Average U.S. car is 11.4 years old, a record high

— If the cars you see on the road these days seem a little run down to you, you might be on to something.

The average age of vehicles on America’s roads has reached an all-time high of 11.4 years, according to the market research firm Polk. And that average age is sure to keep climbing, the firm said.

The decline in new vehicle sales during the recession pushed the average vehicle age higher, as people kept their old cars running longer, according to Polk. The number of vehicles over a dozen years old is growing especially rapidly, the firm said.

This trend of cars growing older has been building for a long time. In 2002, the average vehicle was 9.6 years old. In 1995, it was 8.4 years.

America’s aging car fleet is good news for companies that sell auto parts and provide repair services, Polk said.

“[I]ndependent and chain repair shops should be paying close attention to their business plans and making concerted efforts to retain business among the do-it-for-me (DIFM) audience, while retailers have a unique and growing opportunity with potential consumers wrenching on their own vehicles,” Polk said.

Even as auto sales bounce back, Polk expects the number of vehicles 12 years and older to keep expanding, growing by more than 20% by 2018.

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Congress OKs cheaper student loans

— The House on Wednesday approved a bipartisan that ensures lower interest rates on loans for students heading to college this fall.

Members of the House voted 392 to 31 to lower rates for undergraduates taking out government loans this school year to 3.86 percent — cheaper than the 6.8 percent interest rate that kicked in on July 1. The new rates would be retroactive and apply to loans taken out after July 1.

The bill, which passed the Senate last week, will now go to the President Obama’s desk to be signed into law.

It has provisions for rates to go higher in coming years.

As House members debated the bill, many Republicans took credit for the deal. They noted that the Senate version wasn’t much different from their own student loan bill, which linked rates to the bond markets.

“My colleagues and I have been fighting for months for a long-term market-based solution that will serve students and taxpayers, and the legislation before us today will do just that,” said Minnesota Republican John Kline, who runs the House education panel.

The new rule doesn’t apply to loans that students get from private lenders. It only affects Stafford loans, which are made by the U.S. government to help finance a college education.

On July 1, the interest rate on subsidized Stafford loans doubled from 3.4 percent to 6.8 percent, affecting 7.4 million students. The subsidized loans are based on financial need and account for about 26 percent of all federal student loans, according to the Congressional Budget Office.

Unsubsidized loans and graduate loans were already paying 6.8 percent interest rates.

The latest bill helps all students, with the basic principle being that it ties student loan rates to the bond markets.

This fall, undergraduate students will pay an interest rate of 3.86 percent on their loans. It is comprised of the yield on the 10-year U.S. Treasury note on June 1, plus an additional 2.05 percent. Graduate students will have to pay 5.4 percent on loans this fall, or 3.6 percent over the 10-year Treasury.

If rates on Treasury notes rise, so would student loan rates under the new deal.

However, the bill makes provisions to protect students if bond yields were to spike. Loans for undergraduates will be capped at 8.25 percent and for graduates at 9.5 percent.

Over 10 years, the interest that government collects on student loans is expected to raise $715 million. It will go toward reducing deficits.

The Obama administration has been pushing for the deal, even though left-leaning Democrats opposed the bill for hiking rates in coming years.

Student loan debt has skyrocketed in recent years, as have delinquencies, making it a pressing political and financial issue for millions of Americans. Many students graduate from college deep in debt and without jobs. It is second only to mortgages as the largest debt that consumers carry. In 2011, students on average owed nearly $27,000 in loans.

— CNN’s Ted Barrett and Deirdre Walsh contributed to this piece.

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Performing a mid-year financial checkup

Why is performing a mid-year financial check-up important? Performing a mid-year financial check-up is akin to visiting a doctor for an annual physical or visiting an auto mechanic for a periodic tune-up. The purpose is two-fold; the first is preventative that is, identifying and addressing potential issues before they become significant problems. The second purpose is diagnostic, that is, identifying and addressing any problems that may already have materialized.

April or May are good times of year to perform such a check-up, particularly if you have already filed your tax returns. There is a treasure trove of information on your tax return that can assist you in reviewing your financial situation. Listed below are several areas in which your tax return can help you update your financial health:

Updating your budget. Your tax return is the perfect tool to help you update your budget, as it contains all your sources of income, and may contain some information on your expenses as well. Periodically reviewing your budget is crucial to ensuring that you live within your means and stay on target to meeting your financial goals, objectives, and dreams.

Portfolio review. Analyzing your tax return for items such as investment income and capital gains can lead to a broader review of your portfolio and your overall goals and objectives. For example, are there any investments that are tax inefficient and which could be upgraded within your portfolio?

Withholding. If you received a larger than expected refund, it may be advisable to adjust your withholding to create additional disposable income or investable income over the course of the year. If you owed more in taxes at the end of the year than you expected, it may be advisable to adjust your withholding to avoid potential interest for underpayment of taxes.

There are several other important areas of focus that should be addressed in a mid-year financial check-up, including:

1) Review your investments quarterly to be sure that your portfolio is aligned with your risk profile. Quarterly portfolio re-balancing forces investors to buy low and sell high and also prevents investors from straying too far in either direction from their goals and objectives. The market has recently doubled from the lows set in March 2009, presenting a great opportunity for investors to re-balance their portfolios if necessary.

2) Review your progress toward your financial goals, such as saving for a house, tuition or retirement. Are you on target to meet your goals? What obstacles are preventing you from succeeding? What might need to change in order for you to be successful?

3) Review important financial documents, such as wills or life insurance policies, annually. Significant life events, such as marriage or the birth of a child, may necessitate a change to your financial plan.

4) Review your credit history for incidences of fraud and for ways to improve your credit score. Free annual credit reports are available at www.annualcreditreport.com.

Schedule your mid-year financial check-up on your calendar just as you would any other important meeting, such as your annual physical.

Joseph Jennings, CFA, Investment Director, PNC Wealth Management has 14 years of wealth management experience and received his MBA in Finance from Loyola University. He is a Chartered Financial Analyst (CFA) charterholder and member of both the CFA Institute and the Baltimore CFA Society. He can be reached at joseph.jennings@pnc.com.

The hidden 17% tax: Your cell phone bill

— Your wireless carrier isn’t the only one pocketing money when you pay your cell phone bill.

Local, state and federal governments, 911 systems and even school districts tack on taxes and surcharges to your wireless bill that end up costing American cell phone customers an extra 17.2%, on average, according to the Tax Foundation. That’s up from 16.3% fifteen months ago.

For consumers accustomed to single-digit sales taxes, these double-digit fees can appear unusually burdensome. But unlike sales, income or property taxes, wireless taxes remain largely hidden — tacked on to the end of your monthly wireless bill and often ignored.

They shouldn’t be. A $60 cell phone bill actually costs the average customer $70.32.

In Nebraska, which has the country’s highest wireless tax rate, customers would pay $74.69 each month for a $60 cell phone bill. That’s $10 per month more than customers in Oregon would spend for the same services. Oregon has the nation’s lowest wireless tax rate.

“The problem with taxes on wireless is so many different jurisdictions impose taxes and fees,” said Scott Drenkard, an economist with the Tax Foundation.

A wireless customer who lives in New York, for instance, could have up to 12 different taxes and surcharges show up on his or her wireless bill.

High wireless taxes date back to the “Ma Bell” days of AT&T, when few Americans had cell phones and various governments saw wireless surcharges as a way to support expensive services, such as rural telephone infrastructure build-outs. Every American today pays 5.82% of their cell phone bill to the federal Universal Service Fund, which originally paid for those rural phone services.

Some opponents to the current wireless tax structure argue that states, cities and other districts see cell phone bills as an undercover way to dodge the political fallout of raising other taxes.

“Wireless taxes have long been a fairly frictionless way for states and cities to get revenue,” said Jot Carpenter, vice president of government affairs at telecom industry association CTIA. “It used to be a tax on the wealthy, but now that most people have cell phones, it’s hard to say it’s just targeting the rich now.”

Even living in a state with no sales tax doesn’t save you from having to pay high taxes on your cell phone bill. Sales-tax-free Alaska has a higher-than-average 17.9% tax rate on wireless services, thanks in large part to its hefty 6%, state-imposed Universal Service Fund tax to support rural telephone services.

People in a high-tax state bordering a state with low fees can’t escape by buying a phone across the border. The Mobile Telecommunications Sourcing Act of 2002 demands that taxes be levied at the address that the cell phone company determines to be a customer’s “place of primary use.” So if you live in Washington — the state with the nation’s second-highest wireless tax rate — it doesn’t necessarily pay to buy your next phone in Oregon, which has the lowest rate in the country.

Relief probably isn’t coming any time soon, but wireless taxes may soon stop spiking. Two versions of a “Wireless Tax Fairness Act” that are floating around Congress have garnered bipartisan support. Though the act wouldn’t lower taxes, it would place a moratorium on raising them.

“What needs to happen is an overhaul of this poorly thought-out tax policy,” Carpenter said. “But before you can fix it, you have to stop digging the hole.”

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Tips for running your home on a budget

— Whether you are living paycheck to paycheck or have cash to spare at the end of the month, it’s wise to trim unnecessary costs. By spending less on the things you need, you’ll have more for the things your family wants. 

Do a quick assessment of the way you run your home and you may find some smart ways to save. From your laundry to your kitchen, Sun Products, the makers of Sun and Surf detergent is offering a few helpful ways to get started:

Thrifty Kitchen

In the United States, up to 40 percent of food goes uneaten, according to the Natural Resources Defense Council.

Instead of throwing good food gone bad in the garbage, plan your meals for the week in advance. To purchase only what you need, make a list before you go to the grocery store and stick to it. This is also a good way to prevent making expensive impulse purchases.

If your home’s storage spaces allow for it, consider buying non-perishable staples in bulk. You can get certain items at a deep discount this way.

Pare down your kitchen expenses even further by switching from disposable to reusable items. For example, ditch the paper towels and napkins and buy a few sets of dishcloths and cloth napkins instead. It may result in a little bit of extra laundry, but it’s well worth it.

Laundry for Less

When shopping, read labels and stick to clothes that you can wash at home. By avoiding the dry cleaner and doing laundry at home, you’ll reduce your cleaning costs significantly.

You also don’t always need hot water to get your clothes clean. Instead, wash your clothes in cold water at a fraction of the cost.

Be sure to use a high-quality multi-tasking detergent known for long lasting freshness. For example, Sun Products makes a variety of detergents such as Surf and Sun.

Surf detergent, which attacks tough odors for fresher, cleaner clothes, is an affordable detergent that won About.com’s 2013 Readers’ Choice Award for best-smelling laundry detergent and was named Product of the Year’s best liquid laundry detergent in 2013 (Survey of 50,180 consumers conducted by TNS).

Sun detergent, on the other hand, has a Triple Clean formula, which cleans, fights stains, and freshens. If you have sensitive skin, you can try Sun Free & Clear, a hypoallergenic detergent, which is free of dyes and perfumes, at a great value. 

Energy Economy

Lights on and nobody home? Make a household habit of turning lights off and unplugging unused appliances and electronics when you exit a room. Also, consider swapping out your older appliances for newer models that are ENERGY STAR rated. Get more bang for your electric bill buck by improving the insulation of your home. You’ll make the most of your climate control by caulking around doors and windows and sealing up cracks and wall cavities.

In the months ahead, the amount you save on utility bills will go well beyond offsetting the upfront costs.

Eight states raise their gas tax

— Eight states increased their gas tax this week, according to a report from the Institute on Taxation and Economic Policy.

The largest boost was in Wyoming, which raised its gas tax by 10 cents a gallon, followed by Connecticut, California, Maryland, Kentucky, Nebraska, Georgia and North Carolina.

The increases went in to effect on July first.

“It’s a marginal increase,” said Ken Orski, publisher of the infrastructure industry publication Innovation NewsBriefs.

Meanwhile gas taxes in Virginia and Vermont went down.

“Some drivers in Maryland may fill up in Virginia as its gas tax went down. For other states, I don’t think the increase is noticeable,” Orski said.

Unlike state gas taxes, which have been fluctuating, the federal gas tax has remained unchanged at 18.4 cents per gallon since 1993, despite a 55% increase in the cost of road building over the last 20 years.

Therefore tax revenue keeps falling short and the federal government has to make massive cuts in infrastructure spending to fill in the gaps, said Carl Davis, senior analyst at The Institute on Taxation and Economic Policy.

State and federal gas taxes are mainly used for road building and other transportation infrastructure projects.

Raising the federal tax is politically unpopular since taxpayers may not see how their federal dollars are put to work. Meanwhile, state taxes are more prone to be raised because they’re more tangible. “[Taxpayers] understand better where the money is going,” Orski said.

Wyoming and Maryland’s legislatures voted to increase their gas tax, while the other states’ gas taxes are set to automatically go up every six to 12 months to keep pace with inflation. Currently 16 states automatically peg their gas tax to inflation.

“The increase is an indication that states have a heavier burden of investing in transportation since they don’t have enough funding from the federal government,” said Emil Frankel, a former transportation expert in the George W. Bush administration and now director of transportation policy at the Bipartisan Policy Center.

Davis said it’s a tough political challenge.

“Gas tax increases pale in comparison to gas price volatility. People are more sensitive to gas price changes,” he said.

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Young Americans are ditching credit cards

— The number of young Americans who are living without credit cards has doubled since the recession, according to new research.

About 16% of consumers ages 18 to 29 didn’t have a single credit card by the end of 2012 — up from 8% in 2007, according to data that credit score provider FICO collected from the credit files of millions of consumers.

As a result, credit card debt has declined by about a third among this age group — from an average $3,073 to $2,087 per person.

After watching older generations — like their parents — get hit hard by the recession, many younger Americans are shying away from credit and opting for debit cards instead, according to FICO.

Prepaid cards have also become attractive alternatives, said John Ulzheimer, president of consumer education at SmartCredit.com.

“[T]here has been very aggressive marketing of prepaid debit cards over the past few years targeting young people and minorities,” he said. “So it’s not a surprise that more young people are using prepaid debit cards over credit cards.”

In addition, the CARD Act, which took effect in 2010 and requires consumers under age 21 to have a co-signer or to earn enough income to make full payments, has also made it harder for this group to qualify for credit cards, FICO found.

Along with credit card debt, overall debt has fallen among this younger group. Even with the surge in student loan debt, this younger group has seen an even more rapid decline in other debts like mortgages. And this shedding of debt has translated into higher credit scores, with the number of consumers 18 to 29 years old with excellent FICO scores of 760 or higher jumping from 8.6% in 2005 to 11.2% last year.

Older Americans are another story, however. While they also lowered their credit card debt, they racked up more auto and mortgage debt.

Consumers 40 and over therefore have more overall debt today than they did in 2005. And as a result, FICO scores have fallen 1.7 percentage points among the 40 to 49 age group, 1.8 percentage points for those ages 50 to 59 and 3.8 percentage points for consumers 60 and older.

“[P]arents are having to take on more debt to help their kids make ends meet,” said Ulzheimer. “And, thanks again to the CARD Act, more parents are being asked to co-sign for their younger non-working children who want a credit card.”

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A borrower’s guide to impressing a mortgage lender

(BPT) – Who doesn’t like to make a good impression? Whether it’s a first date, meeting the future in-laws for the first time or interviewing for a job, making a good first impression can pave the way for some of life’s happiest experiences. That’s especially true for home-buyers, whose ability to secure their dream home depends on first impressing a mortgage lender.

In many areas of the country a seller’s market is emerging, with lower inventory of desirable homes and rising prices, according to the National Association of Realtors. That means increased competition for buyers, and more sellers giving preference to buyers who approach the bargaining table with their finances in order. Real estate experts and finance pros alike agree: It pays to get pre-approved for a mortgage when you’re in the market to buy a home.

Gone are the days of easy approvals, no-money down mortgages and sub-prime borrowing, thanks to the Great Recession. Borrowers today need to show sound financial management skills and good credit in order to secure the best financing deals. If you’re in the market for a mortgage this spring, here are some steps you can take to impress potential lenders:

  • Examine your credit – Your credit status is key to securing a mortgage. The higher your score, the better your chances of securing a mortgage for the amount you need at the terms you want. You should monitor your credit year-round, and take a critical look at things when you know you’re going to be house-shopping. Pay all your bills on time, pay down credit card balances and keep an eye on your ratio of credit available to credit used. Websites like freecreditscore.com can help you understand your credit and make informed financial decisions. You can track your credit score and report over time, and see how your financial behaviors impact your credit.

  • Stay at your current job – Long gone are the days when lenders signed off on mortgages without adequate proof of employment and income. Any mortgage company you apply to will want to see that you have a reliable work history and income. If you know you’ll be buying a house this year, now is not the time to switch jobs. If you know you’ll need to change jobs in 2013, consider putting off a house purchase, especially if you may need to relocate for a new job.

  • Cap other spending – Excessive spending in the months leading up to your mortgage application may make a lender question your ability to manage debt. When you know you will be applying for a home loan, reduce other spending. Avoid large credit purchases if possible. If you must use credit for a purchase, consider how it will impact your credit. Freecreditscore.com has a patented Score Planner that lets anyone visiting the website see how their financial behaviors can affect their credit score.

  • Save up a substantial down payment – It’s harder than ever to get a no-money-down mortgage. Many lenders have stopped offering them at all. To maximize your chances of getting a good mortgage deal, you’ll need about 20 percent of the purchase price for a cash down payment. Beyond helping you secure financing, there are other very good reasons to save for a down payment. First, it will help you get into the habit of saving for a goal. And, when you do buy a house, the down payment helps ensure you have instant equity – and ultimately reduces your monthly payment.

Securing financing before you go home shopping can help you make the most of your opportunities, and helps you move quickly when you find a house you want. By taking a few steps to impress potential lenders, you can make your mortgage application process a successful one – and secure the keys to your dream home.

Five questions to ask before hiring a real estate agent

(BPT) – Want to sell your property quickly? Looking for your dream house? Are you hoping to get the best deal possible during the complex process of buying or selling a home? With so much money – and often, emotion – at stake, going it alone is generally not the best way to reach your goals. The secret for getting exactly what you want: Work with a savvy real estate agent.

A qualified real estate agent will streamline the process, help you save money and serve as a liaison with your best interests in mind. But how do you find the right real estate agent? Hundreds or even thousands of real estate professionals may work in your area, but finding the best one for your unique situation doesn’t have to be time-consuming.

Remember, you’re hiring this individual for his or her expertise and services. Your agent will get a designated percentage of the sale of the house. Depending on negotiations, this cost may be covered by the seller, buyer or split by both. You want someone who will work hard for you, but also someone you are comfortable with because you may be spending a lot of time together.

To find the best real estate agent for you, ask these five critical questions:

  1. How many buyers or sellers have you helped in the last year in the area?

An active agent is more likely to be up-to-date on the market, and local and state laws. Furthermore, active agents with experience in your neighborhood, or the neighborhood where you’d like to move, are better positioned to help you because they can provide unique insight that other less-knowledgeable agents cannot.

  1. Do you have advanced training?

Any licensed real estate agent can help you buy or sell a home. But an agent who has advanced specialty training is better qualified to assist you. For example, an agent who is an Accredited Buyer’s Representative (ABR), has enhanced training focusing specifically on buyers. An agent who is a Certified Distressed Property Expert (CDPE) has special training to deal with short sales and foreclosures. RE/MAX agents on average have more certifications and extra training to better serve buyers and sellers.

  1. What services do you offer?

While the majority of people shop for homes online first, having someone on your side through the search and sale process can save time and money. A buyer’s agent should help you schedule showings, assist with negotiating the price of the new home, guide you through the paperwork, be there at the closing table, and provide insight through any contingencies during the process.

For sellers, an agent should help set the price of the home, based on a competitive market analysis (CMA). Ask the agent how he or she will market your home (websites, videos, direct mail). Also inquire about assistance with staging and hosting open houses. Then, when the offers come in, the agent can help you with the decision on which one to accept.

  1. Who else will be working with me?

The person you hire should do most of the work, but you may work with a support team, too. Additional team members may include mortgage brokers, home inspectors or contractors. If you’d like more information about what it’s like to work with an agent, don’t be shy about asking for references. You’ll get real insight into what it’s like to work with that particular professional.

  1. How often will I hear from you?

No matter if you’re selling or buying, ask how often you’ll hear from the agent and make sure that this aligns with your expectations. For buyers: Do you just want to hear when there’s a new home that may interest you? Do you want regular check-in calls too? For sellers: Do you want to hear from your agent only after a buyer has toured your home, or do you want to be kept in the loop on a weekly basis?

Since we’re talking about it; have you had your financial check-up?

In beauty salons and barber shops across the nation, at summer barbecues and holiday dinners, African Americans have a long tradition of indulging in rich conversation. So much so that we’ve created our very own cultural vernacular, or way of speaking. No matter the venue, when we come together we are ready to talk about it all, from current events and politics to music and relationships. Nothing is off limits…well, almost.

Our conversations often turn to silence when it comes to personal finances.The subject of money has traditionally been a very private matter within our culture, most likely because of our strong sense of self-reliance and pride. Whatever the reason, it’s time to get comfortable and candid when talking about money matters.So here we go…

I’ll start with my mother. Never a banker, my mom (like many mothers in our community) had a way of managing household finances that made it look relatively simple, at least to my brother and me. She didn’t involve us in the day-to-day of household budgeting, so I never knew exactly how she was able to manage it all. What I do remember is that bills were always paid on time, period. When my mother reflects today, she shares that there were times when she needed to “rob Peter to pay Paul.” However, she never failed to write down all of her bills (a practice she’s continued since retirement) and manage her budget to make sure that everything was paid in full.

One reason she succeeded is that she was diligent about reviewing her list, regularly assessing exactly where we were with our family budget.There were specific objectives for stretching the family’s funds, including, setting aside money for college, Christmas, tithing, vacations and savings. I’m always impressed when I think about her generation, and those before her, and how they somehow seemed to have acquired so much with so much less than we have today. They attained what they did largely because they had a strategy that they were committed to –and this was long before on-line banking. They believed in controlling their money rather than it controlling them.

I’ve kept this example top-of-mind as I matured.Today, I am very up front with my children when it comes to financial planning and management. We talk about it. My boys understand the concept of managing money and realize that they have to save (savings account), before discretionary spending (pulling money from the piggy bank for a Wii cartridge). Despite today’s challenging economy, things really haven’t changed much when it comes to the basic fundamentals for achieving economic independence.

The same way our parents managed every dime with purpose, we should model that behavior.

Mastering your finances starts with organization and goals.Whether you are thinking about purchasing a home or an investment property, saving for college, building wealth, or simply going on a vacation, you have to start with a plan. To begin, clearly lay out what money you have coming in, and what you have going out. A simple technique I’ve used is writing down every dollar you spend for a month. That helps you see where the money is going so you can prioritize and, perhaps, make adjustments. For me, that was limiting that daily trip to the coffee shop for a chai tea latte to once or twice a week (saving myself $50 each month) – and I didn’t wait for Lent to make that change. Once you have this insight, create an itemized budget.

Next, be deliberate about thoroughly combing through your expenses and transactions, and regularly reconciling your budget. If you find that you have more disposable income than projected, resist the temptation to reward yourself. Instead, consider applying more funds toward paying down debt, or to your savings or 401(k) plan.

And finally, enrich yourself. Study. Take advantage of resources designed to help you to become savvier about things like budgeting, saving, investing and building wealth for life after retirement. Wells Fargo offers a variety of free, online tools that can help you along your journey toward financial success. Visit www.wellsfargo.com/aspirations for more information.

Most of all: Don’t be afraid to talk about financial matters…because we all know that “money talks!”

Michelle Thornhill is senior vice

president, Diverse Segments for Wells Fargo & Company.

Visit www.wellsfargo.com/aspirations for more information.