Save Money...buy a classic car!

What is a 'Classic' car? According to the revenue, its a car that was registered for the first time over thirty years ago.

What are the benefits?
1. Car tax of only €48 per year
2. No Vehicle registration tax (VRT) when you import a classic car
3. No NCT requirements for all cars registered before January 1st 1980
4. Cheap Insurance (there are some restrictions on usage), certain brokers specialise in this sort of insurance.

Irish prices among EU's highest

Written By Olivia Kelly in today's Irish Times:
http://www.irishtimes.com/newspaper/breaking/2011/0913/breaking28.html

Irish consumers are still paying almost 20 per cent more than the European average for goods and services, despite a drop in inflation, according to the latest figures from Central Statistics Office (CSO).
The exchequer deficit remained the highest of any EU member state in 2010 according to the Measuring Ireland’s Progress 2010 report published today.

Consumer prices fell in 2010 but remained high by EU standards. Ireland was the fifth most expensive EU state in 2010, after Denmark, Finland, Luxembourg and Sweden, with prices 18 per cent above the EU average.

The State has remained in recession for the third year in a row with a public balance deficit of 32.4 per cent of GDP, the largest by far of any EU member state. Government debt increased substantially to 96.2 per cent of GDP in 2010, the fourth highest debt/GDP ratio in the EU, having been 25 per cent only three years previously.
Despite this Ireland still had the joint third highest GDP per capita in the EU at 25 per cent above the EU average.

The employment rate at 58.9 per cent was below the EU average and the unemployment rate was the sixth highest in the EU.

The number of homes built in 2010 was 14,600, back to the level it was at in 1970 and down from a peak of almost 90,000 in 2006.

Credit Union Lending Restricted

The Registrar of Credit Unions (the part of the Central Bank that looks after Credit Unions) has imposed harsh new lending restrictions on 7 out of 10 credit unions countrywide.

At a time when credit is not flowing from the banks, the Credit Union network was seen a place where a good savings record meant that one could get a small loan with relative ease and your circumstances would be considered on a personal, local basis, not by a computer in 'Head Office' deciding weather you were a good bet or not. In fact 70,000 new members have joined Credit Unions over the last two years as the public's trust in traditional banks has reached an all time low.

Credit unions have been hit hard over the last few years, they have suffered poor investment returns and a large increase in people falling behind on their loan payments, but ironically enough they are desperate to lend out money at a time when most banks will reject all but the most Gilt Edged application's. Most credit unions have lending of below 50% of the amount that they hold in savings, some banks have lent out 160% of savings. It could be argued that if the banks managed themselves nearly as carefully as most local Credit Unions, we would not find ourselves in the current financial crisis.

They have been restricted in the amount that they can lend in a month, or the amount that can be lent to any individual member. Anecdotally people are unable to go back to College this month as students parents are unable to raise the €2000 registration fee despite impeccable borrowing records.

Unfortunately the only people who are likely to gain out if this are the illegal money lenders with their punitive rates of interest and questionable collection methods.

FS

New 2% Insurance Levy announced

The Minister for Finance published a bill today which will result in higher insurance premiums for all of us, to pay for Quinn Insurance.

A levy of 2% on all non life and non health insurance policies will be introduced before year end. This will affect Car, Home,Professional Indemnity and Travel insurance (any many more beside).

Quinn estimate that they will need to receive €600m from the State run 'Insurance Compensation Fund' to meet their solvency requirements.......the problem is that this fund only currently holds €40m.

The levy is estimated to bring in €65m annually. When you consider that we have already bailed out the banks into the tens of billions, i don't know why a 'paltry' sum like €600m couldn't be found by another method. Ultimately we are all paying for one mans massive gamble on Anglo Irish share's, why not lump it into the debt we have for the banks rather than further hurt people by levying things that we are obliged to purchase.

FS

ECB Keep rates steady

At yesterdays monthly ECB meeting they have decided, unsurprisingly, to keep interest rates steady at 1.5%.

What is making the news however is that it is highly anticipated that we are in for at least two 0.25% reductions over the next six months, starting as early as November, making for a very happy Christmas.

The markets would like the reductions to come quicker than that but it is understood that they will remain unchanged until JC Trichet steps down next month, sparing him the embarrassment of having to make good his epic blunder of two rate rises this year, further damaging Europe's hopes of some form of growth.

FS

Round-Up of the week

This week has seen a lot of talk about mortgages and debt relief, but very little concrete information I'm afraid. The Government and Central bank has ruled out widespread debt write offs.

You might remember back during the election campaign, Fine Gael promised a large increase in the mortgage interest relief for people who bought their first home between 2004 and 2008? Well it seems that that promise was for election purposes only. We are to wait until the end of the month to hear the report of a group of experts who will recommend what steps should be taken to help those in arrears/'the negative equity generation'.

The stories doing the rounds include; Banks taking a equity stake in your home in exchange for a reduction in your mortgage, mortgages being written off and renting your house from the Government and the introduction of intergenerational mortgages.

The Irish Independant have reported that some lending institutions are writing off debts or allowing people to settle debts for less than what is outstanding. This is being denied by the relevant institutions who very understandably want to avoid the potential for individual customers to take advantage of the situation, this is also known as 'Moral Hazard'.

KBC has increased its standard variable mortgage rate by 0.25% to 4.45%.

Bord Gais has got the approval for its 22% increase in Gas prices from the regulator, the ESB reacted by confirming it would do the exact same thing for its customers.

The number out of work increased by 1600 over the last month, a trend we had hoped that arrested itself some time ago.

The Government tax take figures have shown that they are collecting more then they had budgeted for, which is good news. The amount of VAT collected remains below target which just shows the lack of consumer sentiment out there.

FS