Pod Insights The Clark Howard Podcast 06.02.25 Clark’s Auto Loan Directive / Skimmer Scam Prevention About this episode June signals upcoming road trips and today, Clark talks about some transportation hazards to avoid. First, when buying a vehicle, know how significant the length of the loan can be to your financial health. Also, skimming scams at gas pumps and beyond - have gotten more sophisticated. Clark shares 2 ways to protect your money. Auto Loan Warning : Segment 1 Ask Clark: Segment 2 Skimming Scams: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Are You Following Clark’s Maximum Auto Loan Length Rule? Clark.com Car Loan And Payment Calculator Bezos-backed Slate Auto reveals its new customizable $20,000 EV Can I Sell My Life Insurance Policy? USA TODAY: Tips to stay safe from skimming scams #1 Way To Protect Yourself From Credit Card Skimmers Scam Alert: Think Twice Before Scanning QR Codes 5 Things to Know About the Costco Car Rental Program Is Annual Travel Insurance Worth It? Today's Top Travel Deals 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
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0:30 Speaker 01 Members who switched to USAA Auto Insurance saved an average of $80 a month. All you have to do is switch once and then enjoy the same excellent service year after year. Visit usaa.com/aut quote to see how much you could save.
0:43 Speaker 00 Restrictions apply.
0:50 Speaker 02 It's great to have you here on 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. It is my favorite month of the year. It's June. Why? Because we get the most daylight in the northern hemisphere in June of any month all year. And do I love that. At the same time, I'm a little down because it's something I read from Edmunds. I'm going to share with you about what people are doing with vehicle loans they're taking out. It's driving me crazy.
1:33 Speaker 02 And I gotta watch my blood pressure talking about this. Speaking of cars, road trip, it's summer, right? Well, I know officially it's not summer till around my birthday. But there's a scam that has increased in sophistication you need to know about when you're on the road. And I'm going to tell you how to protect yourself. But right now, listen to this, listen to this, listen to this. Edmunds reported that so far this year in data they have access to, which covers the
2:10 Speaker 02 first quarter of the year, one in five vehicle loans being taken out are seven-year loans. Seven-year loans.
2:24 Speaker 02 That means if you buy a new do you use vehicle or a new vehicle, you're still going to be paying for it in 2032.
2:34 Speaker 02 2032. This is such a horrific thing. You are upside down big time. Year after year after year on your loan. Taking out a seven year loan. There are people taking out longer ones, eight year loans. But let's just stick to this one in five people taking out seven year loans. You're letting them con you as a payment buyer. So what do you think you can afford per month? That's what they say. You know what happens with those seven year loans? You're paying so much more interest on that loan over the life of it.
3:15 Speaker 02 And always owing more by many, many, many thousands of dollars than what the vehicle's worth. This is a rotten, terrible thing. Now, part of it is because the cost of vehicles ran away from people's ability to afford them. No doubt. No doubt that's true. But this is not the solution. The solution is going to sound trite. The solution is either you keep driving what you got. That's not really trite. This is what's trite. Or you buy a cheaper vehicle. Jeff Bezos sailing around on the world's biggest yacht.
3:59 Speaker 02 Brainstormed a new vehicle. From his auto company he's starting called Slate. You've probably heard all the publicity about this last month. Starting at 20 grand. 20 grand. That's been a long time. Since it's been a conversation, a vehicle that costs 20 grand or less for a new vehicle. When you consider the average used vehicles being sold for more than that. In Europe, there's a company called Dacia, I think is how you say it, D A C I A. That sells new vehicles that people have really loved some European countries. A Dacia model is now the number one selling vehicle in the country.
4:45 Speaker 02 Why? Because it sells for about 12,000 US dollars new. There's a hunger in the marketplace for more affordable vehicles. Who's going to do it? Who's going to make it happen? Ford did a great thing with the Maverick pickup truck. Selling the average Maverick for less than half. What the average new pickup truck driver pays for a pickup truck. Starting below 30 grand. There is a sweet spot in the market to be served in the twenties. And so Jeff Bezos, I hope you can make this work. And I hope when your yacht pulls into ports, that you drive around in your Slate Auto.
5:31 Speaker 02 But good for you thinking about it. And remember my rule on auto loans? If you can't afford the payment on a 42 month auto loan, you can't afford that vehicle. Period. Cold. Fact. True.
5:50 Speaker 03 Mic drop. You can't though, because you wear your mic.
5:54 Speaker 02 Yeah.
5:55 Speaker 03 On your head.
5:55 Speaker 02 I've never understood mic drop anyway.
5:58 Speaker 03 I just drop it and walk away.
6:00 Speaker 02 I don't understand.
6:01 Speaker 03 All right, let's go to questions.
6:03 Speaker 02 That's real life. I don't understand anything about real life.
6:05 Speaker 03 Give the listener the mic. Nancy in Alabama, you are up with your question. Nancy says, I wanted to let you know about an interesting option I experienced regarding a refund gift card I received from Verizon. I received the gift card after transferring my father in law's phone to my family plan. I think it was for $165. I listen to your show.
6:25 Speaker 02 Wow, that's a lot.
6:25 Speaker 03 Every day, so I dug in and read the entire letter that came with the card and the back of the gift card for the fine print. In the letter, there was an option to transfer the entire gift card balance with no fee into my checking account.
6:38 Speaker 02 I love that.
6:39 Speaker 03 I've never seen this with any other gift card. I immediately followed the instructions to transfer the balance of the card. The credit was processed for the full amount in 48 hours. Please remind your listeners to read the letter that comes with the gift card from a merchant to see if this type of transaction is available. Otherwise, I would be stuck with a gift card that would be more than likely have a balance I would never be able to completely use.
7:00 Speaker 02 I hate these refund cards because they're counting on what's known as breakage, which is that you leave some or all of the money forgotten about unused. Any method you can come up with, like we had somebody's suggestion recently, to use it to pay a utility bill and get the money off.
7:21 Speaker 03 Amazon gift cards.
7:22 Speaker 02 The card right away.
7:23 Speaker 03 If you're an Amazon user.
7:25 Speaker 02 What about Amazon?
7:25 Speaker 03 People say that they can buy Amazon gift cards with the card amount.
7:29 Speaker 02 Oh, okay.
7:30 Speaker 03 If you use it. All right. This is from anonymous. Hi, Clark. Starting with my first well-paying job in 2016, I began buying my wife one nice piece of jewelry a year from our local jewelry store or from reputable stores such as Tiffany's, Saks, Neiman's. I also purchased from warehouse stores such as Costco and Sam's, which can have some very nice jewelry.
7:51 Speaker 02 I mean, this is really funny for me because I start tightening up thinking about Saks, Neiman's, and Tiffany's.
7:58 Speaker 03 But now you're relaxed.
8:00 Speaker 02 Now I'm relaxed because they're also buying at the warehouse clubs. Yep.
8:04 Speaker 03 I always purchased precious or semi-precious stones set in gold or sterling silver, and I never spent more than $1,000 a year. Imagine my surprise when I went to purchase a pair of pearl and diamond earrings for my wife for Christmas in 2024, and the price had jumped up by 33% from the tag. Fortunately, the store sold the earrings to me for the price as marked without the 33% increase. I decided to get my wife's jewelry appraised for insurance purposes. To my shock, my wife's jewelry, particularly the precious or semi-precious stones set in gold, had drastically increased in value. In fact, my wife's jewelry appraised for 386% more than I had paid out of pocket. I understand that resale value can only be
8:45 Speaker 03 33% of appraised value and occasionally more than 100%. But even given that number, her jewelry would have still increased in value over 100% in eight years. What are your thoughts on jewelry as an investment? Not particularly liquid, but perhaps not a bad purchase for long term?
9:02 Speaker 02 Okay, I appreciate this post anonymous. This is so interesting. So you answered the question by your statement that actually your guess that jewelry is worth for you as an owner, selling it into the market about a third of its retail value? That's a little more generous than I usually hear. That's why jewelry is not normally an investment. Ensuring it for replacement cost is very smart if a piece gets lost or stolen. It's great you've done that, but I would not look at jewelry as an investment because
9:46 Speaker 02 it's different than other things of value that the buy/sell spread is so huge for a consumer trying to sell something off.
9:57 Speaker 03 This one's from Cindy in Georgia. I have a $1.2 million term life insurance policy that expires in about three years. It was necessary for a business loan, but that loan has now been paid off. I certainly don't need that much life insurance and heard that you can sell your policy. I would love to get any tips if this is in fact true.
10:16 Speaker 02 So Cindy, the policies you can sell are what are known as permanent life insurance policies that don't have a sunset on them like yours does in three years. Generally, if you were to sell into the secondary market, this is gruesome to say, but you would have had to have been diagnosed with a terminal illness. Thank goodness, that's not the case. And this is just key person life insurance that's going to sunset. So you could stop paying the premiums if there's no need for the money, but because it may be a level term policy that even as you age, the premiums don't go up, it's worth
11:01 Speaker 02 it for your survivors just to keep the policy in place for three more years potentially. But otherwise, if you just want to wash your hands of it, just don't renew it would be a fine thing to do. Or you may have a privilege to convert it for premiums already paid into some value of coverage. Depends on the contract of the policy.
11:29 Speaker 02 Coming up ahead, we got to talk about when you're out on the road paying for things this summer, got to know the criminals are very active right now and becoming steadily more sophisticated.
11:45 Speaker 00 When you shop pickup at Kroger, you can expect the savings you love and fresh groceries selected just for you. Our associates are committed to getting every detail right, carefully handpicking your items, checking for quality and freshness, and packing your order with care. Because bringing you fresh, quality groceries is what we do best. And right now, enjoy $20 off your first online order of $75 or more. Restrictions apply. See site for details. Kroger, fresh for everyone.
12:16 Speaker 02 An ugly crime that goes back at least 15 years has now become more sophisticated because it's getting harder to steal people's money this way. It's skim scams, or skimmer scams, or skimmers, whatever law enforcement calls them. Here's what it is. A criminal goes to a place, could be pay at the pump at a gas station, or wherever they get access to, and they put a skimmer on the debit and credit card reader. The skimmer works off
12:55 Speaker 02 of reading the old magnetic stripe, or strip, whichever you call it, on the back of a card. It's able to read it, and if it's a debit card, they tend to have a device that captures you punching in your four-digit code, your PIN. So they both capture the information from the strip on the back of the card, and they capture your code. And then they're off to the races. And the real danger here is with debit cards. Because debit cards attack your checking account. And there you are off on a wonderful vacation, and you
13:37 Speaker 02 go to pay for something, your card's declined. And why is it declined? Because without you realizing, you used Pay at the Pump on one that had a skimmer on it, or anywhere you used the card that had a skimmer, your checking account wiped out.
13:55 Speaker 02 And your vacation, unless you've got other ways to pay for things, is ruined. So my safest rule is unless your finances only permit you to use a debit card, do not use a debit card. Because you don't have the protections with it that you have with a credit card. That's number one. Number two, if you need to use a debit card, contact your financial institution. Make sure your debit card has a chip in it. A chip in it. And you pay by chip, not by swipe.
14:37 Speaker 02 The chip protects you from the skimmers. Nobody's cracked that one yet. But if it's just the stripe on the back, you're asking for trouble. If your debit card provider will not provide you a card with a chip in it, they don't care about you at all. They are harming you, putting you in harm's way. You want that chip.
15:08 Speaker 02 Because that's a way you protect yourself. If you are going to a gas station, and you're using a debit card, and all you got is the card with the strip on it, you go inside and you pay for your gas. You do not do pay at the pump. Because the criminals have gotten so sophisticated, you can't tell they put a skimmer there. You can't tell.
15:39 Speaker 03 Even if you pull on it, you can't?
15:41 Speaker 02 You know, that's what the old law enforcement thing is, but they've gotten so good at it. So good at being bad.
15:48 Speaker 03 The QR code thing too is brutal.
15:51 Speaker 02 Yeah, you want to talk about QR codes of parking?
15:54 Speaker 03 Yeah.
15:55 Speaker 02 Okay. If you're in an urban area, or you're at a beach, or whatever, and they've got a barcode you're supposed to scan to pay for your parking. All over America, criminals are duplicating stickers, putting them on the signage.
16:16 Speaker 02 And then when you scan that with your phone, the barcode it takes you to is not for the people you're supposed to pay for parking. It's for the crooks. Just know that. You're best off. Well, I don't like to pay for parking. But if you're at one of those places, go up to the sign. Feel if there's an add a sticker on there. If it's the original printed metal sign, you're okay.
16:45 Speaker 03 I mean, it's normally for an app. Like it's taking you, it's supposed to take you to an app. So I look for the name of the parking. Like there's, you know, there's several that are various chains around the country of these parking lots. And so I'll look for the app in the app store rather than scanning the QR code. You can do it that way.
17:00 Speaker 02 But with municipal parking, many times you're going straight from that.
17:04 Speaker 03 To a payment.
17:04 Speaker 02 To a payment platform.
17:06 Speaker 03 There should be a website shown on there too, though, because people have trouble with. I mean, I don't know. I just never.
17:11 Speaker 02 This, this whole thing with the QR codes being bogus. It's amazing how something so good in terms of simplifying things for people, ended up to being a direct gateway to criminals. All right, so I don't want to make you paranoid in life. I want to make you careful. And again, the skimmer scam's been around for like 15 years. Don't be taken this summer by it. And that debit card, really think about it before you use it.
17:43 Speaker 03 All right, let's go to questions. Susan in Maine says, I want to take the ferry from Bar Harbor, Maine to Nova Scotia. It will cost $400 round trip to transport my car. Should I rent a car?
17:54 Speaker 02 How fun that'll be, though, to go on that ferry.
17:57 Speaker 03 Should I rent a car in the US or rent a car in Canada and save money?
18:01 Speaker 02 So I can tell you, when you're going in summer, the rental cars can be very expensive in Nova Scotia, but it will likely be cheaper. The only way you know for sure, get on, I hope you're a Costco member, go to Costco Travel. Use their rental car thing because their rental cars are cheaper than most anybody else's. See what the cost of a rental car is in Maine, or if you're going to get in Boston, or whatever, and then compare it versus renting in Nova Scotia. Odds are, it'll be cheaper to rent the car in Canada and avoid the $400 round trip of the ferry transport.
18:46 Speaker 02 You'll have some costs potentially for parking in Bar Harbor at the ferry. Don't know if you have to pay for parking there. So that'll defray some of the, will reduce some of the savings you'd have. But it should be cheaper in Canada. And what a wonderful trip you get to take. Both my brothers went on a golfing trip to Nova Scotia years ago, and they still talk about how fun it was going there to play golf.
19:15 Speaker 03 That's awesome. All right. Dennis in Florida wants to know about travel insurance annual policies. He says that one of the big providers offers annual policies, and they seem like a good idea for folks who travel four times or more per year. Any advice, Clark? And also, just so you know, there was a Clark Stinks from someone who has one of these, who said, "You stink because you never talk about them." But I'm not going to read it because of this question.
19:37 Speaker 02 We also have an article at Clark.com on what are the goods and bads and what you need to know when you go shop for an annual travel insurance policy. And yes, if you travel frequently through a year, you will save money with an annual travel policy. If you do have a claim, though, you'll find that it's no friendlier a process, even though you save money on the policy buying an annual versus buying a per-trip policy. The insurers make the claim process generally...
20:14 Speaker 02 Pretty complicated and difficult. One other thing about the annual policies, got to really think through what you're insuring. Are you insuring illness? Or what is it you hope to ensure? Are you looking for matter of fact, the policies that are available annually cover all different kinds of circumstances. You have to figure out what Dennis are the most important elements you want to ensure.
20:42 Speaker 03 All right. And this came in from James in Georgia. My question concerns when an airline has a sale, does the airline generally discount all classes of service except for first class, like economy, main cabin, comfort, et cetera? Or is it only economy class that goes on sale? And if all classes go on sale, is it consistently the same percent off for all the classes?
21:03 Speaker 02 What a wonderful question, James.
21:05 Speaker 03 Former travel agent Clark Howard.
21:07 Speaker 02 Yes, yes. So the discounting is not consistent. Some of the airlines to the South Pacific to, you know, to Australia, New Zealand, some of the airlines to Europe, when they have an airfare sale, it's across all classes of the aircraft. But for flights within the United States and flights elsewhere in the world, usually the sales are very heavily class focused. So they will be economy, basic economy sales. Much more rarely will the sale include the front of the plane or the mid thing premium economy.
21:53 Speaker 02 So usually the airline's most price sensitive customers are the customers in coach. That's where most of the seats are. That's where most of the action is. And that's why the sale activity is also there because that's where price sensitive travelers are. But this year. We will see a bunch of front of the plane sale fares on routes that are very heavily geared towards business travelers because business travel has cut back with concerns about the economy and airlines are going to be more aggressive with front of the plane sale fares.
22:37 Speaker 02 And in the summer, especially front of the plane sales from the US to Europe. I'm already seeing quite a few with the business class fares dropping, this is not going to sound like a deal, but the business class fares dropping into the 2,000 to 3,000, you know, in the 2000s round trip where a business traveler, round trip business class fare to Europe is most commonly over $10,000. So the sales in summer are usually better in business class because there's not as much business travel, but the plane's already
23:19 Speaker 02 there. And this year, because of the slowing economic activity, there's even a bigger emphasis on airlines offering sales in the front of the plane. Back of the plane fares for Europe and coach have not been great for June and for July, but there have been a lot of very, very good ones for August. And we'll see how that pattern plays over the next several weeks. And I want to thank you so much for joining us on today's show. And I hope that
23:58 Speaker 02 something today will help you in your life, will benefit you in some way. You'll say, "Oh, I didn't know that." So that you pick up what I hope, which is new pieces of knowledge that give you more power. That's what we're about. So that you learn ways to save more and spend less and always avoid getting ripped off. Have a great rest of your day.
24:32 Speaker 00 When you shop pickup at Kroger, you can expect the savings you love and fresh groceries selected just for you. Our associates are committed to getting every detail right, carefully handpicking your items, checking for quality and freshness, and packing your order with care. Because bringing you fresh, quality groceries is what we do best. And right now, enjoy $20 off your first online order of $75 or more. Restrictions apply. See site for details. Kroger. Fresh for everyone.
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