There has been a ton of confusion about whether money received through the Cash for Clunkers program is taxable.  What follows is my opinion of both the cause of the confusion and the reality of the situation.  Much of the confusion is based on a news article quoting Minnehaha County (South Dakota) Treasurer Pam Nelson.  In the article Some Surprised by ‘Clunker’ Tax, she is quoted as saying (regarding CARS participants)   “They didn’t realize that would be taxable. A lot of people don’t realize that. So they’re not happy and kind of surprised when they find that out”

When people started hearing that the Cash for Clunkers credit was taxable, they may have falsely concluded that it was subject to federal income tax.  This does not seem to be the case.  The official CARS website specifically states that the credit is not taxed as income to the consumers that participate in the program.  So you will not have to pay federal income tax on the credit as you might for a forgiven or canceled debt.

That is not to say that the Cash for Clunkers’ credit is free from tax.  In many states

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The Cash for Clunkers law is intended to jump start the auto industry by inspiring people to purchase new cars.  Touted secondary benefits include aiding consumers in new car purchases and various environmental benefits.  The program offers vouchers towards the purchase of a new car when an older, lower MPG car is traded-in.  The restrictions of the law make the program much less effective than it could have been and most consumers may be better off skipping the program entirely.

The voucher you receive would start at $3,500.  Your passenger car clunker must be at least 8 years old and have fuel efficiency at least 4 MPG worse than the new car.  If it’s 10 MPG worse, then you could get the larger voucher, worth $4,500.

If your car is at least 8 years old, congratulations.  Owning vehicles for a long time is a favorite technique of the frugally minded.  Driving a more fuel-efficient car sounds like a money savings potential as well.  So what’s the problem with the Cash for Clunkers program?

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We’ve probably all be inundated with calls to our cell phones with prerecorded messages that our car warranty is expiring.  I covered this, and similar topics, in a recent post on the Lending Club blog: Cell Phone Telemarketing Scams.  Today, the Federal Trade Commision announced that it had filed suit to stop these illegal robocalls.

Highlights from the FTC press release:

The Federal Trade Commission is asking a federal court to shut down a telemarketing campaign that has been bombarding U.S. consumers with hundreds of millions of allegedly deceptive “robocalls” in an effort to sell them vehicle service contracts under the guise that they are extensions of original vehicle warranties.

In two related complaints filed in federal court, the Commission took action against both the promoter of the phony extended auto warranties, as well as the telemarketing company that it hired to carry out its illegal, deceptive campaign. In its complaints, the agency contends that the companies are operating a massive telemarketing scheme that uses random, pre-recorded phone calls to deceive consumers into thinking that their

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More on this topic (What's this?)

Nice Pop - Confidence Up? (Market Rubbernecker, 4/28/09)

Cell phone detects bad breath (Canadian Business Blog, 4/1/09)

Read more on Cell Phone Manufacturers at Wikinvest

Consumer Reports, the product testing magazine from Consumers Union is famous for separating the great products and services from the lousy ones.  They are decidedly pro-consumer and so I created a little experiment to put their own customer service to the test.

Last year I received an offer in the mail from Consumer Reports.  It was basically a flyer with some tips from past issues and a “no-obligation free trial” of the magazine.  According to the offer, I would receive a sample issue of the magazine plus two free books, How to Clean Practically Anything and the 2009 Buying Guide.

The offer said that my free books were truly FREE and that

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This post is part of the latest Carnival of Personal Finance. Be sure to check out the other great entries as well.

Tough economic times, coupled with soaring gold prices, has led to a growing number of ways to sell gold.  Two particularly terrible ways to sell both share a common trait: convenience and a lack of comparison pricing.

The first, is online gold buyers like Cash4Gold.com, which had

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The lagging housing market makes competition for house listings intense.  Many realtors offer incentives to entice prospective sellers to choose them.  One of the most common marketing techniques is a guarantee to sell your home in 90 days, or less.  There are certainly many reputable realtors out there, but analyzing the home sale guarantee often leaves you questioning the realtor’s motives.  There are a number of ways these guarantees are structured, so let’s examine two common ones:

Sold in 90 Days or I Will Buy Your House

This one sounds great.  If the realtor is unable to sell your home, they will buy it from you.  You probably figure the realtor is motivated to sell your home since they’ll get “stuck” buying it otherwise.  The reality is that most of these guarantees stipulate a purchase price of below market value for your house.  20% is fairly common.  So if the realtor can’t sell, they get to buy at a 20% discount.   But it gets even better for them because of their commission.

Assume your house is listed at

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As reported by The Digerati Life and elsewhere, Experian is terminating their relationship with Fair Isaac that allows consumers to access their Experian FICO score.  Starting tomorrow, Experian will continue to sell your FICO score to the banks and lenders that decide on your credit approvals, but will no longer give you a way to access the information.

So today is your last change to get your Experian FICO score.  You can access that individual score using the FICO Standard product from myFICO.com and choosing your Experian score.

Phishing scams continue to be a popular method for identity thieves to extract valuable information from unsuspecting targets.  In the traditional method, victims receive an official looking email from a bank or service provider requesting account information.  A new scam began today involving Vantage Credit Union and used a text message, rather than emails to solicit a response.  The medium may have changed from email to text, but the goal is the same: gaining access to your sensitive information.

The text message was sent to both members of the St. Louis area Vantage CU as well as non-members.

The message varied, but followed this basic form:

MSG: Vantage CU urgent notification: unusual activity, please verify your account at [www.

Recipients who went to the indicated website (omitted here to prevent anyone from visiting inadvertently)  were actually going to a false site designed to look like the actual Vantage Credit Union site.  The real VCU site, has more information about this incident as well as what to do if you responded to the message.

What today’s incident should remind us all is that unsolicited messages cannot be trusted.  Sure, some banks use text messages to alert their customers and this could have been an legitimate alert.  To be sure, always call your service provider (or visit their website) directly rather than following the link or instructions in an unsolicited message.

There will probably be a huge surge in interest in the Hyundai Assurance Program after its advertisement during the Superbowl.  Here’s an overview of the program and analysis of whether it’s worth considering.

How It’s Advertised:

Buy a new Hyundai and you can return it within a year if you lose your job with no impact on your credit rating.

Program Details from Hyundai:

Eligible Events to Return Your Vehicle

• Involuntary Unemployment
• Physical Disability
• Loss of Driver’s License due to Medical Impairment
• International Employment Transfer
• Self-Employed Personal Bankruptcy
• Accidental Death

Other Terms

• You have to lease or finance the purchase through Hyundai
• The covered event must happen in the first year
• Your loan must be current and at least two payments must be made
• If you have more than $7,500 in negative equity, you pay the difference

Analysis

The first feature of the program that strikes me is that in order to be eligible

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Paying $1.84 for gas today reminded me that I wanted to revisit my analysis of Chrysler’s Let’s Refuel America Program and MyGallons.com.

Back in May, I discussed why Chrysler’s program was such a bad deal.  As a reminder, the program allowed participants to lock in the ultra low price of $2.99 per gallon for three years.  The main reason it was a bad deal was that you had to forgo other dealer incentives to participate, meaning that you might have to give up guaranteed savings to get potential savings.   I wonder how people who participated in the program feel about it now?  Sure, gas may rise above $2.99 before their deal runs out, but I doubt they’re happy with their decision.

Those who wanted to prepay for gasoline for future use without having to buy an overpriced car may have opted to use MyGallons.com.  Those people are likely kicking themselves as well.  Anyone thinking about joining that site (which lets you prepay for Gas, with some restrictions) today, should ask themselves why

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