When shopping for a car, new or used, what factors are important to you?
For most people, price is pretty important. Then, depending on what kind of car you’re looking for, you might consider horsepower, handling, comfort, cargo space, and MPG.
However, there’s another factor that many tend to overlook too often: a car’s long-term reliability.
Whether you plan to keep a car for a year or a decade, it’s my strong belief that reliability should be in the top three factors you consider, alongside safety and price. Because while the cars we know to be reliable may not be as flashy, fun, or even cheap as their less reliable counterparts, their dependability pays out dividends.
Reliable cars are magnitudes cheaper to own, less stressful, and will hold their value longer, collectively saving you tens of thousands over their lifetime.
What’s Ahead:
What exactly is a car’s “reliability”?
![Whether you got a new job and are looking for somewhere to stash your paycheck, or are just looking for a new bank that better meets your needs, you may have spent some time considering where to open up a bank account. While there are many private banking options to choose from, not all of them effectively meet customers’ needs. Many Americans are interested in consumer-friendly banks that are accessible and have low or no fees, while others look for banks that have local roots or more ethical behavior than bigger nationwide banks. Still, other Americans are unbanked, meaning that they don’t have access to any checking or savings accounts with a bank or credit union. Looking for an ethical banking experience? Aspiration rewards socially conscious spenders Representatives Rashida Tlaib and Alexandria Ocasio-Cortez have recently introduced legislation that could provide a promising alternative to traditional banks. The Public Banking Act would establish a grant program that would allow for the formation of state and locally administered banks. While this act wouldn’t establish new public banks in and of itself, it would make it easier for public banks to form and to become insured by the FDIC. These public banks would operate as nonprofits, and wouldn’t charge any monthly maintenance fees or require minimum deposits. That would make them accessible to citizens who find themselves shut out of the current banking system. Since they wouldn’t be as focused on turning a profit as traditional banks, public banks could also provide lower interest rates for small businesses and public infrastructure projects, investing in local communities and cutting out Wall Street middlemen. What is public banking? Public banking would function as a public service, like post offices or fire departments. In fact, in many countries, public banking is often directly tied to the postal system. The United States even had its own postal banking system from 1911 to 1966. Today, there is one public bank operating in the United States, the Bank of North Dakota. Unlike privately owned banks, public banks aren’t beholden to shareholders or required to turn a profit at the expense of ordinary consumers. Instead, these banks are able to charge lower fees and lend money at lower rates to local consumers and businesses. Public banks can receive deposits from local and state governments in the form of tax revenue and other government income, and can also partner with existing local banks to fund a variety of projects. How public banking could affect your finances For many people, banking with a public bank would be pretty similar to banking with a traditional for-profit bank. Some of the potential benefits of public banking could include providing access to banking for more Americans, investing in local and community projects, and effectively delivering relief funds and government payments. Helping unbanked and underbanked Americans As of 2019, approximately 7.1 million American households were unbanked, meaning that no member of the household had a checking or savings account with a bank or credit union. For many Americans, high minimum deposit requirements prevent them from opening an account, while others cite excessive fees and a lack of trust in private financial institutions as reasons why they do not have a bank account. When money is tight, these Americans often rely on alternative services, like payday loans or pawn shops, with high fees and punishing interest rates. Public banks would charge no monthly maintenance fees and have low or no minimum deposit requirements, making them accessible to many Americans who currently fall through the cracks of the private banking system. Public banking would also provide an alternative for Americans who have bank accounts but are currently dissatisfied with their bank or unable to qualify for other financial products. Investing in local communities Because public banks would not be compelled to pursue sky-high profits, they could offer loans at low interest rates to fund local businesses and public infrastructure. These could include projects like affordable housing and renewable energy. Some public banks, like the Bank of North Dakota, also offer low-interest loans to students and other specific groups. Public banks would cut out the middleman and keep funds local, instead of profiting national banks, executives, and shareholders. Effectively distribute relief funds During the pandemic, millions of Americans were eligible for relief funds and stimulus checks to help them weather the turbulent economic times. While some Americans were able to receive funds directly to their bank account through direct deposit, others were mailed paper checks they had to cash, often accompanied by high check-cashing fees. Still, other Americans waited weeks or months for their funds to arrive, during a time when money was tight. Public banks would be one way to easily and effectively distribute funds to Americans, without relying on private institutions. They would expand access for Americans without bank accounts and would prevent predatory services from taking a chunk out of much-needed relief funds. Better for the environment Another way public banks would operate differently than private banks is in their effect on the environment. The Public Banking Act would prohibit public banks from investing in fossil fuel projects, and would instead provide public banks with the capability to issue low-interest loans for environmentally-friendly projects. This puts public banks in stark contrast to private banking behemoths, who have invested over 2.7 trillion dollars in fossil fuels since 2016, according to a report from the Rainforest Action Network. A public alternative to big banks Public banks wouldn’t replace big banks; instead, they’d provide an alternative for consumers dissatisfied with the status quo. This would give Americans the ability to choose between for-profit banks and local, community-driven public banks. In some cases, public banks could even partner with existing local banks to more effectively distribute funds. Public banking wouldn’t solve all of the financial industry’s problems, but it could provide a more ethical alternative to the current options. An important note - While public banks attempt to solve many of the problems of the current banking system, they’re not entirely without flaws. Some potential drawbacks to public banks include potential lack of oversight and insufficient funds, as well as the inherent risk that all banks, public or private, face when it comes to lending money that may not be paid back. Alternatives to public banking For now, public banks still aren’t an option for the vast majority of Americans. However, there are some banking options that beat the competition when it comes to consumer-friendly policies, low fees, and ethical behavior. Credit unions Credit unions share some similarities to public banks in that they aren’t beholden to shareholders and executives, and often have local roots and programs that benefit the community. Like public banks, credit unions are not for profit, but instead of being owned and operated by local or state governments, credit unions are cooperative institutions owned by members. Credit unions also often feature lower fees and rates than for-profit banks. Some federal credit unions even offer Payday Alternative Loans, which allow cash-strapped consumers to borrow money at lower rates than predatory payday loans. Low-fee banks In recent years, consumer-friendly, low-fee banks have proliferated as an alternative to big banks with exorbitant rates and fees. Many of these banks primarily operate as online banks, with simple websites and mobile apps designed to make navigating the banking process easier for consumers. Chime is an example of an online low-fee bank designed with everyday consumers in mind. They feature fee-free overdrafts of up to $100, so you’ll never be charged excessive fees for a poorly-timed withdrawal or accidental overdraft. They also have no minimum balance, monthly maintenance, or foreign transaction fees. CIT Savings Builder is another banking product with plenty of benefits for consumers. This online-only savings account allows customers to grow their savings with an APY of <span class="shortcode" data-alt="[wp_shortcode_62]">1.00%</span>, which is much higher than many other savings accounts. The account does require a $100 minimum deposit and a $100 monthly deposit or a balance of at least $25,000, making it an inaccessible option for some consumers. But for those who want to save money while earning interest, it’s a decent alternative. Ethical banks Many big banks make harmful investments in areas like fossil fuels and for-profit prisons. While these investments are good for a bank’s bottom line, informed consumers may be interested in more ethical alternatives. Banks like Aspiration, Amalgamated Bank, and Beneficial State Bank are B Corp certified, which means that they meet high standards for social and environmental performance, transparency, and accountability. Some banks, like Sunrise Banks and First Green Bank, are members of the Global Alliance for Banking Values, which is a network of banks around the world that are committed to community investments and driving positive change. Still, other banks are designated as Community Development Financial Institutions, or CDFI. These banks are dedicated to providing banking access for low-income and marginalized individuals and communities. Banks like City First Bank of DC, Southern Bancorp, and VCC Bank are all CDFIs. Summary While the Public Banking Act is still only a bill, it represents a promising alternative to traditional banking for millions of Americans. This piece of legislation would also complement other related policy proposals, such as postal banking and the Green New Deal. In the meantime, there are still a variety of banking options with low fees and ethical investment practices for consumers who qualify. Read more: 7 Best Banks Of 2021 - Review And Compare Banking 101---A Guide For Teenagers (And Anyone Who Needs A Refresher - What is a car's "reliability"](https://www.moneyunder30.com/wp-content/uploads/2020/12/shutterstock_704365318.png)
A car’s reliability is easily measured by how many unplanned breakdowns it has.
As long as you keep up with regular service (oil changes, new tires, brakes, etc.) a reliable car will not break down on you. By contrast, an unreliable car will break down on you no matter how well you take care of it.
Since the terms are often used interchangeably, it’s important to distinguish unreliable from expensive to own.
Here are a few examples of what I mean:
- Cars made by Porsche are reliable but expensive to own. A Porsche won’t break down on you if you take care of it, but routine maintenance is crazy expensive. For example, a battery swap costs $50 in your car but $700 in a Cayenne, according to RepairPal.
- Fiats are cheap to own but unreliable. You can buy a Fiat 500 for under $4,000 and change the oil yourself, but no matter how well you baby that thing it’ll break down faster than a reality TV contestant.
Why is a car’s reliability so important?
![Whether you got a new job and are looking for somewhere to stash your paycheck, or are just looking for a new bank that better meets your needs, you may have spent some time considering where to open up a bank account. While there are many private banking options to choose from, not all of them effectively meet customers’ needs. Many Americans are interested in consumer-friendly banks that are accessible and have low or no fees, while others look for banks that have local roots or more ethical behavior than bigger nationwide banks. Still, other Americans are unbanked, meaning that they don’t have access to any checking or savings accounts with a bank or credit union. Looking for an ethical banking experience? Aspiration rewards socially conscious spenders Representatives Rashida Tlaib and Alexandria Ocasio-Cortez have recently introduced legislation that could provide a promising alternative to traditional banks. The Public Banking Act would establish a grant program that would allow for the formation of state and locally administered banks. While this act wouldn’t establish new public banks in and of itself, it would make it easier for public banks to form and to become insured by the FDIC. These public banks would operate as nonprofits, and wouldn’t charge any monthly maintenance fees or require minimum deposits. That would make them accessible to citizens who find themselves shut out of the current banking system. Since they wouldn’t be as focused on turning a profit as traditional banks, public banks could also provide lower interest rates for small businesses and public infrastructure projects, investing in local communities and cutting out Wall Street middlemen. What is public banking? Public banking would function as a public service, like post offices or fire departments. In fact, in many countries, public banking is often directly tied to the postal system. The United States even had its own postal banking system from 1911 to 1966. Today, there is one public bank operating in the United States, the Bank of North Dakota. Unlike privately owned banks, public banks aren’t beholden to shareholders or required to turn a profit at the expense of ordinary consumers. Instead, these banks are able to charge lower fees and lend money at lower rates to local consumers and businesses. Public banks can receive deposits from local and state governments in the form of tax revenue and other government income, and can also partner with existing local banks to fund a variety of projects. How public banking could affect your finances For many people, banking with a public bank would be pretty similar to banking with a traditional for-profit bank. Some of the potential benefits of public banking could include providing access to banking for more Americans, investing in local and community projects, and effectively delivering relief funds and government payments. Helping unbanked and underbanked Americans As of 2019, approximately 7.1 million American households were unbanked, meaning that no member of the household had a checking or savings account with a bank or credit union. For many Americans, high minimum deposit requirements prevent them from opening an account, while others cite excessive fees and a lack of trust in private financial institutions as reasons why they do not have a bank account. When money is tight, these Americans often rely on alternative services, like payday loans or pawn shops, with high fees and punishing interest rates. Public banks would charge no monthly maintenance fees and have low or no minimum deposit requirements, making them accessible to many Americans who currently fall through the cracks of the private banking system. Public banking would also provide an alternative for Americans who have bank accounts but are currently dissatisfied with their bank or unable to qualify for other financial products. Investing in local communities Because public banks would not be compelled to pursue sky-high profits, they could offer loans at low interest rates to fund local businesses and public infrastructure. These could include projects like affordable housing and renewable energy. Some public banks, like the Bank of North Dakota, also offer low-interest loans to students and other specific groups. Public banks would cut out the middleman and keep funds local, instead of profiting national banks, executives, and shareholders. Effectively distribute relief funds During the pandemic, millions of Americans were eligible for relief funds and stimulus checks to help them weather the turbulent economic times. While some Americans were able to receive funds directly to their bank account through direct deposit, others were mailed paper checks they had to cash, often accompanied by high check-cashing fees. Still, other Americans waited weeks or months for their funds to arrive, during a time when money was tight. Public banks would be one way to easily and effectively distribute funds to Americans, without relying on private institutions. They would expand access for Americans without bank accounts and would prevent predatory services from taking a chunk out of much-needed relief funds. Better for the environment Another way public banks would operate differently than private banks is in their effect on the environment. The Public Banking Act would prohibit public banks from investing in fossil fuel projects, and would instead provide public banks with the capability to issue low-interest loans for environmentally-friendly projects. This puts public banks in stark contrast to private banking behemoths, who have invested over 2.7 trillion dollars in fossil fuels since 2016, according to a report from the Rainforest Action Network. A public alternative to big banks Public banks wouldn’t replace big banks; instead, they’d provide an alternative for consumers dissatisfied with the status quo. This would give Americans the ability to choose between for-profit banks and local, community-driven public banks. In some cases, public banks could even partner with existing local banks to more effectively distribute funds. Public banking wouldn’t solve all of the financial industry’s problems, but it could provide a more ethical alternative to the current options. An important note - While public banks attempt to solve many of the problems of the current banking system, they’re not entirely without flaws. Some potential drawbacks to public banks include potential lack of oversight and insufficient funds, as well as the inherent risk that all banks, public or private, face when it comes to lending money that may not be paid back. Alternatives to public banking For now, public banks still aren’t an option for the vast majority of Americans. However, there are some banking options that beat the competition when it comes to consumer-friendly policies, low fees, and ethical behavior. Credit unions Credit unions share some similarities to public banks in that they aren’t beholden to shareholders and executives, and often have local roots and programs that benefit the community. Like public banks, credit unions are not for profit, but instead of being owned and operated by local or state governments, credit unions are cooperative institutions owned by members. Credit unions also often feature lower fees and rates than for-profit banks. Some federal credit unions even offer Payday Alternative Loans, which allow cash-strapped consumers to borrow money at lower rates than predatory payday loans. Low-fee banks In recent years, consumer-friendly, low-fee banks have proliferated as an alternative to big banks with exorbitant rates and fees. Many of these banks primarily operate as online banks, with simple websites and mobile apps designed to make navigating the banking process easier for consumers. Chime is an example of an online low-fee bank designed with everyday consumers in mind. They feature fee-free overdrafts of up to $100, so you’ll never be charged excessive fees for a poorly-timed withdrawal or accidental overdraft. They also have no minimum balance, monthly maintenance, or foreign transaction fees. CIT Savings Builder is another banking product with plenty of benefits for consumers. This online-only savings account allows customers to grow their savings with an APY of <span class="shortcode" data-alt="[wp_shortcode_62]">1.00%</span>, which is much higher than many other savings accounts. The account does require a $100 minimum deposit and a $100 monthly deposit or a balance of at least $25,000, making it an inaccessible option for some consumers. But for those who want to save money while earning interest, it’s a decent alternative. Ethical banks Many big banks make harmful investments in areas like fossil fuels and for-profit prisons. While these investments are good for a bank’s bottom line, informed consumers may be interested in more ethical alternatives. Banks like Aspiration, Amalgamated Bank, and Beneficial State Bank are B Corp certified, which means that they meet high standards for social and environmental performance, transparency, and accountability. Some banks, like Sunrise Banks and First Green Bank, are members of the Global Alliance for Banking Values, which is a network of banks around the world that are committed to community investments and driving positive change. Still, other banks are designated as Community Development Financial Institutions, or CDFI. These banks are dedicated to providing banking access for low-income and marginalized individuals and communities. Banks like City First Bank of DC, Southern Bancorp, and VCC Bank are all CDFIs. Summary While the Public Banking Act is still only a bill, it represents a promising alternative to traditional banking for millions of Americans. This piece of legislation would also complement other related policy proposals, such as postal banking and the Green New Deal. In the meantime, there are still a variety of banking options with low fees and ethical investment practices for consumers who qualify. Read more: 7 Best Banks Of 2021 - Review And Compare Banking 101---A Guide For Teenagers (And Anyone Who Needs A Refresher - Why is a car's reliability so important?](https://www.moneyunder30.com/wp-content/uploads/2020/12/shutterstock_567879337.png)
Speaking as one of them, most professional car reviewers don’t mention a car’s projected reliability for two different reasons:
- It’s boring.
- It’s hard.
But I’m here to tell you that it’s one of the first things you should look up.
Most reviews will go into detail about the car’s 0-60 time and infotainment system, but these factors shrink into insignificance compared to a car’s overall build quality.
For a parallel, imagine you’re house shopping. Would you really care if a house had a jacuzzi if you knew the roof was going to collapse within two years?
3 reasons why a car’s reliability should be one of the first things you consider
Allow me to expand a bit and show you some dollars and cents.
Owning a reliable car will save you $5,000+ in repairs
The difference between owning a reliable vs. unreliable car is measured in thousands, sometimes even tens of thousands of dollars.
Wait, tens of thousands? Aren’t repairs, like, $600 a pop? How can unreliable cars be that expensive?
Allow me to illustrate using one of my favorite underrated car shopping tools, The Edmunds True Cost To Own®, or TCO. Using data from real owners, the TCO estimates how much it’ll cost you to own a given car for one to five years.
For readers of this site, the TCO is much more important than the sticker price because it tells a complete financial picture.
For example, the sticker price doesn’t account for the following, but the TCO does:
- Tax credit.
- Insurance.
- Maintenance.
- Repairs.
- Taxes & Fees.
- Financing.
- Depreciation.
- Fuel.
It’s in the True Cost to Own that the difference between buying a reliable versus an unreliable car really starts to show.
Take, for example, two of my favorite well-to-do Millennial-mobiles: the 2015 Lexus IS 350 and the 2015 Mercedes C300. They sound expensive, but five-year-old models are actually cheaper than a new Honda Accord.
At first glance, the C-Class seems like the obvious choice. It’s fancier, subjectively prettier, and has better handling.
However, if we control for sticker price and look strictly at TCO, the Mercedes costs $5,666 more than the Lexus to own over five years. That’s because the Mercedes costs $8,174 in repairs alone, compared to the IS’s $2,972.
So really, when shopping Lexus vs. Mercedes, you should add around $6,000 to the price of the Mercedes to see if it’s still worth it.
Reliable cars hold their value longer
Depreciation is the drop in the value of your car over time. Unsurprisingly, unreliable cars depreciate much faster. That’s why, according to Forbes, three of the top five slowest depreciating cars are Toyotas, and three of the top five fastest depreciating cars are BMWs.
Let’s put some numbers behind it. An Audi A3 and a well-equipped Toyota Camry both cost around $34,000 new. If you choose the Audi over the Camry, how much will you lose when you sell it?
Whipping out the trusty TCO tool, you can see that a 2020 Audi A3 costs $46,562 to own over five years total, while a well-equipped Camry of the same price costs just $38,638. In depreciation alone, the Audi will lose $2,500 more value than the Camry over five years.
It’s worth noting, too, that while the Camry loses $2,732 in value after year one, the Audi loses nearly $6,000. Think about that next time you consider buying a brand new German luxury car!
An extended warranty won’t protect you
Let’s say you’ve gotten this far but you still really want a car from a less reliable automaker. Can’t you just cover yourself with an extended warranty?
Well, no. Extended warranties aren’t a good idea for five reasons.
- Warranties don’t cover depreciation. Even with a perfect warranty and routine maintenance, a car everyone knows to be unreliable will still depreciate all the same.
- Warranties don’t cover the opportunity costs of a breakdown. Your extended warranty might cover the cost of repairs but won’t cover your lost time and income from having your car in the shop for days, weeks, or months.
- Warranties cost more than they pay out. On average, one-year extended warranties cost $1,200 and pay out $837, leading to a net loss of $363, according to Consumer Reports.
- Most folks never even use them. Also according to Consumer Reports, 55% of auto warranty holders surveyed never even used them to cover the cost of a repair.
- Auto warranties are among the least-liked products on the market. For a multitude of reasons, not the least of which is that warranty companies find every reason not to pay out, over three-quarters of warranty holders say they’ll never buy one again.
The best “warranty” money can buy is a reliable car. There’s simply no replacement or retrofit for initial build quality.
Honorable mentions
Here are a few smaller, yet notable reasons why reliability should be a top consideration when you’re shopping for a new car:
- Reliable cars are safer. Being unable to drive during an emergency, being stuck by the side of the highway, and breaking down somewhere without cell service are all unsafe scenarios that unreliable cars can put you in.
- Owning a reliable car is less stressful. Nobody likes the feeling of knowing your car could break down at any minute and shoot a hole through your savings. Therefore, owning a reliable car will take a load off!
- Reliable cars are easier to love. It’s hard to bond with someone who keeps letting you down, and cars are no different.
How much money can you save by owning a reliable car?
![Whether you got a new job and are looking for somewhere to stash your paycheck, or are just looking for a new bank that better meets your needs, you may have spent some time considering where to open up a bank account. While there are many private banking options to choose from, not all of them effectively meet customers’ needs. Many Americans are interested in consumer-friendly banks that are accessible and have low or no fees, while others look for banks that have local roots or more ethical behavior than bigger nationwide banks. Still, other Americans are unbanked, meaning that they don’t have access to any checking or savings accounts with a bank or credit union. Looking for an ethical banking experience? Aspiration rewards socially conscious spenders Representatives Rashida Tlaib and Alexandria Ocasio-Cortez have recently introduced legislation that could provide a promising alternative to traditional banks. The Public Banking Act would establish a grant program that would allow for the formation of state and locally administered banks. While this act wouldn’t establish new public banks in and of itself, it would make it easier for public banks to form and to become insured by the FDIC. These public banks would operate as nonprofits, and wouldn’t charge any monthly maintenance fees or require minimum deposits. That would make them accessible to citizens who find themselves shut out of the current banking system. Since they wouldn’t be as focused on turning a profit as traditional banks, public banks could also provide lower interest rates for small businesses and public infrastructure projects, investing in local communities and cutting out Wall Street middlemen. What is public banking? Public banking would function as a public service, like post offices or fire departments. In fact, in many countries, public banking is often directly tied to the postal system. The United States even had its own postal banking system from 1911 to 1966. Today, there is one public bank operating in the United States, the Bank of North Dakota. Unlike privately owned banks, public banks aren’t beholden to shareholders or required to turn a profit at the expense of ordinary consumers. Instead, these banks are able to charge lower fees and lend money at lower rates to local consumers and businesses. Public banks can receive deposits from local and state governments in the form of tax revenue and other government income, and can also partner with existing local banks to fund a variety of projects. How public banking could affect your finances For many people, banking with a public bank would be pretty similar to banking with a traditional for-profit bank. Some of the potential benefits of public banking could include providing access to banking for more Americans, investing in local and community projects, and effectively delivering relief funds and government payments. Helping unbanked and underbanked Americans As of 2019, approximately 7.1 million American households were unbanked, meaning that no member of the household had a checking or savings account with a bank or credit union. For many Americans, high minimum deposit requirements prevent them from opening an account, while others cite excessive fees and a lack of trust in private financial institutions as reasons why they do not have a bank account. When money is tight, these Americans often rely on alternative services, like payday loans or pawn shops, with high fees and punishing interest rates. Public banks would charge no monthly maintenance fees and have low or no minimum deposit requirements, making them accessible to many Americans who currently fall through the cracks of the private banking system. Public banking would also provide an alternative for Americans who have bank accounts but are currently dissatisfied with their bank or unable to qualify for other financial products. Investing in local communities Because public banks would not be compelled to pursue sky-high profits, they could offer loans at low interest rates to fund local businesses and public infrastructure. These could include projects like affordable housing and renewable energy. Some public banks, like the Bank of North Dakota, also offer low-interest loans to students and other specific groups. Public banks would cut out the middleman and keep funds local, instead of profiting national banks, executives, and shareholders. Effectively distribute relief funds During the pandemic, millions of Americans were eligible for relief funds and stimulus checks to help them weather the turbulent economic times. While some Americans were able to receive funds directly to their bank account through direct deposit, others were mailed paper checks they had to cash, often accompanied by high check-cashing fees. Still, other Americans waited weeks or months for their funds to arrive, during a time when money was tight. Public banks would be one way to easily and effectively distribute funds to Americans, without relying on private institutions. They would expand access for Americans without bank accounts and would prevent predatory services from taking a chunk out of much-needed relief funds. Better for the environment Another way public banks would operate differently than private banks is in their effect on the environment. The Public Banking Act would prohibit public banks from investing in fossil fuel projects, and would instead provide public banks with the capability to issue low-interest loans for environmentally-friendly projects. This puts public banks in stark contrast to private banking behemoths, who have invested over 2.7 trillion dollars in fossil fuels since 2016, according to a report from the Rainforest Action Network. A public alternative to big banks Public banks wouldn’t replace big banks; instead, they’d provide an alternative for consumers dissatisfied with the status quo. This would give Americans the ability to choose between for-profit banks and local, community-driven public banks. In some cases, public banks could even partner with existing local banks to more effectively distribute funds. Public banking wouldn’t solve all of the financial industry’s problems, but it could provide a more ethical alternative to the current options. An important note - While public banks attempt to solve many of the problems of the current banking system, they’re not entirely without flaws. Some potential drawbacks to public banks include potential lack of oversight and insufficient funds, as well as the inherent risk that all banks, public or private, face when it comes to lending money that may not be paid back. Alternatives to public banking For now, public banks still aren’t an option for the vast majority of Americans. However, there are some banking options that beat the competition when it comes to consumer-friendly policies, low fees, and ethical behavior. Credit unions Credit unions share some similarities to public banks in that they aren’t beholden to shareholders and executives, and often have local roots and programs that benefit the community. Like public banks, credit unions are not for profit, but instead of being owned and operated by local or state governments, credit unions are cooperative institutions owned by members. Credit unions also often feature lower fees and rates than for-profit banks. Some federal credit unions even offer Payday Alternative Loans, which allow cash-strapped consumers to borrow money at lower rates than predatory payday loans. Low-fee banks In recent years, consumer-friendly, low-fee banks have proliferated as an alternative to big banks with exorbitant rates and fees. Many of these banks primarily operate as online banks, with simple websites and mobile apps designed to make navigating the banking process easier for consumers. Chime is an example of an online low-fee bank designed with everyday consumers in mind. They feature fee-free overdrafts of up to $100, so you’ll never be charged excessive fees for a poorly-timed withdrawal or accidental overdraft. They also have no minimum balance, monthly maintenance, or foreign transaction fees. CIT Savings Builder is another banking product with plenty of benefits for consumers. This online-only savings account allows customers to grow their savings with an APY of <span class="shortcode" data-alt="[wp_shortcode_62]">1.00%</span>, which is much higher than many other savings accounts. The account does require a $100 minimum deposit and a $100 monthly deposit or a balance of at least $25,000, making it an inaccessible option for some consumers. But for those who want to save money while earning interest, it’s a decent alternative. Ethical banks Many big banks make harmful investments in areas like fossil fuels and for-profit prisons. While these investments are good for a bank’s bottom line, informed consumers may be interested in more ethical alternatives. Banks like Aspiration, Amalgamated Bank, and Beneficial State Bank are B Corp certified, which means that they meet high standards for social and environmental performance, transparency, and accountability. Some banks, like Sunrise Banks and First Green Bank, are members of the Global Alliance for Banking Values, which is a network of banks around the world that are committed to community investments and driving positive change. Still, other banks are designated as Community Development Financial Institutions, or CDFI. These banks are dedicated to providing banking access for low-income and marginalized individuals and communities. Banks like City First Bank of DC, Southern Bancorp, and VCC Bank are all CDFIs. Summary While the Public Banking Act is still only a bill, it represents a promising alternative to traditional banking for millions of Americans. This piece of legislation would also complement other related policy proposals, such as postal banking and the Green New Deal. In the meantime, there are still a variety of banking options with low fees and ethical investment practices for consumers who qualify. Read more: 7 Best Banks Of 2021 - Review And Compare Banking 101---A Guide For Teenagers (And Anyone Who Needs A Refresher - how much money can you save by owning a reliable car?](https://www.moneyunder30.com/wp-content/uploads/2020/12/shutterstock_231526426.png)
How much owning a reliable vs. unreliable car will save you depends on which cars you’re comparing, your length of ownership, your adherence to scheduled maintenance, etc.
But on average, given all the Edmunds True Cost to Own® comparisons I’ve made over the years, I’d estimate that the difference in cost of ownership between a reliable vs. unreliable car is around $1,000 per year.
If you plan to buy a less reliable sports or luxury car, that number increases to $1,500 since those cars require more expensive labor and parts to repair.
Summary
I myself own two reliable cars and I adore them like twin golden retrievers.
Both my aging Lexus sedan and Mazda Miata are older than the first Iron Man movie. Both cars are covered in scrapes and dings, get worse MPG than a modern crossover, and don’t quite putter around corners like they used to.
And yet, they’ve never let me down. In their combined 31 years of life and nearly 300,000 miles of driving, neither has ever had a single breakdown or unplanned repair.
The amount of money these two have saved me versus the less reliable alternatives I was considering can be measured in tens of thousands of dollars. I saved on repairs, depreciation, and opportunity costs; I’ve never once had to make an excuse to someone because of my car.
Those things can be measured in dollars and cents, but the peace of mind my reliable cars have brought me can’t. Speaking from personal experience, that’s why I think everyone deserves a car they can trust.
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