Ratehub.ca Roundup: June 2016
A big part of the reason people have such a hard time figuring out money is that things change. A lot. All the time. If life were predictable, money matters would be easy. If home prices and mortgage rates stayed the same, if stock markets were predictable, if emergencies never came up, we’d have a lot less to worry about. This month, we saw a barrage of stories centred around changes that are happening sooner than you think. Some are good, some are bad, and some we just don’t know yet. Read on for our roundup of things that won’t be the same for much longer:
British Columbia flips out over shadow flipping
Times are tough for Vancouver real estate. House prices are still going up and nobody has a good explanation why, although a few suspects include foreign buyers, land use restrictions, and historically low mortgage rates. In the middle of the chaos is the rumoured prevalence of shadow flipping, where a purchaser buys a home and then assigns (resells) it before the deal closes, pocketing the profits and dodging the need to secure financing or pay land transfer tax. This month, the B.C. government took steps to crack down on shadow flipping. Under the new rules, sales contracts can still be assigned but the original seller will need to be the one who profits from the practice. The province will also introduce new identification rules for all real estate transactions, requiring buyers to disclose their citizenship. The move will generate much-needed data about the lower mainland’s favourite scapegoat but it could take a year or more before we get to see the results.
You’re one stop closer to paying your bus fare with a credit card
MasterCard is working with the Société de transport de Montréal (STM) to explore allowing contactless payments as an alternative to cash and fare cards. If MasterCard gets its way, riders will be able to tap their credit cards and pay directly for each ride, rather than carrying and reloading a separate card. The same RFID technology used by MasterCard’s PayPass is used by STM’s OPUS fare card so the plan is feasible. It’s just a question of whether the city is willing to make the necessary changes to the system that was built for OPUS. Public transportation systems are notoriously bad at adopting new technology so don’t be surprised if it takes a couple of years for this plan to become a reality in Montreal.
Apple Pay is expanding in Canada
When Apple Pay launched in Canada late last year, the only payment you could link to it was an American Express-issued credit card. But that’s about to change now that the Big Five banks have announced they’re supporting Apple’s contactless payment system. That means you’ll be able to link Visa and MasterCard credit cards to your phone, as well as debit cards. On June 1, BMO, Scotiabank, and TD Canada Trust launched Apple Pay so get ready to get tapping!
Self-driving cars are disrupting more than just dealerships
When you think of all the changes self-driving cars will bring, one that might not come quickly to mind is how they’ll affect your car insurance. Since humans tend to get distracted, get sleepy, make mistakes, and react slowly, it turns out self-driving cars are actually much safer than the ones we drive ourselves. This is good news for almost everybody except for those who make their money from car insurance. Fewer crashes will mean less payouts and—theoretically—lower car insurance rates. Until we see the day that the majority of cars on the road are self-driving, you’ll still have to resort to the usual tricks like using winter tires and raising your deductible to save money on car insurance.
Pay extra attention to your car insurance renewal
In Ontario, there are new rules for Ontario car insurance that’ll lower rates but also lower the minimum amount of coverage drivers need to carry. The most important change is the combination of coverages for catastrophic injuries. Previously, the minimum coverage was for $1 million for medical and rehabilitation costs, plus $1 million for attendant care. The new minimum will now be $1 million for all of those costs combined. Other changes limit insurers’ ability to raise your rates for minor accidents, reduce the interest insurance companies can charge for monthly payments, and raised the standard deductible amount. No changes will take effect until your policy is due to be renewed.
There are two ways this rule change could catch you out. On one hand, you could be renewed into a lower coverage amount without realizing it. On the other hand, you could end up paying more than you have to by being renewed into a policy with more coverage than you want. If you live outside Ontario these changes won’t affect you but it’s an important reminder to take a careful look at your renewal and make sure you have the coverage you need.
Ratehub.ca Updates
Read our Points Guru post about how the Shoppers Optimum program works, and enter for a chance to win a $50 Shoppers gift card!
At Ratehub.ca, we’re fascinated by how people go about buying a house for the first time. We know from research that first-time homebuyers often get help from parents and make certain sacrifices, but we wanted to know more. So we went out and talked to some first-time homebuyers about their experiences.
Life! There are all these things you want to do like get married, pay for your kids’ education, and have a decent retirement. But how the heck do you save up for all this stuff? Our new infographic, Finance Your Life, takes a lot of expensive life events and shows you in the simplest terms how to get started saving for them.
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