Credit cards were not among the forms of consumer credit that increased in November. (Photo Credit: CC BY-SA/Colin/Flickr)

Bloomberg reports that consumer credit rose for the second straight month in November, a sign that consumer confidence may be on the rise. The $1.3 billion November increase in consumer lending, paced by government-held student loans, followed a $7 billion increase in October.

Consumer credit increased in auto, education fields

Non-revolving loans such as auto loans and student loans were up by $5.6 billion, according to November figures. Revolving consumer credit continued its 27-month nosedive by falling $4.2 billion, which indicates that maintaining high interest debt over time is becoming less attractive to U.S. consumers. It also means that even though consumer confidence may be increasing, times when emergency cash is needed still lend themselves to products like payday loans rather than credit cards.

Positive economic signs, with more to come

Theresa Chen, a Barclays Capital Inc. economist in New York, reportedly told her clients that the road ahead will be long.

“Consumer credit is still rebounding off the bottom. This is broadly in line with the rise in household spending that we have already seen over the past few quarters,” she said.

Even though a full recovery is far away, November’s $1.3 billion consumer credit increase still outpaced the $500 million recovery many economists forecast for the month. This pleasant surprise, along with a larger than expected U.S. jobs increase and unemployment rate decrease to 9.4 percent, helped bolster the Standard & Poor’s 500 Index. The S & P 500 ended 2010 with a 13 percent gain.

November auto sales another positive sign

The November consumer credit increase translated into another good month of sales for the automotive industry. According to Bloomberg, auto sales hit a seasonally adjusted 12.26 million annual rate in November, followed by a further increase to 12.53 pace in December. Combined, the 37.04 million rate for the final quarter of 2010 was the strongest the auto industry has seen since 2008′s third quarter.

Sources

Bloomberg

The auto dealer exemption in the financial reform bill means shady auto financing practices will continue. Photographix.ca/Flickr photo.

The financial reform bill that was signed into law this month included an auto dealer exemption. The auto dealers’ exemption allows them to escape auto lending regulation that could have prohibited many common deceptive auto lending tactics. To get a better deal, first time car buyers need to be aware of these practices. They also need to do their homework before they get auto financing.

Lower car payments, higher interest rates

AOL Autos reports that the auto financing operations at dealerships, not auto sales, have become their real profit generators. Car dealers ask their customers what kind of payment they want, not the car loan interest rate they’re looking for. Then the dealership maneuvers to fit customers into the car payment they desire, regardless of the interest rate. An interest rate one or two points lower could save a car buyer hundreds or thousands of dollars over the life of the car loan. Car buyers need to be careful working with an auto dealer on car loan for their next vehicle.

Know about your credit score and dealers’ interest rate deals

Bankrate.com reports that dealers are middlemen working with lenders who give them wholesale interest rates. Dealers mark up those rates by up to 3 percentage points. Some dealers take advantage of car buyers who aren’t aware of what car loan interest rate they qualify for by writing them a loan for a higher rate. Know your credit score and what type of interest rate it qualifies you for.

Get approved for a loan before going to the dealership

A good way to know for sure what type of interest rate you qualify for is to get approved for a loan before you even set foot on the car lot. However, The New York Times reports that if a car buyer shows up already approved for a loan, dealers will try to find some other way to make money off them. Dealers will try to sell window etchings and service contracts or disability and other insurance. They might even try to force buyers into these auto add-ons by implying that the add-ons are a condition of getting a loan or getting a good rate on one — which is illegal.

Don’t sign anything that says loan approval is a condition of the sale

The Times article mentions a tactic called the “yo-yo.” A buyer drives away in the new car only to get a call from the dealership a few days later saying the car loan wasn’t approved at the current interest rate and contract needs to be rewritten at a higher rate. This can be avoided by getting the loan beforehand. If not, Bankrate.com says the buyer should ask the dealer to get finance approval from the lender first. It may mean a few extra days before driving away with new wheels, but it will be worth the wait.

While the 2009 Honda Civic is flashy, you have many options when buying a Honda Civic in Atlanta. Image from Flickr.

The Honda Civic is one of the top-selling cars in the United States, and if you are looking for a Honda Civic in Atlanta, used or new, there are a few things you should keep in mind. A used Atlanta Honda Civic can be a great deal, while a new Atlanta Honda Civic has the style and everyday drive ability the brand is known for. Research what type of Atlanta Honda Civic you want, line up auto loans and make a smart purchase.

Know your Atlanta Honda Civic facts

The Honda Civic has been in production since 1973 and has been sold in Atlanta and the rest of the United States since shortly thereafter. There have been eight generations of Honda Civic vehicles, and a ninth generation is planned. In 2006, the Honda Civic design split – one type of Civic to be sold in the United States and one to be sold in Europe. If you are shopping for a Honda Civic in Atlanta, you are most likely to find these U.S. specific models or the older-generation used Honda Civics. Once you find the Atlanta Honda Civic that you are interested in buying, get a Carfax or Autocheck report on it so you know exactly what kind of shape the car is in.

Get your Atlanta Honda Civic financing

Getting pre-approved for your Atlanta Honda Civic financing is one of the smartest moves you can make when shopping for a vehicle. By being pre-qualified for financing, you can negotiate much more easily with the car seller. You will also not get locked into a higher-rate loan that is offered at the car lot. Getting pre-qualified for your Atlanta Honda Civic financing is easy. It is just one form, and takes less than an hour. Once you are qualified for an auto loan, you can take that information to the seller and know that a Honda Civic in Atlanta will soon be yours.

After purchasing your Atlanta Honda Civic

As soon as you have purchased your Atlanta Honda Civic, be sure to get it licensed and insured. You should include the costs of this initial setup in your auto financing loan. If you get a used Honda Civic, take it to a mechanic you trust to make sure that it is in the shape the dealer promised. Be sure to make your monthly payments on your auto loan, and your Atlanta Honda Civic will last you years. Congratulations!

The Toyota Sequoia recall is the latest known failure of SUV stability control and the latest addition to the growing Toyota recall list. Flickr photo.

Another Toyota recall has been issued. Wednesday, Toyota Motor Corp. announced a program to upgrade software to prevent a loss of control in turns for about 50,000 Toyota Sequoia SUVs made in early 2003. The Toyota Sequoia recall is yet another fire for Toyota’s public relations department to extinguish. The automaker has been hemorrhaging money and losing market share. The growing Toyota recall list adds insult to injury in an anemic market for new cars and trucks. Toyota Sequoia recall notices will start going out to affected owners next month.

Adding to the Toyota recall list

The Toyota Sequoia recall to fix the vehicles’ electronic stability control follows closely on the heels of a rare “don’t buy” rating for the Lexus GX 460 issued by Consumer Reports. Tests on the Lexus GX 460 performed by the magazine exposed defects in the electronic stability control that could cause a rollover of the SUV in everyday driving. After the Consumer Reports “don’t buy” rating, production of the Lexus GX 460 was suspended. Consumers are reluctant to get auto financing for Toyotas because of a parade of bad PR that started in 2009 with widespread reports of braking and unintended acceleration problems.

Reason for Toyota Sequoia recall

In the Toyota Sequoia recall announcement, Toyota said drivers in vehicles without the upgrade could experience the stability control system briefly activating at low speeds – less than 10 mph – as the Sequoia accelerates from a stop. This could prevent the vehicle from accelerating as fast as the driver expects. No injuries or accidents as a result of this condition have been reported so far. Electronic Stability Control is a computerized system that coordinates the brakes and accelerator to help maintain control in unexpected situations.

Toyota Sequoia recall now official

The Los Angeles Times reports that Toyota has known about the Sequoia  stability control problem for seven years. Toyota fixed the problem on later models financed with auto loans. Dealers have been taking care of individual owners of early 2003 Toyota Sequoias if they complained about the problem. An investigation by the National Highway Traffic Safety Administration (NHTSA) of electronic stability control malfunctions in Toyota Sequoias turned up 163 safety-related failure incidents in the last 18 months. The latest Toyota recall contributes to a total of about 10.5 million Toyota recall notices worldwide in the last seven months for problems ranging from unintended acceleration to braking and corrosion.

The Toyota recall list

A few weeks before the Toyota Sequoia recall announcement, the Consumer Reports warning not to get a car loan to buy a 2010 Lexus GX 460  led to a recall of 9,400  of the SUVs. Soon after, a Toyota recall, this time voluntary, was issued for about 600,000 Sienna minivans sold in the U.S. because of possible corrosion in the spare-tire carrier cable. But there’s more. Recently the federal government slapped Toyota with a record $16.4-million fine for failing to inform the public that gas pedals in eight models could stick and cause sudden acceleration. It was the largest fine on an automaker ever levied by the NHTSA.

Ford stock has been soaring in 2010 and the Ford earnings report issued Tuesday showed a net profit as the auto maker plans to increase production. Flickr photo.

Ford stock is blowing up and the Ford earnings report released Tuesday shows its best quarterly performance in six years at $2.1 billion. The Ford Motor Co., the only Detroit automaker not bailed out of bankruptcy with money loans from the Federal government last year, has earned a profit for four consecutive quarters while its domestic rivals flounder. By slashing costs and increasing sales, Ford stock price and Ford earnings report numbers have shifted from negative to positive a year ahead of schedule, even as the market for new cars has yet to recover.

Ford stock price soars

Ford stock hit a five-year high Monday at $14.57. The Ford earnings report showed net profit equaling 50 cents a share, blowing away Wall Street expectations of 32 cents a share. One year ago, Ford stock traded at $1.91 a share, and the Ford earnings report showed a loss of $1.4 billion–a net loss of 60 cents a share. Introducing new products, closing plants and eliminating tens of thousands of jobs is working like Ford boss Alan R. Mulally said it would when he took over four years ago. Presenting the Ford earnings report, Ford executives said the company expects to continue selling cars for positive cash flow in the immediate future.

Ford earnings report fuels production

Ford said it planned to build 625,000 vehicles in the United States and Canada in the second quarter, 9 percent more than the first quarter and 39 percent more than same period a year ago. It plans to introduce new models later this year with the aim to capture a bigger piece of the growing market for smaller, more fuel efficient cars. Ford fans will be getting auto financing for new versions of the Fiesta and Focus, plus a retooled Edge crossover and a more fuel efficient Explorer SUV.

Ford stock analysis

A Ford stock analysis shows an increase in price of more than 40 percent so far in 2010. Ford’s market share in the United States rose to 16.6 percent in the first quarter, up 2.7 percent from the first quarter 2009. It outsold General Motors in February for the first time in 50 years. In addition to draconian cost cutting and increased focus on quality, Ford’s gamble to forgo the government bailout appears to have paid off in spades as the images, and sales, of GM and Chrysler have suffered. Toyota’s recall of more than nine million vehicles and the resulting publicity nightmare of the past six months probably hasn’t hurt Ford stock either.

Ford stock outlook

The Ford stock outlook hints that the Ford stock price may not sustain its current rally. The New York Times reports that Ford’s chief financial officer Lewis W.K. Booth said the company does not necessarily expect each of the next three quarters to be as strong as the first, particularly if an improving economy leads to higher interest rates later in the year. As if on cue, Ford stock was falling Tuesday after the company’s earnings report was released. As of noon eastern time the Ford stock price was down about 6.5 percent at $13.50 a share. Monday’s closing price for Ford stock was the highest since January 2005. Debt survival may be an issue in the Ford stock outlook. The company still has much more debt $34.3 billion, than cash, $25.3 billion.

Craigslist is run as a bare-bones operation, though sex ad fees bring in millions of dollars. Image from Flickr.

Craigslist — the central hub for free online classified advertisements, auto financing and personals ads — is once again finding itself at the center of multiple Craig’s List controversies. Connecticut’s attorney general has lambasted Craigslist for allowing sexually explicit advertising on the website and keeping the profits from that advertising. At the same time, a father in New York State has been arrested for posting his children for sale on Craig’s List. In Oakland, police are warning residents to be wary of Craigslist – a rash of violent robberies have started with Craig’s List postings.

Craigslist sex ads

This morning, Advanced Interactive Media Group, a company that specializes in estimating finances of privately held companies, announced that Craigslist sex ads will bring in a projected $36 million. This is a 22 percent increase from Craig’s List estimated earnings last year. These Craigslist sex ads have encountered numerous legal challenges in 40 states, with law enforcement saying Craig’s List is responsible for removing ads “used for illegal ends.”

Craigslist ‘joke’ gets dad arrested

At the same time the Connecticut attorney general was raising arguments with his letter to Craigslist, a New York dad is wishing he had not posted his ad. Joshua Stagnitto was arrested for “falsely reporting an incident” – after Child Protective Services was called. Stagnetto posted an ad on Craig’s List offering his children for sale, which prompted calls to CPS and led to his arrest. Perhaps he should have just gotten online payday loans instant approval. Joshua Stagnitto claims the post was “just a joke.”

Craigslist does not claim responsibility

Craigslist maintains that it is protected by the Communications Decency Act – as a service provider, it is not responsible for what users post. The CEO of Craigslist, James Bruckmaster, has also stated that “Misuse of Craigslist for criminal purposes is utterly unacceptable.” Many of the sex ads on Craigslist come close to the line – some blatantly offer prostitution, while others are more subtle. Craigslist terms of service specifically disallow illegal or pornographic posts. Either way, the $5 to $10 fees per ad bring in a majority of Craigslist’s income. The company is privately held and is currently embroiled in legal disagreements with minority owner eBay.

Sources:

NY Times
CNN
Mercury News
Telegraph.co.uk

Kelley Blue Book has added a free iPhone app to its quiver as the universal source for pricing used cars and trade-in value for auto financing. Flickr photo.

Kelley Blue Book is the universal source to determine the market value of used cars for auto financing. But Kelley Blue Book has come a long way since Les Kelley published his first guide to used car values in 1926. Today Kelley Blue Book has evolved from a pocket-sized pamphlet into a powerful web-based resource library and automobile search engine with its very own free Kelley Blue Book iPhone app.

Kelley Blue Book, used cars and much more

Kelly Blue Book demonstrated its clout Monday with the release of its choices for the Top 10 Green Cars for 2010. The announcement that ranks the Toyota Prius at the top of the list, received major coverage from news outlets across the U.S. The Kelley Blue Book list of Top 10 Green Cars for 2010 includes a selection of vehicles for all purposes, from the Honda Insight Hybrid at number two to the Chevrolet Tahoe Hybrid at number 10. Should someone want an auto loan for any of these cars, they can simply go to Kelley Blue Book, enter a zip code, and find the location of the dealer offering the best price.

Kelley Blue Book free iPhone app

The Kelley Blue Book free iPhone app offers a Seller’s Toolkit that lets you access the book value of the car you’re looking at by plugging your iPhone directly into the Kelley Blue Book database. You can also find trade-in value, dealer locations, read reviews and look at 360 degree views of the car in question. If you’re selling a car, the Kelley Blue Book free iPhone app even has quicklinks to Kelley Blue Book’s website for buyers to find your car, and tools to create slick ads for craigslist, Facebook, Twitter, e-mail or blog.

Kelley Blue Book used cars, trade in value

To determine the value of used cars and trade in value, Kelley Blue Book uses other factors besides make, model and miles. The condition of a used car is judged with tough criteria for car loans. Unless the used car is showroom immaculate, a well-kept vehicle will likely be judged as “good,” rather than “excellent.” Cars that need a little work are “fair” and smoking, sputtering heaps are “poor.” The most interesting factor in Kelley Blue Book used cars trade-in value is location, which is why you enter a zip code when you research used cars and trade-in value on the Kelley Blue Book site. For example, an SUV is worth more in Montana than Miami. A Corvette convertible is worth more in San Diego than North Dakota.

Kelley Blue Book, the used cars bible

Kelley Blue Book has been so successful in identifying its brand with its services the term “book” is universally understood as the benchmark price used cars and trade in value. Wheeling and dealing today includes standard terms like “what’s the book?” “over book” and “under book.” Kelley Blue Book has actually trademarked the terms blue book and blue book value.

Consumer Reports cars leading in reliability include the Honda, which tied Subaru at the top of the list.

Consumer Reports cars that made the magazines “Best 10″ list don’t include the government bailout automakers General Motors and Chrysler. The best cars for auto financing are being built by Honda and Subaru, according to Consumer Reports latest automaker rankings. The automaker showing the most dramatic improvement is South Korean carmaker Hyundai,jumping to fourth place from ninth last year. Among American manufacturers, only Ford improved over last year. It scored one point better to pass Mitsubishi for 11th place.

Government bailout bottom dwellers

Consumer Reports cars were rated for performance, comfort, utility, fuel economy and reliability. The magazine tested more than 280 vehicles. It’s unlikely many will be taking out auto loans on vehicles by government bailout automaker Chrysler, which finished dead last. Fellow government bailout recipient General Motors was second from the bottom after axing a third of its models. Asian automakers still lead the pack. Despite bad publicity resulting from braking and unintended acceleration problems, Toyota finished third behind Honda and Subaru, which tied for first.

Subaru/Honda lead automaker rankings

Consumer Reports cars that stood out included Subaru’s redesigned Legacy sedan and Outback wagon–vehicles that raised Subaru into a tie with Honda in the magazine’s automaker rankings. Subaru moved into a tie for first. The redesigned 2010 Legacy sedan and Outback wagon raised Subaru’s overall test score from 78 points to 81. That helped contribute to its tie with Honda in our rankings. Hyundai models that pushed the Korean automaker up in the rankings include the Genesis sedan, Elantra, Santa Fe SUV, and Kia Optima.

American automaker rankings

American products singled out on the Consumer Reports cars list include the redesigned Ford Fusion and Mercury Milan, referred to as “excellent overall packages that provide good performance and fuel economy.” Consumer Reports said that the reliability of Ford cars is average or above average. But Ford cars you may want to stay away from include the Taurus, F-250 pickup and Explorer SUV.s New GM models like the Buick LaCrosse and Chevrolet Equinox tested well, but with no track record as of yet, reliability for these cars wasn’t rated. Chrysler managed to squeak in a Consumer Reports recommendation for the Dodge Ram pickup.

European automaker rankings

Consumer Reports cars on the list from Europe include the Mercedes-Benz GLK small SUV. Volkswagen’s Golf was rated as excellent. The Passat and Audi A3 have improved to be merely average. And Volkswagen’s Touareg finished dead last in reliability. For people committing to car loans, reliability should be a primary consideration and Consumer Reports cars are have been a long-respected reliable source for the facts.

Reconsider the Lexus GX 460, which Consumer Reports found prone to rollovers like this one

The Lexus GX 460 earned a rare “don’t buy” warning from Consumer Reports following performance testing by the magazine. If you thought about getting auto financing to buy one, bear in mind that the tests exposed a handling problem with the Lexus GX 460 that may cause a rollover of the SUV in everyday driving. The Consumer Reports test of the Lexus GX 460 is the latest black mark to Toyota Motor Corp’s battered reputation that began last year with braking and unintended acceleration problems.

Lexus GX 460 earns Toyota a rare rebuke

The Lexus GX 460′s stability problems became evident when the rear of the vehicle broke away during what David Champion, the senior director of the Consumer Reports auto test division, said were “unusual turns.” The Lexus GX 460 skidded sideways through the turn before the SUV’s electronic stability control engaged. In an interview with the New York Times, Champion said “This is the first time we have seen it in an SUV with ESC,” referring to electronic stability control. Consumer Reports said it was “rare” for the magazine to “judge a vehicle’s performance not acceptable.” The last instance was with the 2001 Mitsubishi Montero Limited in 2001.

Lexux GX 460 unsafe in everyday driving

The Lexus GX 460 rollover potential goes beyond the test track. Mr. Champion told the New York Times that the Lexus GX 460 electronic stability control could fail in everyday driving. For example, speeding through a sharp curve on a highway off-ramp. The Lexus GX 460, with a high center of gravity, could easily roll hitting a curb or soft shoulder. “I wouldn’t want anyone else in it,” Champion said.

Dozens of SUVs safer than the Lexus GX 460

When it comes to committing to an auto loan for your next SUV, there are plenty of safe choices. Consumer Reports tested dozens of SUVs in addition to the Lexus GX 460. To cause what consumer Reports calls “trailing-throttle” or “lift-throttle oversteer,” the driver takes his foot off the gas while driving fast through a sharp turn. While the Lexus GX 460′s rear end slid toward the outside of the turn, electronic stability control quickly stopped the slide in the other SUVs.

Lexus GX 460: low volume could drop further for Toyota

Before Consumer Reports called out the Lexus GX 460 for rollover danger, Toyota wasn’t selling too many of them. Starting at about $52,000, the GX 460 is a small-volume vehicle for Lexus, Toyota Motor Corp.’s luxury brand. Only about 5,000 have been sold since November 2009. But the warning is the last thing the embattled automaker needs as it struggles to fight a litany of bad press. But the true impact could be seen as fewer car buyers borrow money to purchase any SUV manufactured by Lexus.

Victim of the Oriental yeti? Probably not. (Photo: Wikipedia)

British newspaper The Telegraph may be onto something with this whole Oriental Yeti thing. Since we live in a world where we must remain on 24-hour blob watch, it pays to know where and when the latest hairless mystery beast is captured. In the case of the Oriental yeti, hunters in the Sichuan province of China ensnared the creature, which they initially thought was a bear. Yet according to what hunter Lu Chin told The Telegraph, “It looks a bit like a bear, but it doesn’t have any fur and it has a tail like a kangaroo.” The Oriental yeti reportedly had a voice like a cat, and its keening cry sounded constantly, as if the beast were searching in vain for others of its kind. Or perhaps it’s crying for auto financing, so it can speed away from its captors in a mint El Camino with hydraulics.

Oriental yeti en route to Beijing for DNA tests

Is the Oriental yeti a bear, or is it a giant rodent? The hunters thought it might be the legendary bear-man that supposedly haunts the local forest, but then they thought better of it. The bear-man entered China’s witness protection program after a run-in with the mushroom men.

Is it right to call it a yeti?

Wikipedia classifies the yeti (aka Abominable Snowman) as an “ape-like cryptid” from the Himalayas. So it is definitely Asian in origin. Scientists may call the yeti a legend, but it is a legend that will never die. Unless its cousin Bigfoot forgets to administer regular insulin shots, as the Abominable Snowman is a known diabetic with a pathological fear of needles. Otherwise, the snowman would hook himself up. With regular income, it would even be able to apply for payday loans to get all the diabetic gear it needs.

What does the Montauk Monster think of these disturbing revelations?

Even if it is just a mildly decomposed raccoon, the Montauk Monster should be consulted in such matters of mystery. Some people think that the Montauk, New York, monstrosity is the by-product of animal testing gone wrong, while others see the Montauk Monster (and its Chicano cousin, El Chupacabra) as a symbol of childhood wonder, twisted by fear. Part of the excitement of being alive is being just a little bit afraid of a great unknown. What is the strange sound you hear your house make at night? From where did the Montauk Monster escape? And, as they all say about the Oriental yeti, when will it star in its own reality show?

Related Video:

Getting the Energy Star certification may be too easy. Image from Flickr.

When shopping for a new small or large appliance, the Energy Star label is supposed to be a guide of energy usage. A joint venture of the Environmental Protection Agency and the Energy Department, the Energy Star label currently functions as the guide for millions of dollars of government subsidies, as well as hundreds of thousands of consumer decisions each year. This is why it is especially worrisome that a recent Government Accountability Office audit was able to get over a dozen bogus products approved – everything from a gas-powered alarm clock that would practically require auto financing all the way to a space heater with fly paper attached.

Energy Star approved unrealistic products

When the Government Accountability Office submitted fictional products for approval, they were granted the Energy Star logo 15 times out of 20. Energy Star certifications were offered to products that claimed 20 percent more efficiency than any other product on the market – with absolutely no questions asked. A bogus air cleaner that was really a space heater with a duster and fly paper taped on was also certified.

Energy Star partnerships

Beyond approving products that were bogus or improbably specified, the GAO report on Energy Star also found that companies could easily get certified as partners. Once a company is certified an Energy Star Partner, they are allowed to use the Energy Star logo. This means products that carry the Energy Star logo may or may not have ever been tested by the EPA and Department of Energy. In other words, getting an Energy Star label may be easier than getting instant payday loans.

Energy Star requires outside certification?

For some products, the Energy Star label requires that the manufacturer provides “independent laboratory certification” of their energy savings claims. This includes products such as fluorescent lights and energy-efficient windows. However, fridges, washing machines, dishwashers, air conditioners, water heaters and more are not necessarily verified.

Changes to the Energy Star system

The Environmental Protection Agency and Department of Energy have both put out statements responding to the GAO report. The Energy Department has “promised to set up a system of independent verification of products.” No matter what happens, it is certain that the Energy Star logo and Energy Star Certification need some serious attention – from regulators, their own government agencies and the public.

Sources:

G.A.O. Report 10-470

Millions of misclassifications

An article posted on the BNET web site states that the IRS estimates that more than half of the approximately 5 million workers being paid as independent contractors should be reclassified as employees. MBO Partners, a business service firm specializing in placement of consultants and freelancers, claims that independent contractors are currently the fastest growing segment of the American workforce.

Cutting costs can be risky

Independent contractors are invaluable to many businesses, in terms of flexibility as well as talent.  They can be engaged and disengaged without the red tape and labor burden associated with hiring full-time employees.  Simply put, it costs less to pay independent contractors.  Employers who improperly classifiy workers as independent contractors, however, risk liability for back taxes and significant fines, even when the misclassification is unintentional.

IRS requirements for classification of employees and independent contractors are strict, but because employers stand to save so much money by classifying workers as independent contractors, they routinely disregard the rules. When employers pay independent contractors and report the compensation on IRS form 1099, they do not pay the payroll taxes and unemployment insurance required when employee compensation is reported on W-2 forms.

IRS audits may have a domino effect

According to CNNMoney.com and Gene Zaino, president and CEO of MBO Partners, most states now share data with the IRS and a noncompliance finding by the IRS is likely to lead to issues with state labor departments and other state agencies as well.  Given the new IRS compliance agenda and the interconnectedness of federal and state tax agencies, businesses hoping to avoid paying into unemployment insurance funds should take steps to verify independent-contractor classifications.

Businesses and workers should verify classification status

Businesses that utilize independent contractors should review applicable state and IRS classification guidelines or consult a tax attorney.  Workers or employers who are uncertain about classification can request a status determination by completing and filing IRS Form SS-8.

Good news for some

As the IRS heightens enforcement of classification rules, the cavalier hiring and firing of independent contractors may become a thing of the past. This is good news for workers who’ve gone years without social security or unemployment entitlements, and who’ve had to pay self-employment taxes as a result of misclassification. Classification as an employee also makes it easier to qualify for auto financing, home mortgages, payday loans and other forms of consumer credit.

Many Toyota drivers are concerned for their safety. Image from Flickr.

Just days after Akio Toyoda apologized to Congress for the multiple recalls of over 10 million Toyota vehicles, a runaway Prius in San Diego is making headlines. While some buyers are looking into auto financing to get the now-reduced cost vehicles, Toyota has recalled several models of its popular Prius hybrid. Toyota has also recalled Avalon, Camry, Corolla, Highlander, Matrix, RAV4, Tacoma, Tundra, Sequoia, and VENZA vehicles. These recalls threaten not only driver’s safety, but is costing the company millions of dollars.

The runaway Prius in San Diego

As reported by the Los Angeles Times article, Toyta Prius owner James Sikes was accelerating to pass another vehicle when “I pushed the gas pedal to pass a car and it did something kind of funny . . . it jumped and it just stuck there.” Mr. Sikes tried to get control of his runaway Prius in several ways, including stomping the brakes, attempting to manually move the accelerator pedal, and putting the vehicle in neutral.

Runaway Prius tailed by California Highway Patrol

Eventually, he called the California Highway Patrol, who sent officers that talked him through cutting power to the vehicle and getting it off the road. The runaway Prius is now going to be examined by a Toyota “field technical specialist” as well as National Highway Safety officials. Mr. Sike’s runaway Prius had been recently taken to the dealer, where he was informed that his Prius was not subject to the Toyota recall.

Runaway vehicles blamed for 56 fatal accidents

The U.S. government has recently launched an investigation into the “timeliness” of Toyota recalls. There have been up to 56 fatal accidents blamed on the alleged acceleration problems with Toyota vehicles. Toyota claims the “sticky” acceleration pedals are due to pedal and floor mat design issues. Toyota claims that the recall fixes these problems, and they are ready for auto loans once again. There are some, though, that blame the problem on Toyota’s electronic acceleration system.

What to do if you are in a runaway vehicle

If you find yourself in a runaway Prius (or any other runaway vehicle) there are a few things that you definitely should and should not do. Thanks to the Washington Post for these pointers.
You should NOT:

• Use your hands to try and adjust the accelerator pedal. This could cause you to lose control of your vehicle.
• Immediately cut power to the vehicle. This seems a logical thing to try, but turning off the vehicle cuts power to the steering and braking system as well, and can lead to accidents.

You SHOULD:

• Put the vehicle in neutral. This will disengage the wheels from the engine, and slow down the car.
• Turn on your emergency flashers. This will let other drivers know there is something wrong.
• Steer carefully to avoid other vehicles.

Weakened incomes plus increased spending equals increased consumer debt

Although there are signs that things are picking up, many experts believe recent economic growth cannot be sustained without increased spending by consumers. Consumers may be doing just that, thanks in some part to payday lenders.

The Federal Reserve has reported that in January 2010 U.S. consumer debt increased for the first time since January 2009. According to MarketWatch, in January 2010 the total seasonally adjusted debt (a measure of total debt incurred by individuals) rose at an annual rate of 2.4% and increased by $4.96 billion, for a total of $2.46 trillion.

A minority opinion is borne out

Based on a survey of economists, MarketWatch had expected a $6 billion decline in January. Instead, January 2010 marked the largest increase in consumer debt since January 2008. Not all the experts agreed with the forecasted decline and a few even predicted an increase.

According to MarketWatch, Ed McKelvey, an economist for Goldman Sachs believed that weakened incomes combined with recent reports of increased consumer spending could only mean that consumers were purchasing more items on credit. The Federal Reserve report concerning the January 2010 debt increase now bears that out.

Personal loans are the main source of the increase

Non-revolving debt rose by 5% or $6.62 billion to make up the lion’s share of the overall debt increase. Non-revolving debt includes such things as such as auto loans; personal loans including easy cash loans, overnight loans, and other types of internet loans; auto financing; and student loans. Not surprisingly, given all the recent consumer-unfriendly changes concerning credit-card borrowing, such as reduced lines of credit and higher interests rates, credit-card debt decreased. In fact, January 2010 was the 16th consecutive monthly decrease in overall consumer credit-card debt. Credit-card debt dropped by 2.4% for a healthy decrease of $1.67 billion, bringing the national total down to $864.4 billion.

Toyota recall… Honda recall… GM recall… Nissan recall… will Ford be next?

Who can say, but they all do seem to be falling like dominoes lately. The most immediate safety concern covered by the Nissan recall involves a brake-pin that can “partially come loose and cause a loss of normal braking ability,” The Street reports. The following vehicles from the years 2008 through 2010 fall under the scope of the Nissan recall:

• Nissan Titan pickups
• Infiniti QX56
• Nissan Armada SUV
• Nissan Quest minivans

According to Nissan, no injuries or accidents have been reported that related directly to this most recent Nissan recall.

Are we out of gas or what?

A faulty fuel gauge could certainly be inconvenient, but in most cases it would not place a driver in physical danger. While specific information regarding the exact problem with certain Nissan fuel gauges has not been made specific, it is known that Nissan plans to fix the problem. Vehicles in the Nissan recall with fuel gauge issues include the following cars from 2005 through 2008:

• Nissan Titan
• Nissan Armada
• Infiniti QX56
• Some Nissan Frontier pickups
• Some Nissan Pathfinder and Xterra SUVs

According to The Street, “Nissan shares were shedding 14 cents or 0.9 percent, to $15.86 in recent trading.” That is certainly not a welcome sight for the automaker, but it could definitely be worse. It is unclear whether the automaker is currently in need of credit counseling along the lines of GM, the bailout king of American carmakers.

What should you do if your Nissan or Infiniti is affected by the Nissan recall?

Contact Nissan Consumer Affairs via their Web site or call (800) NISSAN-1, or (800) 647-7261. If for some reason you need the department’s mailing address it is P.O. Box 685003, Franklin TN 37068-5003.

Related Video:

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If you’re in the market for a new or used car or wondering if there’s a way to lower your monthly payments on the car you own now, check out the new Car Deal Expert website. It’s a great resource for anyone who owns a car or is thinking about buying one – and that’s a lot of people. Car Deal Expert can save you thousands of dollars by helping you find the very best car loan available.

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Improved bargaining power

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Moving on

The past few years have been economic nightmares for lots of people, but that doesn’t change the fact that most people still need cars just to get to and from work. Lots of people today are afraid to apply for a vehicle loan because of damaged credit scores resulting from the loss of a home or job. But buying a car and making regular payments on the loan can help repair the damage done. If you’re lucky enough to be back on your feet with a job, making car-loan payments like clockwork can do your credit score a world of good.

Getting an answer

There’s a comforting anonymity in applying online for a loan at Car Deal Expert. If you don’t qualify, at least you have an answer, and no one’s going to know but you. But if you don’t apply, you’ll never know; and if you do apply, you just might be pleasantly surprised. Best of all, if you qualify for a loan through Car Deal Expert, you can rest assured you’re being offered the best terms available.