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Financial Conversations with Fitz #10 - Save For That Car Purchase - 3/10/2009

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Another great, busy week!!!!   How about those Panthers!!!!!   UNI is going to the big dance.  Looks like we will be the only Iowa  rep……We had Bill Northey visit our bank community room on Friday afternoon as part of his county visit.  We had a nice turn out to ask questions about ceilings on payments, ethanol, wind energy and crops in general for 2009.  It was good to see a group of FFA students from the high school.  Another busy week coming up.   Tomorrow night we have a pesticide meeting in the community room with Extension.   That starts at 7:00.   Wednesday morning we are going to the North Iowa Ag Breakfast in Mason City at 7:00.  It is a gathering of about 400 to 500 ag people for breakfast and listen to a speaker.   This year they have a motivational speaker this year.   I think we will need it.  There is also the North Iowa Research Farm meeting in Britt on Wednesday. 

With all of our activities there is hardly time for a financial topic.  I made several car loans last week and this question came up several times.   Yes, TSB has money to lend out and even for cars!!!!  We have plenty of good local dealers.    How come I have to have a down payment?  Our program and most banks want 10 to 20% down.  A couple of thoughts on that with a $10,000 purchase and loan.  Here is what happens…..The closing cost on a $10K purchase with sales tax, doc fees, and lien fee with licenses will run about $1000.  By the time you have made your first payment there will be about $55 of interest.   The NADA depr on a car is usually around 5%/month.  That means before you make your first payment, you now have a car that is worth NADA $9,500 that you owe $11,055.  So it is important, when you shop for a different car, and it is good that you can, that you purchase one that fits your budget and your savings account.  We can run several different examples before you go to the dealer.  You will know what you can afford for purchase and monthly payments.  That will make you a better buyer.

Remember you need to talk to your crop insurance person before March 15th to be sure you have the acres covered that you want.    Particularly if you have changes in your land base. 

Call or stop in to see us if you have any questions in any of our three offices. 

Remember that you should deal with people in community banks and organizations.  When you work with them, you know that you will also see them sitting with you at ball games, church or community events.  So, if in doubt give us a call.