to - MANCHESTER HERALD. Tuesday. July 30, 1985 MANCHESTER FOCUS U.S./W ORLD WEATHER \ BUSINESS MMH census stable Barbecues to go: Speculation increases Heavy rains tonight; after decline in 1984 Try these recipes on Gemayel’s ouster clearing Thursday ... page 2 Business In Brief Car buyers beware ... page 3 ... page 11 ... page 5 Balloon loans are risky alternative owe money if the bank determines that you put on too If you’re in the market for a car, have you been much mileage (a sticky question at best) or didn t asked if you would like to buy with a "balloon loan"? maintain it in top shape. ^ ^ .ho* This type of loan is being actively promoted these The central point; Don’t be fooled by the pitch that days because, with a balloon, you can buy a more Your you can buy more car with a balloon loan. M p r a l J i expensive car than you could with conventional Money's "You’re opening yourself to significant risk, says MmthtBtn financing — and you may not be fully aware that three Stephen Brobeck, executive director of the Consumer ......... * \AyorlnAftdfl\/Wednesday, JiiK July 31. 1985 — Single copy: 25C or four years in the future, you must come up with the Federation of America. "Generally speaking, if you Manchester, Conn. — A City of Village Charm balloon or forfeit the car. Worth can’t afford a traditional installment loan, you won t Balloon auto loans closely resemble balloon Sylvia Porter be able to afford a balloon loan.” mortgages: You pay lower monthly installments, but Consider: Most owners keep cars for around eight at the loan’s maturity you must come up with a large years. If you have to turn in the car after three years final payment (the balloon) or be hit hard. The balloon because you can’t pay the balloon, you have basically is really a hybrid of conventional financing and ended up with an expensive rental. Pagano leasing. At the very least, if you’re at all tempted, make sure [9^ Shultz to set you will pay principal and interest on this amount. The deal is structured like a loan but works like a You also will pay interest on the buy-back price of the you understand what potential obligations, costs and lease. You make regular monthly payments and when car but will not pay on the principal, of course. risks you face with a balloon loan. subject the term expires, you have the option to buy the car. In When the loan expires, you typically have several The old rule is a cliche because it’s true: The more you need a loan, the less you can afford one. Instead of 3 a lease, however, although you have the option t6 buy choices: 3 James W. Ashe Robert S. Lazzari the car, you cannot deduct the payments from your • Buy the car outright by making a balloon taking this apparently attractive but nevertheless groundwork income taxes as you can with a balloon loan. The payment, which can run into several thousand potentially dangerous option, explore at length your of motion conventional financial options. And stretch out the balloons are designed to stimulate auto sales. This is dollars; Tolland Bank the way they work: • Refinance the car, at used-car prices; term of your loan and thereby lower your monthly payments. You select your car model. Your lender estimates • Return the car to the bank; By Kevin Flood promotes three • Or if the bank guessed wrong and the car (I can remember the depression days when my what this model would be worth at the end of the term father, a physician, was still paying for the car he had Herald Reporter Tolland Bank has an­ (say, three years). Usually, the bank guarantees that depreciated less than the estimate, you can sell it in for summit to have to make a living, long after the car had nounced the promotion of the marketplace and pocket the difference as your In another move to head off it will buy back the car at the depreciation price (the chugged its last mile.) three of its employees. greatest depreciation takes place during the first year own “ profit.” professional disciplinary hearings 0 Your bigger risk emerges when the loan runs out. Perhaps you’re buying a car for a spectacular Robert S. Lazzari has you have the car) on the premise that you stay within against their ciient, attorneys for By Jack Redden Perhaps (as Is more likely than not) you can’t pay the resale value or an automobile in a well-known cycle of been promoted from se­ certain mileage limits and you definitely take good Manchester lawyer Anthony F. United Press International balloon. If interest rates have risen, you will face high appreciation. nior vice president to care of the car. Otherwise, stay clear of balloon loans. For most Pagano have asked the Judge who monthly loan payments if you elect to refinance. And HELSINKI, Finland — Secre­ executive vice president, After subtracting the buy-back from the sticker consumers, they seem a sad, bad choice. sentenced him in connection with a price, the bank comes up with the residual price, and even if you return the car to the bank, you might still fatal auto accident last May to tary of State George Shultz and and James W. Ashe and make clear whether or not he also Soviet Foreign Minister Eduard Cynthia S. Harris' have considered professional sanctions Shevardnadze, smiling and Joking, been promoted from as­ against Pagano. today held their first formal sistant vice presidents to Japan unveils new plan Pagano is in the midst of court meeting, where they were ex­ vice presidents. hearings that could result in his pected to lay groundwork for a Lazzari, who Joined the suspension from practicing law or superpower summit later this bank in 1978, is the bank's disbarment. The Grievance Com­ year. senior lending and admi­ mittee of the Hartford-New Britain The two began a scheduled nistrative officer. Ashe is Judicial District asked the state three-hour meeting, described by to ease trade imbalance last fall to consider the sanctions U.S. officials as a get-acquainted a 19-year-empioyee and ■ against Pagano for his role in a session, in the U.S. ambassador’s manages the Coventry exports and lead to the apprecia­ May 19, 1984, auto accident in By Janet Snyder taining to import standards and Georgian-style manor in the diplo­ office. Harris, who was tion of Japanese yen in relation to Burlington that kiiled David R. United Press International certification. matic quarter of Helsinki. elected corporate secre­ The measures contained in the their currencies,” he said. Charest, a 31-year-old computer Shultz and Shevardnadze, who tary in January, is respon­ The strong dollar is often cited TOKYO — Japan, under pres­ plan will be introduced during the sceince teacher from Fall River, met briefly Tuesday at the start of sible for loan servicing. Cynthia S. Harris by trade analysts as the underlying sure to take steps to offset its next three years. Mass. a conference marking the 10th reason for the U.S. trade deficit. But Pagano’s lawyers have anniversary of the Helsinki Ac­ record trade surplus with the "I believe these measures em­ It was not immediately clear United States, today unveiled a asked the Judge who sentenced him cords, chatted briefly, smiling and Rogers earnings down body the best efforts of the what effect the new rules would three-year plan to encourage im­ on the criminal charges stemming laughing, before beginning the Japanese government ... to prove have on the massive U.S. trade Rogers Corp. has reported second-quarter ports and “ prove that the Japanese from the accident to make clear serious discussions. The formal that the Japanese market is the ^ ficit with Japan, which exceeded income of $506,000, or 17 cents per share, down market is the most open in the whether or not he also considered talks were the first between the most open in the world," Komoto |B5 billion in 1984 and is expected to GEORGE SHULTZ from record income of $1.6miiiion, or57 cents per world.” professional sanctions. Pagano’s two since Sheverdnadze took office share, during the second quarter of last year. said. reach $45 billion this year. lawyers — Arthur P. Meisier and a month ago. meets counterpart The package will eliminate or "We believe this action program J The company, which has a plant in Manchester, reduce tariffs on 1,853 products, Leo B. Flaherty Jr. — have argued Relations between the two men J will result in improvements in the The new program would signifi­ had sales during the second quarter of $32.5 ranging from high-technology that if the Judge did consider the seemed warmer than in meetings trade imbalance — that is for cantly reduce the number of Trade between the two nations also million — an 8 percent decrease from saies of items to champagne and boneless sanctions, the current proceedings between Shultz and Andrei Gro­ sure," he said. imports subjected to licensing and was likely to be discussed. $35.3 miilion during the same period iast year. chicken. are improper. myko, the Soviet foreign minister Saies for the first six months of this year totaled Komoto said a working group certification, indycase self- Then-Bristol Superior Court who was moved to the largely A day earlier, Shultz and She­ $67 million, slightly lower than the sales of $67.3 The plan covered several would be set up to stimulate certification by foreign importers, Judge Julius J.