May 24

Today, a guest post from Crystal –

Buying your first car is a major milestone, but it’s also a significant purchase that can have long-lasting financial repercussions. You’ll want to choose a vehicle that suits your lifestyle and budget, both in the short and long term. For first-time buyers, navigating the ins and outs of car ownership can seem like a daunting process. Fortunately, there are numerous options are your disposal, particularly when it comes to financing. Keep the following tips in mind to stay firmly on budget.

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Image Source: Wikimedia Commons Public Domain

 

Check your credit rating.

If you’re fresh out of school and have just started your first real job, you may not have much of a credit history to speak of. Check your credit rating to find out if there are areas with room for improvement, because this factor will have a major impact on your ability to obtain sensible financing.

Set a budget in advance.

When you’re comparing cars, you probably are already looking at sticker prices that fit within your budget. You also need to look not only at the bigger picture but at the monthly breakdown of car ownership, and stick to your guns when the time comes for negotiation. A good general rule is not to agree to monthly repayments that cost over 20% of your disposable income. This figure should include the car repayments, fuel, and insurance. Look at your finances carefully and choose a maximum figure that you’ll be able to afford.

Stay away from dealer financing.

There’s a definite appeal to obtaining your financing from the car dealership, as this allows you to walk out the same day with the keys to a new car. However, you’ll usually pay extra for this convenience, because financial institutions may offer you more advantageous rates. Before you visit the dealer, at the very least you should obtain quotes from other sources so that you know what your options are. This gives you more room for negotiation with the dealer, and can spare you the extra financing charges that dealers would charge.

Compare loan terms and interest rates carefully.

Whether you approach banks or auto dealers to obtain quotes, you’ll be faced with a variety of loan options. Two areas to look at are interest rates and loan terms. A common mistake for first-time buyers is to agree to a longer term in order to cut monthly repayments, but you’ll pay a lot more in the long term if you go this route. Ideally, your loan term should fall within the 3-5 year range. Similarly, interest rates could vary quite a bit between lenders so try to source several different options to get the best rates. The higher the deposit you’re able to pay, the lower your interest rates will be.

Read the fine print.

When you agree to a car financing plan, you’ll be offered additional services such as payment protection insurance or gap coverage. Be sure to read the loan terms and conditions carefully to avoid paying for these without your consent, however. Lenders may also slip in additional charges such as early repayment or administrative fees. Read the contract from beginning to end, and always ask if you see terms you don’t understand.

By taking the time to set a budget, search outside the dealership for a loan, and read all terms and conditions carefully, you can set yourself up for a better deal on your first car.

written by Joe \\ tags: ,

May 30

A Guest Post today from my friend Crystal –

No-fault states often require that people purchase much more auto insurance than tort states, so it’s not a surprise that nine of the ten cities with the most expensive auto insurance rates are in two no-fault states. The following 10 cities have higher auto insurance rates than any others in the country:

• Detroit, Michigan ($4,599)
• Highland Park, Michigan ($4,214)
• Brooklyn, New York ($4,133)
• Fort Hamilton, New York ($3,947)
• Grosse Pointe Park, Michigan ($3,504)
• Bronx, New York ($3,443)
• Allison, Texas ($3,385)
• St. Albans, New York ($3,233)
• Springfield Gardens, New York ($3,213)

According to autoinsurancequotes.com in no-fault states, it doesn’t matter who caused the collision. The at-fault person will not be required to pay the medical bills of everyone who was hurt. The insurance company that insures the vehicle in which the injured parties were riding will be required to pay the medical bills up to the limits of the PIP insurance policy.

Required Insurance Coverage in Michigan

Along with Personal Injury Protection (PIP) insurance that pays everyone’s medical bills, Michigan residents must purchase Property Protection insurance in the amount of $1 million. Even though Michigan is a no-fault state, drivers are still required to purchase bodily injury and property damage liability insurance coverage. Generally, people are only required to purchase bodily injury and property damage liability insurance coverage in other states. Therefore, the greater amount of coverage and the higher limits will naturally increase the prices for people living in Michigan.

Required Insurance Coverage in New York

New York is also a no-fault state, and a greater amount of insurance coverage is required of drivers here as well. Motorists must have a certain amount of bodily injury and property damage liability coverage, but they are also required to have PIP insurance as well as uninsured and underinsured motorist bodily injury coverage.

Higher Rates for Everyone

In the cities mentioned above, even people in the most desired demographic who have the greatest driving records will be quoted auto insurance rates that are higher than they would receive in other cities. The reason is that insurance companies base their quotes on the zip code in which their customers live. For example, insurance companies perform research on different cities in which they sell insurance, and they often discover that more claims for auto insurance coverage come from customers from a particular zip code. Because this is the case, anyone who is driving in this zip code has a greater chance of filing a claim with the insurance company, and these drivers will be assessed higher rates.

Auto insurance companies set rates based on more than just the number of claims filed. The number of accidents and thefts and vandalism rates also play a role. Cities with a high risk for most or all of these factors are going to be the ones that have the highest auto insurance rates. Auto insurance companies charge clients who are less likely to need to use their insurance coverage lower rates, and those who live in high risk areas in no-fault states don’t fit this description.

How is your car insurance bill? Anything close to these top-ten cities?

written by Joe \\ tags: , ,

May 07

A guest post by Nick Simpson –

Car insurance isn’t just something that’s nice to have; it’s required by each of the 50 states if you want to operate a motor vehicle. For some, car insurance is a necessary evil; it’s an added expense on top of already-tight budgets. Other people recognize the value and protection that it provides, and don’t mind paying for it.
To make things even more complicated, insurance rates can vary greatly from one state to the next. Here’s a list of some of the most expensive states to insure your car:

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  1. Louisiana. Year after year, Louisiana tends to be either #1 or #2 in terms of the most expensive states for car insurance. There are a couple of reasons why premiums are so high in the land of Jazz and Cajun food. First of all, jury trials in Louisiana are only available on claims of above $50,000. That means many insurers settle out of court, usually at $49,999. Add to the fact that Louisiana’s road infrastructure is one of the worst in the country, and you can begin to see why they’ve got insurance problems.
  2. Michigan. Vying for the top spot is Michigan. The birthplace of the automobile is also one of the most expensive states to insure that automobile. Michigan has a mandatory requirement that auto insurance provide lifelong medical care for the injured parties in an accident, regardless of their own policy limits. This “Personal Injury Protection” requirement pushes prices into the stratosphere. Add in the high unemployment rate (Michigan has never fully recovered from the post-9/11 recession, and was even further devastated after the housing crisis) with so many uninsured motorists, and prices have remained high.
  3. Oklahoma. Liability is a required coverage in the Panhandle State. The high liability minimums are required to cover bodily injury as well as property damage. In addition, the state’s insurers levy heavy penalties against those who allow their coverage to lapse, as well as severe penalties for driving without having a proof of insurance. These factors have pushed rates up steadily in the state for years.
  4. Montana. This western state is pretty uptight about insurance overall. If you’re caught driving without insurance, you can get a three-month jail sentence. Do it several times and you can lose your license for good. In addition, Montana considers all new drivers as “high risk” – not just those who have multiple accidents in their history. New drivers can provide proof of having completed a driver’s education course to get a bit of a discount, but rates are still higher than in most other states.
  5. California. The nationwide average for accidents that are caused by uninsured drivers is 14%. In California, a full third of accidents are caused by uninsured drivers. What that means is that drivers carry uninsured coverage, so that their insurance is going to make the payments regardless of who is at fault. This means that the rates in California continue to rise, at almost the rate that the number of residents does. It’s that growing population – one in eight Americans lives in California – and you wind up with millions of accidents and insurance claims in that state each year.
  6. South Dakota. Like some of the other top states, South Dakota has some of the highest coverage minimums. Their bodily injury, accident liability, and property damage minimums are higher than all but two other states. This has shown a steady rise in premiums over the past several years.
  7. New Mexico. New Mexico’s minimum coverages are fairly high, near those of South Dakota. Only their property damage minimum is less than South Dakotas. New Mexico is also one of the states that allows insurers to base your auto insurance premiums, in part, on your credit history. During tough economic times, credit histories get worse and insurance costs therefore increase – which is what’s happened in the past few years in New Mexico.

If you live in one of these states, it’s important that you do your research when you’re getting ready to buy a car. Find out which cars will cost you the most, and which ones will get you an insurance break.
You also need to talk to your insurer to find out what kinds of discounts are available. Often, you can realize substantial savings on your car insurance if you have multiple vehicles, multiple drivers on the policy, or if you bundle your auto insurance with other insurance policies.

Nick Simpson is Social Media Coordinator at Fred Loya Insurance. Fred Loya provides general car insurance as well as unique services catered specifically to customers in multiple states. Car insurance in Colorado and auto insurance in California are two areas where they have excelled in recent years.

written by Joe \\ tags: , ,