Seniors face difficulty in overseas car rental

Dear Bruce: My wife and I are receiving a settlement from an automobile accident. My wife is going to use some of the money to return to school, since the accident has caused her to give up her career due to the physical limitations. Where can we invest the money to give us growth but at the same time have the money available should a need arise? We don’t trust mutual funds, and the stock market, in our opinion, is unstable. – J.B., Redding Pa.

Dear J.B.: Unhappily, this is not the best of times to be having a surplus of money, since it is so very cheap. CD rates can run under 2 percent, and when you take taxes into account, you just barely stay even after inflation, if at all. The best shot, given all of the limitations you have described, would very likely be a money market account, which can be opened at any brokerage company that has no restrictions on withdrawals. You are going to find, however, that the interest that it will pay will be so tiny that it will be difficult to calculate.

Dear Bruce: We are planning a vacation later next month in Europe. When we tried to rent a car we were told that because we were over 70 they would not rent to us. We called a couple of the major U.S. agencies, and they say they have a restriction on older drivers in Europe. We are both very vital and young feeling, do our own driving, have excellent records and are substantial citizens. Is there something you can suggest? – C.D., Nashville, Tenn.

Dear C.D.: It is true that many of our major car rental agencies, for reasons that I’m not quite certain of, are perfectly happy to rent you a car in the United States but not in foreign countries. It may be due to the lack of familiarity with the roads, language, etc. Be that as it may, there are still local rental agencies in Europe that will rent to someone your age. Check with AAA if you are a member, a local travel agent or the Internet. There are several Web sites on the Internet that will allow you to rent up to the age of 75; however, for those ages 25 or younger and for those ages 70 to 75, expect an additional fee to rent a car.

Dear Bruce: We bought two airline tickets to go on a cruise. We were really looking forward to it, but it just isn’t convenient right now. Our grown children are involved with some activities that require some of our attention, and we figure we can just go another time. The cruise line allowed us to cancel without any penalty because it was 70 days before leaving, but the airline is being very unreasonable. It is true that we did buy the cheapest tickets and they say nonrefundable, but isn’t that just something to keep people from canceling without reason? We feel our reasons are important, and we want our money back. The airline says they will give us a credit of the unused portion, but there will be a $100-per-person additional charge. We feel that we are being robbed. Any help you can give us would be appreciated. – T.N., Bangor, Maine

Dear T.N.: What part of nonrefundable don’t you understand? You haven’t said that there was a death or medical emergency, you just decided that your plans had changed. Unfortunately, that is part of the condition that you agreed to when you purchased the tickets. Tickets that are totally refundable are available, however they would have cost two or three times what you paid. You were given a bargain for buying in advance and agreeing to those terms. I am oftentimes impatient with airlines that refuse to acknowledge extenuating circumstances, but candidly, how can a dispassionate observer see anything extenuating in your?

Dear Bruce: My mother-in-law just received her share of her mother’s estate, approximately $19,000. She wants to know if she should hold back for her 2004 income tax. — B.B., Henderson, Nev.

Dear B.B.: Relax. The person who leaves the money, not the heir, pays any tax that is due from an inheritance. This is money that your mother-in-law can put into her sock, take to Las Vegas if she chooses or do whatever she wishes, but taxes are not an issue.

Dear Bruce: I have an 8 percent car loan that will be paid off in four years. I recently refinanced my home at 5 percent for 15 years. I want to get them both paid off as quickly as possible by putting an additional $500 toward the principle each month. When the car is paid off, I want to put the additional money toward the house principle. Is this a wise plan? — A.R., Las Vegas, Nev.

Dear A.R.: You didn’t mention how the car was financed. If it was financed under a plan where you also borrow the interest, the likelihood is that paying it off early is not going to save a whole lot. I’m assuming that this was originally a 60-month transaction. If it is a simple interest loan, that’s another matter. By all means, pay the principle on that loan first since it’s the higher rate and it is not a deductible item you itemize on your taxes. The wisest thing to do is to pay off even numbers of principle with a separate check each month. In other words, include your check for your regular mortgage payment and a second check clearly marked “for reduction of principle.” Consult your mortgage as to any penalties involved in early payoffs.

Bruce Williams is a national radio talk show host and syndicated columnist.

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