirement. Not my question, but it's how you answered the second part of my question that really stinks. I asked about my My spouse collecting social security at age 60, which was a typo. And I know the earliest is 62. You never answered if it might be advantageous for my spouse to collect at 62. You only corrected my mistake.
8:30 Speaker 07 I was so excited to hear my question being read, only to be terribly disappointed by your non-answer, CJ.
8:35 Speaker 03 CJ, thank you very much, and I apologize for the non-answer I gave you. On the Part 135, obviously, it would have to be one of the big charter companies or flying for a corporate jet department where you would have access to the health insurance. And I apologize if my answer sounded trite. On the social security thing, if your spouse earned less than you did over the years, there's a direct benefit to a spouse taking social security at 62, regardless of when the other takes social security, which is usually a benefit to later for you to take it.
9:20 Speaker 03 And if she earned less over a working lifetime earlier at 62, is a good combination that works out for both of you. And I apologize so much for my failure to answer your question well the first time. I hope that that was a better two-part answer.
9:39 Speaker 07 It's possible that I'm the stinky one because maybe I fell asleep during one of your podcasts and just missed this.
9:44 Speaker 03 This is what many people do is they listen to the podcast to help them sleep at night because I'm better than a sleeping pill.
9:52 Speaker 07 But an article on your website states that you said, quote, "You only give traditional IRA to heirs you don't like," end quote. I think you're missing the boat if you don't mention to your listeners that they can use the IRA RMDs and distributions to do all their charitable giving. That's what I'm planning to do with my IRA once I reach the RMD age. I love listening to your podcast and I do try to rewind when I fall asleep listening at bedtime, Kristin.
10:18 Speaker 07 My cousin's husband Ted is a new Clarky and he told me he doesn't listen at bedtime, but he listens on his stressful commute in the Washington DC area because he finds you calming.
10:29 Speaker 03 Oh, well, thank you for that.
10:30 Speaker 07 Thanks Ted.
10:31 Speaker 03 But I'm telling you, if you are having trouble falling asleep at night, just listen to me, you'll go right to bed. It works great. Okay, using the IRA, for people who aren't aware, required minimum distributions, the feds require that at an age certain in your 70s, it's adjusting right now and is going to end up being 73, you have to start taking money from your traditional IRA, even if you don't need it. And then that can cause you all kinds of tax problems and cause your Medicare bill for Medicare Part B to go way up and because of something called IRRL, I think, whatever.
11:12 Speaker 03 So you are allowed this escape hatch if you are in a position to do so, to give a charitable donation or many charitable donations for the money you were required to pull out and then it doesn't count in your taxable income. You don't get a tax deduction for it, but it doesn't increase your tax bill. And Kristin, that's a great suggestion I should have mentioned before.
11:38 Speaker 07 Clark, you keep beating the drum on how dangerous it is to pay a bill by check, but what is a person to do when the only credit card option is to write your card number, expiration date, and security code on the statement part that's to be returned by mail? There is no phone number to call or do it over the phone. You're making me think that the bulk of a population is having their mail stolen on a daily basis. Nothing is foolproof, so maybe tone it down a bit. Love your show, especially on Fridays, Deborah.
12:04 Speaker 03 Deborah, thank you very much. Okay, so I can't tone it down about checks because as crazy as it is, your payment being intercepted where you wrote down a credit card number, an expiration date, and your three or four digit code, depending on what kind of card it is, believe it or not, is much less risky for you than writing a check that gets stolen in the mail. Because that check getting stolen in the mail can actually end up with you being arrested. It's a crazy thing. I've done several stories over the years in TV about people being arrested because their checks were stolen in the mail and then what a criminal did washing it,
12:49 Speaker 03 passing it somewhere else and all that. We are the only country in the developed world where people still routinely write paper checks. In fact, most developed countries no longer have paper checks in existence because they understand there's no way to secure the system to prevent all the fraud problems that happen with paper checks. So any way you can avoid writing a paper check even is crazy is writing down your full credit card number and all that data and mailing it off. That's still better than sending
13:30 Speaker 03 a paper check. It's terrible, shouldn't be, but it is. And so why do I am so strident about it? And you asked me to tone it down a bit. I've got to like hit people over and over again in the head about how dangerous it is to write a paper check and to stop doing it. So that's why you hear so much force from me about it. And I appreciate you taking the time to write. I also appreciate all the people who use me as an alternative to a sleeping pill to fall asleep at night. And remember, if you have a Clark Stinks
14:10 Speaker 03 you'd like to post, please go to Clark.com/ClarkStinks and maybe you'll hear Krista read your post on any given Friday. Coming up ahead, tough time on the car lot. How do you decide new, used, buy, lease? We're going to talk that through.
14:33 Speaker 00 Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
14:45 Speaker 01 Pricing participation may vary. Promotion pricing may be lower than meal pricing.
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16:19 Speaker 03 Car market's rough, tough. The tariffs, how they're going to play out, all that. Lot of confusion from the White House about it. And so it's hard for manufacturers, hard for dealers, hard for you and me as consumers to know what in the world to do. So I want to reiterate something with all the confusion going on on the car lot. First of all, if your vehicle that you're driving now works just fine, don't go to a car lot. Keep driving what you got. You know what it costs you. You know it's working fine.
16:59 Speaker 03 And usually, let's face it, we tire out of a car before it's tired out. Just keep driving it, then you don't have a decision to make. On the other hand, if your vehicle is really not reliable, not performing well, it's leaving you stranded, and you know it's past time to kick it to the curb, there's still opportunity. I've been looking at inventory figures. There's still a lot of inventory on most dealer lots and even stored up from manufacturers. So, except for Toyota, which has no inventory of pretty much anything,
17:42 Speaker 03 you have an opportunity that if you need to buy, need, not want, you need to buy a vehicle and you like buying new, this is when you should be getting the vehicle. Because it's going to take a while to wean out that inventory that's already sitting out there. And who knows how these tariffs are ultimately going to play out on the car lot? So, you can only decide with the limited information and confusing information we have available. So just remember, want, need, want, need. Want, don't do anything. Need, this is when you should go ahead and get out there.
18:26 Speaker 03 And I was just talking new there. Eighty percent of us go to the used vehicle lot, used car lot. So, what do people buy that they feel like is the next best thing? They buy CPO. The dealers, the manufacturers push CPO so hard. It's when a used vehicle comes in, usually back from a lease, and the manufacturer allows a vehicle to sell it.
18:53 Speaker 03 As a CPO, why do manufacturers have certified pre-owned? Because they're trying to boost the value of the vehicles coming back from lease. So the cost of operating that lease is lower for the manufacturer than it would be otherwise. Because it puts a floor under the value of that three-year-old vehicle. Because now the manufacturer is saying they're going to provide you a warranty on it, even though it's a used vehicle for a period of time. Engine, transmission, depending on the manufacturer, other things as well. The dealer is on their honor. This is what's important.
19:34 Speaker 03 To do a thorough check of so many different components of the vehicle. They are required to refurb it, to bring it up to the standards the manufacturer requires for it to be a CPO. And you know what else? They're required to verify as best they can that it's not been in a wreck. So guess what happens? There's so much money in this for people that they cheat. And there are times the dealer plays it just like they should. They really thoroughly checked the vehicle out. They reconditioned it as they're supposed to. They verified with near certainty that it had not been in a wreck.
20:18 Speaker 03 And then there's the dealers that don't do those things. And sell it as certified pre-owned. And you think you're buying something that's really great, but it turns out not to be. How do you protect yourself? What do I tell you with any used vehicle? You have it checked out by an independent mechanic of your choosing. But you don't even have to do that necessarily upfront. Because upfront, because you're going to pay a lot for the mechanic, you run a vehicle title history. And if it's been in a big wreck, that's going to show up in that title history check. And you're done with that vehicle. You're good.
21:02 Speaker 03 So any used vehicle, let me reinforce this. Unless you're buying where they provide total coverage for you and say, if you don't like it, bring it back for a period of time. By the way, CarMax has gone from being seven days return rate in some markets, 30 days in others. I think they're now a blanket 10 around the country. Carvana's seven days. Most dealers, when you buy a used vehicle, before you even drive it off the lot, the second you sign your name to it, you're stuck with whatever problems it has. That's why the mechanic is your truth serum when you're buying a used vehicle.
21:46 Speaker 03 They're big money now. It's a big risk for you. You don't want to buy trouble.
21:52 Speaker 07 Okay, Tom in Colorado wrote in with this. My car lease is coming due and I'm getting the out the door buyout offers from several dealerships. So far, every dealership is adding on a documentation fee.
22:05 Speaker 03 The dreaded doc fee.
22:07 Speaker 07 Yes. The fee ranges between dealers with the highest being $800. This sounds excessive to me, especially since some states have capped the fee at $85 like California. Anyway, since I live in Colorado, I cannot buy the car from the company who I'm leasing it from. Instead, I'm forced to go through the dealer and their fees. My question is, can I contest this fee or am I out of luck and have to pay it?
22:33 Speaker 03 All right. So Tom, all right, first of all, let me explain, this is important, I explain background. So the dealers were really upset about people leasing vehicles and then at the end of the lease saying, hey, I really love this car. And turning around, they were just paying the finance arm of the manufacturer, the lease off, and they were getting cut out of the whole deal. So in order to buy peace with the dealers, the dealers now are gumming up the works and it become part of the process when all you're doing is buying out a vehicle you already entered into a lease for. And in your case in Colorado, you say you're getting gouged on the fee.
23:15 Speaker 03 To my knowledge, unless there's some prohibition specifically with your brand, you can go wider than Colorado. I mean, you could even think about 800 bucks. You go take a vacation in California and have your vehicle as yours when you get back. Why do you have to do it through a dealer in Colorado? Again, unless there's a geographic restriction in your lease, you could do it at any dealer of your brand, anywhere in the country, and you could fee shop elsewhere. Think about all the people that are buying new vehicles anywhere in the country. Most often, people will go 300, 400, 500 miles away
23:58 Speaker 03 and saving thousands of dollars on a vehicle purchase by buying it not where they are locally, but doing a much wider sweep. If you can, do the same thing with buying your vehicle at the end of the lease. And I think this is ridiculous. It shows why the dealer system is anti-consumer, and we need to make it legal in all 50 states that if manufacturers want to sell direct to the public, they should be able to do so instead of these extremely anti-competitive, anti-consumer laws that are adopted at the state level that require that manufacturers have to put all this extra cost in the system
24:43 Speaker 03 selling through dealers.
24:45 Speaker 07 Kate in Virginia says, "We were fortunate to have received my dad's 2010 Tacoma after he passed away. My 17-year-old son drives it now, and once he leaves for college, then it will go to his younger brother, and then eventually, Lord willing and the creek don't rise, to his younger sister. Having this extra vehicle has helped us tremendously, and buying a different vehicle, if this one would be wrecked or damaged, would be a hardship for us. I've heard you say that you don't need comp and collision coverage on an older car, but what if one of the teens was at fault in an accident and we didn't have coverage? Or they hit a deer? We are in a rural area with lots of them, and the car was totaled. Do you think it makes sense in our situation to have more coverage even though the truck is old?"
25:25 Speaker 03 How many deer have you hit in your life?
25:27 Speaker 07 Thankfully, knock on four mica, none.
25:30 Speaker 03 I've hit two. Yeah, not fun. Okay, so this is the beauty of the Toyota you have. The Tacoma is still worth so much. Sally of our crew looked up that depending on where you would, if you were to try to sell it right now, depending on the condition on a 2010, you'd get somewhere between about six to 10 grand, 10 at the high end. So that is still worth so much that you do want to obviously continue collision and comprehensive because most of us aren't going to be able to write a $10,000 check to replace the equivalent.
26:11 Speaker 03 Remember this, the insurers tend to give you something low wholesale. If you had to replace a vehicle that got totaled like this Tacoma, you're paying marketplace retail. So it's even higher than the values that Sally looked up. So you dumping collision comprehensive at this point on that Tacoma would not be a good idea.
26:35 Speaker 07 Fiona in California says, I have a question for you about paying off car loans. My 27-year-old daughter recently purchased her first new car all on her own. As a loyal listener, I knew your longstanding advice and the first thing we did was shop for an auto loan. She had the funds to pay cash for the full amount of the car, but she was looking to boost her credit score with a loan on her record. We went to our credit union who quoted us some rates, but they said that because she had never had a car loan, they could only offer her a much higher rate. When we went to buy the car, the dealer offered financing that was much better than our credit union. Since she wanted to have the benefit of a car loan, she decided to put most of the money down on the car and then finance a small portion of the total cost.
27:17 Speaker 07 Now, a few months into her purchase, my daughter is itching to not have to make a car payment. She has the full amount saved and just doesn't like having to make the payment, which includes some interest each month. Our question to you, how would you paying off this car loan quickly affect her credit? The dealer advised her to wait at least a year before paying it off. Is there any advantage or disadvantage to paying this off entirely in a short period? Yeah, I'm really proud of my daughter saving up all the money before she went to make this big purchase.
27:45 Speaker 03 Okay. Yeah, hats off to your daughter. Being in a position to pay cash, but voluntarily choosing to pay part of it in a loan because of trying to get her credit score. Her credit score is already likely good, but getting it higher. She qualified for the manufacturer's financing. She had really good credit already. So, blow that loan out. When she wants to, get rid of it. A lot of car dealers will ask you to please not pay off a loan that they originated with the manufacturer for a period of time, because kickbacks they get from the manufacturer only
28:28 Speaker 03 may stay in effect as long as the loan stays in effect for a certain period of time. But it wouldn't be a year. Most I've ever heard of is six months. So, even if she's trying to protect them, it's six months. Pay that thing off, be done. She would have had an auto loan. She paid it as agreed. She'll be good. And I know that people involved with lending would say, "No, no, no. You want the current history. She's paid the loan. She's got other forms of credit. She's good to go." And you've got to be so proud of her. I hope
29:08 Speaker 03 that you have really, really exciting weekend plans. And, gosh, maybe you're already ready for a long, extended Memorial Day holiday for the second half of May. Whatever it is, I hope that it's absolutely great. You hear me? Already talking about Memorial Day? I love time off from work.
29:38 Speaker 03 I never miss a vacation day. It's just my thing. I work hard when I work, but I don't work one more minute than I have to. That's just me. But have a great weekend doing whatever it is you're gonna do. And enjoy yourself. Know that we have wonderful information available for you all weekend long. Our Clark.com website, our Clark Deals website. And then if you want it on automatic pilot, our newsletters. I love them and they're free, which I love even more.
30:22 Speaker 03 You can sign up for our newsletters at Clark.com/newsletter or newsletters. And I'll be at your service Monday. But in the meantime, be empowered to save more, spend less, and avoid getting ripped off.
30:44 Speaker 00 Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5, only at McDonald's for a limited time.
30:57 Speaker 01 Price and participation may vary. Promotion pricing may be lower than meal pricing.
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