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<v Speaker 1>Joining us right now is host of KFIS How to

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<v Speaker 1>Money every Sunday at noon, and a guy I listened to.

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<v Speaker 2>While I am prepping my Sunday afternoon.

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<v Speaker 1>Program, Joel Larscar. Joel, always an honor to talk to

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<v Speaker 1>my man. Thank you so much for glad, glad to

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<v Speaker 1>be with you. Christ Yeah, man, thanks for carving time out.

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<v Speaker 1>I appreciate that. Uh.

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<v Speaker 2>Can we talk about the big story first?

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<v Speaker 1>As we talk about our finances and how we're saving money,

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<v Speaker 1>these auto tariffs are going to have, I say, a

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<v Speaker 1>ripple effect that's going to hit not just the new

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<v Speaker 1>car market, but also the the pre owned inventory is

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<v Speaker 1>going to see a bumping price as well as demand

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<v Speaker 1>for pre owned goes up. I think more people are

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<v Speaker 1>going to hang onto their vehicles, which means fewer h

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<v Speaker 1>fewer cars entering the pre owned market.

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<v Speaker 2>So I think that's gonna happen.

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<v Speaker 1>And some people are I think taking they're taking the

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<v Speaker 1>wrong tact and they're thinking, oh, I better buy a

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<v Speaker 1>car now before the price goes up.

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<v Speaker 2>Yeah.

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<v Speaker 3>No, you're you're spot on, and you're you're really what

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<v Speaker 3>you're you're you're getting at here is the cascading impacts,

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<v Speaker 3>like the second or effects of these tariffs. And so yeah,

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<v Speaker 3>it's really easy to spot the first order impact, which

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<v Speaker 3>is cars that get imported into the United States are

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<v Speaker 3>going to be more expensive, in particular new cars, right,

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<v Speaker 3>and so some models built one hundred percent in the

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<v Speaker 3>United States, like Tesla's, we likely won't see any meaningful

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<v Speaker 3>price increase, although once other cars start to go up

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<v Speaker 3>in price, Tesla might say, hey, we can raise our

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<v Speaker 3>prices too and garner a little more profit from this deal.

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<v Speaker 3>But yeah, you're right, the second order effects of these

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<v Speaker 3>tariffs are going to mean the cars across the board

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<v Speaker 3>go up in price, and car parts in all likelihood

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<v Speaker 3>will too.

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<v Speaker 2>So I think it's really it's really.

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<v Speaker 3>Important for people to not say, oh, these tariffs are

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<v Speaker 3>coming in April. Third, I should buy a car by

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<v Speaker 3>by the end of the month, a brand new car,

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<v Speaker 3>spend tons of money, so I can save a few

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<v Speaker 3>thousand bucks because yeah, estimates are some of these models

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<v Speaker 3>are going to cost five, six, seven thousand dollars more

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<v Speaker 3>once the tariffs are in place. But the other question, too, Chris,

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<v Speaker 3>as always, is will these terraffs actually be implemented or

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<v Speaker 3>is this more talk? And that's just another thing that

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<v Speaker 3>consumers have to grapple with.

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<v Speaker 2>Well, that is a really great point too. Is this

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<v Speaker 2>all the negotiating factor that's going to go away here

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<v Speaker 2>soon or not? Are we?

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<v Speaker 1>I would It would stand a reason then if parts

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<v Speaker 1>are going up, that the price of service on our

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<v Speaker 1>vehicles is going to increase too. If you've got the

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<v Speaker 1>you know, a broken actuating blinker, I don't know, then

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<v Speaker 1>then you may see that that price jump up a

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<v Speaker 1>little bit more too when you take it in to

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<v Speaker 1>have your car repaired.

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<v Speaker 3>Yeah, And it's interesting the length of car ownership has

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<v Speaker 3>been growing in this country, which is something I like

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<v Speaker 3>to see. Like, I'm all about owning and maintaining older vehicles,

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<v Speaker 3>but I think when people you have to go in

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<v Speaker 3>and see the mechanic and there are repairs that they

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<v Speaker 3>have to do to their two thousand and nine Honda

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<v Speaker 3>or something like that, and they see like I was

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<v Speaker 3>literally just talking to a friend last night and he's like,

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<v Speaker 3>I got to get this my old Suparu running, And

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<v Speaker 3>I was like, what's it gonna cost?

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<v Speaker 2>Like eight hundred bucks? He's like, no, like fifteen hundred bucks.

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<v Speaker 3>And there's this there's this connect between what we think

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<v Speaker 3>it should cost and what inflation's actually done to the

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<v Speaker 3>real cost of repairing those cars. But I will say,

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<v Speaker 3>when you think about paying that fifteen hundred bucks, it's

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<v Speaker 3>emotionally difficult and it's financially difficult. But what's more financially

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<v Speaker 3>difficult for most Americans is signing up for buying a

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<v Speaker 3>new car. Signing up for that car payment that on

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<v Speaker 3>average is now in the seven hundred and fifty dollars range.

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<v Speaker 3>And even to get a payment that low. Lots of folks,

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<v Speaker 3>you're talking about at least a six year long car loan.

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<v Speaker 3>So that's Hey, that's two months of a car payment.

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<v Speaker 3>When you think about it like that, I might want

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<v Speaker 3>to keep the car that I've currently got on the road.

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<v Speaker 3>Plus it's saving me money in other ways.

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<v Speaker 2>I agree.

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<v Speaker 1>Joel Larsgard, a host of KFI is How to Money

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<v Speaker 1>every Sunday at noon on KFI. So, Joel, when the

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<v Speaker 1>price of a new car goes up, and then subsequently

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<v Speaker 1>the price of the ustar all the things that we

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<v Speaker 1>just talked about, does that mean that the insurance companies

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<v Speaker 1>are going to start charging us more too, because they

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<v Speaker 1>obviously they've got more they'd have to cover.

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<v Speaker 3>Oh, I mean for sure, yeah, when the price when

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<v Speaker 3>the value of the car is higher, and then your

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<v Speaker 3>car is damaged and the cost to repair that car.

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<v Speaker 3>We've already seen it, even aside from tariffs, we've seen

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<v Speaker 3>it with electric vehicles, and just when an electric vehicle

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<v Speaker 3>is in an accident, let's say, the battery pack has

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<v Speaker 3>to be replaced, we're seeing insurance rates on electric vehicles

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<v Speaker 3>go up across the board because as the cost to

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<v Speaker 3>repair that versus the cost to repair a traditional gas vehicle,

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<v Speaker 3>where you know, the main engine, let's say, isn't typically

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<v Speaker 3>impacted unless it's a really severe accident, but the engine

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<v Speaker 3>of the EV is, so you're going to have to

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<v Speaker 3>replace that battery, which is incredibly expensive. And then talking

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<v Speaker 3>about car insurance, man, there's these fascinating stories coming out

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<v Speaker 3>about vandalism to Tesla's, not just dealerships, but to people,

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<v Speaker 3>individual owners of Tesla's, And there are a lot of

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<v Speaker 3>predictions right now that we're going to see specifically Tesla

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<v Speaker 3>owners targeted with insurance price hikes. Shouldn't even use the

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<v Speaker 3>or targeted, because it's not like it's a nefarious thing

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<v Speaker 3>trying to harm anybody who owns a Tesla. It's really

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<v Speaker 3>just about. Hey, there's greater risk now because of some

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<v Speaker 3>of the political violence happening towards against Tesla owners. Even

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<v Speaker 3>people who like own Teslas, who say I don't really

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<v Speaker 3>like what Elon Muskin is doing, they still might be

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<v Speaker 3>at risk of having their car keyed or something like that,

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<v Speaker 3>which could lead to an insurance claim. So yeah, I

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<v Speaker 3>think the insurance companies it makes sense they might be

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<v Speaker 3>raising those insurance rates on Tesla owners.

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<v Speaker 1>Well, that sounds like no fun in other words, right

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<v Speaker 1>telling me is everything's going to get more expensive?

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<v Speaker 3>Yeah, you kind of didn't sign up for that. And

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<v Speaker 3>I think, actually, interestingly enough, I think a lot of

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<v Speaker 3>Trump voters didn't think they were signing up for this,

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<v Speaker 3>and so it's going to be interesting again to see

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<v Speaker 3>whether the tariffs come about or not. When you kind

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<v Speaker 3>of look at the overall trends where consumer confidences and

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<v Speaker 3>stuff like that, a lot of people are saying, oh,

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<v Speaker 3>this isn't shaking out quite like I thought it was

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<v Speaker 3>going to. And I thought I was voting for lower prices.

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<v Speaker 3>I thought I was voting, you know, to see a

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<v Speaker 3>president who is going to like boost the economy, and

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<v Speaker 3>tariffs have the opposite effect. I mean, this is just

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<v Speaker 3>a widely known economic reality that tariffs create higher prices

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<v Speaker 3>for consumers. And I think there are maybe occasionally reasons

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<v Speaker 3>geopolitically to impose a tariff.

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<v Speaker 2>I'm not a political expert, but when you when you look.

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<v Speaker 3>At like what comes down the pike and what's heading

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<v Speaker 3>down the pike, what's what's coming our way? As you know,

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<v Speaker 3>people who buy stuff in the United States of America,

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<v Speaker 3>it's going to be it's going to be higher prices,

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<v Speaker 3>and specifically on vehicles, and then there there are other

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<v Speaker 3>cascading effects to those tariffs too.

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<v Speaker 1>So yeah, Joel, why is it then that if it's

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<v Speaker 1>widely accepted as a fact that tariffs drive up the

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<v Speaker 1>cost of goods, why why is the White House so

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<v Speaker 1>adamant that no, it's gonna have the opposite effect, It's.

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<v Speaker 2>Going to be really great and everything is going to

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<v Speaker 2>be better for us.

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<v Speaker 1>It just feels like that flies in the face of

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<v Speaker 1>what ninety five percent of experts say.

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<v Speaker 3>Yeah, and then that's a that's a really good question.

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<v Speaker 3>I don't know why they.

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<v Speaker 2>Think there really.

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<v Speaker 3>I think I think what the belief is is is that, hey,

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<v Speaker 3>if we make it more expensive to buy these cars,

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<v Speaker 3>that are made that are made in other countries. Then

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<v Speaker 3>what's gonna happen is the US car industry is gonna boom,

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<v Speaker 3>and we're gonna build more stuff here in the United

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<v Speaker 3>States of America. And so it's kind of this belief

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<v Speaker 3>that we are losers in terms of global trade. And

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<v Speaker 3>then if we institute more tariffs, what's gonna happen is

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<v Speaker 3>it's gonna We're gonna see job boom. We're going to

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<v Speaker 3>see more factories open in the United States, We're going

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<v Speaker 3>to produce more goods and services here in the country.

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<v Speaker 3>And I think they might be right to a certain

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<v Speaker 3>extent on the fringes, but I think the overall approach

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<v Speaker 3>is completely incorrect and that we overall as Americas. We

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<v Speaker 3>think about avocados from Mexico, Hey, guess what if we

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<v Speaker 3>if we right, if we teariff the mess out of

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<v Speaker 3>those avocados, it doesn't mean like the abundance of avocados

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<v Speaker 3>that we currently have in this country.

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<v Speaker 2>It's just it's gonna vanish like or we're gonna pay

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<v Speaker 2>a lot more for them.

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<v Speaker 3>And and yeah, maybe some US producers are able to

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<v Speaker 3>see they're able to see greater profits, and maybe compete

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<v Speaker 3>with those Mexican producers. But overall it's it's a lose

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<v Speaker 3>lose for consumers, and it's going to raise prices, all right.

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<v Speaker 2>Joel Larsgard, who loves his Mexico Joel.

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<v Speaker 1>I happen to see that Congress is looking at capping

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<v Speaker 1>the amount of interest that credit cards can charge me.

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<v Speaker 1>And I believe there is already a cap, but it's

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<v Speaker 1>it's something like thirty percent or somebody of that sort.

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<v Speaker 1>But now there's proposals to cap credit card aprs at

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<v Speaker 1>something like ten percent, which as a consumer, that sounds

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<v Speaker 1>pretty good to me, but not everybody's on board.

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<v Speaker 2>Well, it's interesting. It's kind of bipartisan.

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<v Speaker 3>There there are people from both sides of the aisle

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<v Speaker 3>that have proposed different caps on credit cards what they're

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<v Speaker 3>able to charge consumers, Republicans and Democrats alike. And so

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<v Speaker 3>this is one of those things where there's kind of

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<v Speaker 3>a meeting of the minds and they're saying and it's interesting.

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<v Speaker 3>There have been proposals over the years to say, oh,

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<v Speaker 3>it's app credit card interestrates at eighteen percent.

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<v Speaker 2>Actually, let's make it fifteen percent.

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<v Speaker 3>And so these different bills have been floated and the

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<v Speaker 3>latest kind of mind meld here is to say, let's

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<v Speaker 3>cap credit card interest rates at ten percent. And it's

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<v Speaker 3>funny that people in Washington tend to agree on this

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<v Speaker 3>because I disagree wholeheartedly with this attempt, because it sounds

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<v Speaker 3>so nice and it sounds so empathetic to say, hey,

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<v Speaker 3>we know you've got credit card debt.

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<v Speaker 2>It's a big pain.

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<v Speaker 3>And credit card interest rates, as everyone knows, have gone

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<v Speaker 3>up significantly. We're talking about average credit card interest rates

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<v Speaker 3>nearing twenty two percent now for people. And if you've

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<v Speaker 3>got significant credit card debt, that's one of those I mean,

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<v Speaker 3>it could take you decades if you're paying the minimum

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<v Speaker 3>every single month to pay that credit card off.

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<v Speaker 2>And so I sympathize with that.

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<v Speaker 3>But the problem is if you institute a ten percent

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<v Speaker 3>rate cap, I think there are significantly worse things coming

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<v Speaker 3>down the pike, like there is no free lunch, and

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<v Speaker 3>why not five.

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<v Speaker 2>Percent if we're going to do ten percent.

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<v Speaker 3>When you start messing with what credit card companies are

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<v Speaker 3>able to charge people in terms of interest rate, you

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<v Speaker 3>might actually let some subprime borrowers. And in fact, CNBC

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<v Speaker 3>said something like ninety five percent of subprime borrows wouldn't

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<v Speaker 3>have access to credit cards anymore.

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<v Speaker 2>So's they're basically.

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<v Speaker 3>Barring a huge segment of the population, for me being

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<v Speaker 3>using credit cards at all. If something like this goes through,

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<v Speaker 3>and they might have to turn to even more nefarious

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<v Speaker 3>kinds of debt. Talk about second order effects of something

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<v Speaker 3>that sounds good on its surface but underneath could lead

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<v Speaker 3>to even worse.

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<v Speaker 2>Outcomes for a lot of people.

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<v Speaker 1>So you're talking about things like a payday loans or

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<v Speaker 1>something like that that could that's interesting.

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<v Speaker 3>Yeah, I mean, I think a lot of people if

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<v Speaker 3>the credit cards ripped out of their hands, and you know,

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<v Speaker 3>we might say, oh, credit cards, it's not great that

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<v Speaker 3>people pay twenty two percent interest. And that's something I

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<v Speaker 3>talk about regularly on the shows, like, only use credit

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<v Speaker 3>cards if you can pay them off on time and

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<v Speaker 3>in full every single month. And if you, you know,

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<v Speaker 3>use them and you feel like you can't do that

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<v Speaker 3>and you need help. I try to talk about that too,

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<v Speaker 3>where to go to get that help to pay off

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<v Speaker 3>your credit card debt. But I just I don't like

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<v Speaker 3>the potential downstream effects of having some sort of credit

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<v Speaker 3>card rate cap because I just think it's going to

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<v Speaker 3>lead to people turning to more nefarious places to get

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<v Speaker 3>that money that they need.

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<v Speaker 1>Am I mistaken that there are rate camps already though,

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<v Speaker 1>something like thirty percent?

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<v Speaker 2>Don't? I don't believe so.

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<v Speaker 3>I think the only rate caps on credit cards that

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<v Speaker 3>are that are in effect are for military service members.

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<v Speaker 3>So I believe there's like a thirty six percent cap

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<v Speaker 3>interest rate cap for people who served in the armed forces,

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<v Speaker 3>But I don't think there's any interest rate cap for

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<v Speaker 3>credit card companies in general. And you know, the other

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<v Speaker 3>thing too, is there is competition. It might seem kind

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<v Speaker 3>of weird to say, but there is competition in the

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<v Speaker 3>credit card industry. And when you think about going one

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<v Speaker 3>of the things that credit card credit cards from credit

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<v Speaker 3>unions will tend to offer is significantly lower interest rates

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<v Speaker 3>on credit cards or there are you know, ballots transfer

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<v Speaker 3>offers that often allow you to pay zero interest for

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<v Speaker 3>like fifteen or eighteen months, so it's not like you're always,

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<v Speaker 3>let's say, you know, stuck forever it paying twenty one

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<v Speaker 3>percent interest. Those interest rates they also move with what,

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<v Speaker 3>you know, what the FED is doing, what the Fed's

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<v Speaker 3>up to, and just interest rates in general, so you

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<v Speaker 3>might want to I think it's people want to point

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<v Speaker 3>the finger or politicians at least do at the credit

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<v Speaker 3>card companies and make it seem like they're incredibly greedy.

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<v Speaker 3>But a lot of people do really well under the

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<v Speaker 3>credit card system. There are kind of the haves and

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<v Speaker 3>the have nots. Some people earn a lot of rewards

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<v Speaker 3>and they don't ever pay a dime, to be said,

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<v Speaker 3>in MasterCard or the banks that issue those cards, and

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<v Speaker 3>then other people man they lose out because they're not

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<v Speaker 3>handling credit cards well. And so I want to talk

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<v Speaker 3>about credit card hygiene less about changing the way the

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<v Speaker 3>system is constructed, because I don't necessarily think it's out

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<v Speaker 3>to get anybody.

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<v Speaker 1>See this is why we listen to How to Money

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<v Speaker 1>with Joel Laarer's card every Sunday at noon on kfive.

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<v Speaker 1>So what's your take on the consumer confidence reports that

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<v Speaker 1>came out and it says a twelve year low, so

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<v Speaker 1>Americans are increasingly worried about the future of the US economy.

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<v Speaker 3>Yeah, I mean, I think so much depends how you

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<v Speaker 3>view the economy.

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<v Speaker 2>For the most part.

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<v Speaker 3>When you look even at some of the surveys of

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<v Speaker 3>how consumers felt based on their political allegiance, it's amazing

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<v Speaker 3>how it flip flopped the day that the right after

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<v Speaker 3>the election or right after the inauguration. So I think

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<v Speaker 3>sometimes people think about how the economy is doing through

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<v Speaker 3>a really political lens, But then I think everyone right

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<v Speaker 3>now is starting to feel the basically like the reaction

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<v Speaker 3>to their own habits. I think we've gotten used to

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<v Speaker 3>buy now, pay later in this country. It's something I

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<v Speaker 3>rail against. It feels like it's everywhere you can now

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<v Speaker 3>by now, pay later a burger on grub Hub, which is.

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<v Speaker 2>Just utterly ridiculous. So I think it's partly habits.

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<v Speaker 3>And then I think we're also we're kind of reading

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<v Speaker 3>the writing on the wall with and some of the

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<v Speaker 3>economic policy, and I think there's just a general sense

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<v Speaker 3>of malaise in this country right now, even though I

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<v Speaker 3>think there is a lot to be hopeful. That's got

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<v Speaker 3>to be part of it.

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<v Speaker 1>Yeah, did you ever think you'd see a day that

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<v Speaker 1>you could take out a.

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<v Speaker 2>Loan for a burrito? No?

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<v Speaker 3>No, I didn't, And it kind of baffles me. But

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<v Speaker 3>I think that the more we offer products like that,

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<v Speaker 3>like credit cards, started it right and it was like, oh,

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<v Speaker 3>you don't actually have to pay for the thing that

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<v Speaker 3>you want right now, and we've taken that to the

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<v Speaker 3>nth degree and it just sets people up for failure

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<v Speaker 3>and you forget, you know, what you're buying. And like,

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<v Speaker 3>we're paying so little attention to our financial futures because

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<v Speaker 3>it's all about the present. And I just think that

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<v Speaker 3>makes us unhappy. But it also it makes us poor too,

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<v Speaker 3>which leads to more unhappiness.

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<v Speaker 1>Right, Yeah, we're after that, Yeah, chasing that short term gratification. Joel.

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<v Speaker 2>Love listening to you, man. Thank you so much for

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<v Speaker 2>your insight and your wisdom on these things. Thank you,

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<v Speaker 2>mich Yeah, thanks for Chris, appreciate it. Yeah, of course. Yeah.

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<v Speaker 1>Joel Larsgard, host of kfis How to Money every Sunday

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<v Speaker 1>at noon. Find him and follow him on the socials

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<v Speaker 1>at How to Money Joel at How to Money Joel