auto insurance

How to Get the Most Auto Insurance Coverage for the Money

October 4, 2019 by admin Leave a Comment

Auto insurance will cost you, but savings can be had.

The cost of auto insurance puts a huge dent in some wallets. Drivers in Michigan, Louisiana, and Oklahoma pay far above the national average while drivers in Maine pay the least.[1] Among auto insurers, rates can vary widely, and consumers don’t always know why they’re being charged so much.

You can’t do much about the state where you live—besides moving—but you can get the most coverage for your money by keeping some things in mind as you shop for auto insurance.

Credit Matters

Your credit history reflects on what you pay for auto insurance. Insurers develop an “insurance-risk score” or “insurance credit scoring” based in part on your credit score, theorizing that you’re less likely to file a claim if you have good credit.[2] Your credit score is easily available to you, but your insurance score is not (typically, you’ll have to visit a credit monitoring service such as TransUnion to find it, not your insurance company). In any case, if your credit score is high, then your insurance rates should reflect your insurability.

Personal Demographics

Your marital status, gender, age and the city where you live are factors in determining insurance premiums. The last category can make a big difference in what you pay—if your zip code or street address is coded wrong, you might be charged a rate far above what you should be paying.[3] Therefore, it is important to review your declarations page for accuracy.

What You Drive

Before purchasing that turbocharged sports coupe, contact your auto insurer to get a quote for car insurance. Indeed, your agent can tell you which cars cost the most to insure in any given vehicle segment. Engine size isn’t the only consideration: insurers charge more for cars that don’t hold up as well in an accident. They may also raise rates for cars without recent safety features including side curtain airbags, rearview cameras, and lane departure warning.[4]

Your Driving Record

If you have tickets, then you may have points on your driving record. Points send a signal to auto insurers to raise your rates based on an algorithm set by each insurer. Your insurer won’t tell you how that works, but you can contact your Department of Motor Vehicles to obtain your driving record. If old points have not been removed from your record or points have been wrongly assigned to your record, you can have the DMV make the correction and forward a copy of your updated record to your insurer.[5]

Seek Discounts

Insurance companies offer discounts for drivers who drive just a few thousand miles in one year. Further, discounts are offered if you insure your auto and home with the same company, have been with that company for several years, are a safe driver or have recently completed a driver’s training course. Ask your insurance agent about available discounts—information that’s not always readily volunteered.[6]

Shop Around

Get at least three price quotes from different insurers with similar coverage to make comparisons easier. You may be able to save money by dealing directly with a company over the phone or via the Internet instead of through an insurance agent.

If you belong to an alumni association, a business group or some other association, a group plan can offer additional discounts. Moreover, ask your employer if the company offers a group plan for its employees and their families.

Save Money

It pays to review your auto insurance policy annually as it may reveal overlooked discounts or even mistakes that are costing you money. Never assume your policy reflects your current information as your address may have changed, drivers may have been added or dropped, or other factors may influence what you pay.

Sources

[1] Insure.com: Car insurance rates by state, 2019 edition — https://www.insure.com/car-insurance/car-insurance-rates.html

[2] The Balance: What is Insurance Credit Scoring? https://www.thebalance.com/what-is-insurance-credit-scoring-4156729

[3] The New York Times: Your Neighbor in an Adjacent ZIP Code May Pay Less for Car Insurance — https://www.nytimes.com/2018/10/19/your-money/car-insurance-neighbor-zip-code.html

[4] Insurance Information Institute: What determines the price of an auto insurance policy? — https://www.iii.org/article/what-determines-price-my-auto-insurance-policy

[5] North Carolina Department of Motor Vehicles: Driving Records — https://www.ncdot.gov/dmv/offices-services/records-reports/Pages/driving-records.aspx

[6] Allstate: 6 Car Insurance Discounts That May Save You Money — https://www.allstate.com/tr/car-insurance/tips-for-car-insurance-discounts.aspx

Image by 3D Animation Production Company from Pixabay

What You Must Do Following a Car Accident

September 14, 2019 by admin 3 Comments

Getting into a car accident is no small matter. Your problems and grief are compounded if someone was seriously hurt or killed. Regardless of the extent of the casualties, there are some things you must do immediately following a car accident.

1. Pull off the road.

If possible, pull off the road and as far off the shoulder as you can. Moving a car may not be possible due to damage and personal injuries. If the vehicles cannot be moved, ensure that oncoming traffic sees you. This may include asking other motorists to pull up, drop flares, turn on emergency signals, and stay with you until help arrives.

2. Check the condition of each passenger.

If the injuries are minor, then the urgency for medical help is not so great. Even so, you need to verify the condition of the people in your car as well as in the other cars. If you know first aid, then begin to apply it. Ask someone else to call for emergency assistance. The greater the injuries, then the more that time is of the essence. Ask for help from others who arrive at the scene. A medical practitioner can perform first aid and stabilize the injured.

3. Await the police.

Unless your accident is minor and is composed only of a fender bender, you’ll need to have the police on hand to file a report. That report should be available a few days after the accident, therefore obtain a copy to forward to your insurance company as quickly as possible. If you handle the accident without the police being present, then exchange all pertinent information, including driver’s licenses, registration, insurance information, and contact numbers. Write this information down, but if you don’t have a pen handy, taking pictures of the documents with your smartphone is another option. When talking with the police, never admit guilt. Simply explain your story and allow them to draw the conclusions.

4. Contact your insurance company.

Once all people have been stabilized and your report taken, contact your insurance company. If your car is not movable, you’ll need to call for a towing service too. Your insurer or your auto club should be able to send a wrecker. When talking to your insurance company, provide as much information about the accident as required. Your insurer will send out a claims adjuster to look at the car and make a declaration based on the damage. If there are personal injuries, you’ll be submitting those bills too. If you are not certain about how the process works, your insurance representative is there to help you. Ask questions and listen carefully for the answers.

5. Follow up.

Your work isn’t done even if after you receive a check from your insurance company. If the car is repairable, then you’ll need to take it to a collision repair shop to have it worked on. If possible, get at least three estimates. Compare the rates, check references, and go with the company with the best reputation. Certainly, price matters, but you need to get the job done correctly. If your car has been totaled, then you will need to shop for a new car. In the interim, your insurance company may have a rental car to keep you behind the wheel until you’re able to repair or replace your current model.

After Crash Considerations

When you have a car accident, you want to be made whole. Your insurer will help rectify the problem and will go after the other insurance company, if necessary. If the settlement amount does not suit you, then file an appeal with your insurer. In some cases, you may have to retain an attorney to ensure that your rights and financial position are protected.

Lastly, If you’re battling with personal injuries or someone you love has been hurt, then make sure you’re getting all the help required too. This is where a personal accident attorney may be able to intervene, to ensure that your disability claims and ongoing medical needs, as well as your financial losses, are addressed.

Photo credit: Pixabay.com

How to Prep Company Cars for Employees

June 21, 2019 by admin 1 Comment

One way to attract and retain talent is by including a company car in your employment offer. Even if used primarily for business purposes, personal use may be permitted, perhaps with some restrictions in place. However, before you hand the keys to a company car to an employee, there are certain matters to consider. Address these issues now and you’ll avoid potentially serious problems later.

What you should know before offering a company car to an employee.

1. Auto insurance

Your employee isn’t responsible for insuring the vehicle you lease or buy. That’s your responsibility and such coverage is not part of your business owner’s policy.

Instead, contact your company’s insurance agent and find out how each vehicle should be listed along with the related coverages. Your agent will ask a series of questions to determine the types of coverage needed, including liability risks. The Business Auto Coverage Form (BACF) is the standard contract for supplying auto liability. Choose the right level of liability to protect your business.

2. Fuel payment methods

You have several options available when employees pay for fuel. Some businesses prefer check payments, but check acceptance is on the decline and also creates an added layer of paperwork for employees. Cash is always king as it never restricts where your employees can fill the tank. Here, you must require employees to collect a receipt to submit for reimbursement.

By far the most popular way to pay for gas after cash are credit cards. In this example, you would issue a credit card to your employee, establish the parameters for use (e.g., fuel purchases and perhaps vehicle maintenance).

Credit cards are convenient as no paperwork is required. The downsides are the various transactional, incidental, and flat fees charges. Another choice is making online payments, an emerging trend that may be conducted via the employee’s smartphone.

3. Vehicle maintenance and repair

Beyond refueling the vehicle as needed, who will be responsible for the upkeep? That’s a responsibility that can be entrusted to the employee.

Here, you can require employees to keep the vehicle clean inside and out. The company car is a reflection of your business, therefore if it looks grungy that’ll reflect poorly on your enterprise. Furnish your employees with a maintenance schedule and require that state inspections be accomplished.

You might also require internal inspections bi-annually to ensure the work has been done and that all paperwork is in order. Head off problems before they occur and you’ll avoid trouble later such as when exceeding the lease mileage limit.

If you prefer your business to handle all maintenance requirements, you can still have employees maintain a log tracking the miles driven and for listing possible problems including the check engine light. Motor club membership can prove invaluable for managing emergencies when employees find themselves stranded.

4. Personal use parameters

What type of restrictions should you impose on your employees when using a company car for personal use? Keep in mind that the Personal Use of a Company Car (PUCC) is considered a non-cash fringe benefit, one that you might restrict to executives, your sales team, or any other employee with special skills. This means a portion of the car’s value comprises part of the employee’s total compensation for tax purposes and must be reported. Your company’s accountant can offer guidance here.

Establishing a mileage limit is important if the vehicle is a business lease. Restricting driving to the 48 contiguous states may be necessary, especially if the added cost of carrying an insurance rider for trips to Canada or Mexico is prohibitive. You might also restrict company vehicle usage to your employee and spouse, insisting that teenage offspring not drive it.

Driving Considerations

So, what type of company car should you offer your employees? A lot depends on your company and where your business is located. If you’re in an urban location, a hybrid or an electric vehicle makes sense. There may even be a tax break for installing charging units on the premises. Most company cars are sedans or SUVs as these vehicles allow your employees to transport clients with ease.

As for the tax loophole on business vehicles weighing more than 6,000 pounds, it is still in place. However, the big drawback here is that the vehicle must be 100 percent used for business and that means employees can’t use your Chevrolet Suburban or Toyota Land Cruiser company car on their time without socking it to your business.

Lastly, your business has the right to terminate company car privileges at any time. Require your employees to maintain a clean driving record as a condition for using the car. This also means getting off on the right foot by requiring employees to agree to allow your business to review their driving record before you hand them the keys to a company car.

Notes

Insurance Information Institute: Business Vehicle Insurance — http://www.iii.org/publications/insuring-your-business-small-business-owners-guide-to-insurance/specific-coverages/business-vehicle-insurance

Bond Street: Different Payment Methods For Your Small Business — https://bondstreet.com/blog/payment-methods-small-business/

The Horton Group: How a “SMALL Perk” Can Cause Big Problems — http://www.thehortongroup.com/resources/how-a-small-perk-can-cause-big-problems

IRS: Employer’s Tax Guide to Fringe Benefits — https://www.irs.gov/pub/irs-pdf/p15b.pdf

Business Management Daily: IRS issues tax roadblocks for vehicles —http://www.businessmanagementdaily.com/43052/irs-issues-tax-roadblocks-for-vehicles#_

See Also — 7 Ways to Trim Car Insurance

IIHS Crash Testing and Your Insurance Premiums

May 10, 2019 by admin

Both the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS) conduct crash tests to determine specific vehicle model safety. Both sources should be considered by consumers when purchasing a new or late-model used vehicle. When it comes to setting auto insurance rates, it is the IIHS testing that the insurance companies use to determine your insurance premiums.

About the IIHS

The IIHS is wholly funded by numerous insurance companies ranging from smaller companies such as the Rockingham Group, Tennessee Farmers Mutual Insurance Company and Grange Insurance to such household names as GEICO, State Farm and Allstate. Additional funding is provided by several insurance funding associations.

Founded in 1959, the IIHS is an independent, nonprofit educational and scientific organization whose mission is to reduce insurance losses from crashes on America’s roads. The IIHS opened its Vehicle Research Center in Virginia in 1992 where it conducts front, rear and side tests on vehicles and assigns a rating. The institute uses crash test dummies and sled labs for vehicle testing, and also tests child booster seats. Yes, the test scores can affect your insurance premiums (more about this later), but not your uninsured motorist claim.

Five IIHS Crash Tests

Since the IIHS began testing vehicles in 1992 it has modified and expanded its crash testing to encompass additional areas of the car. Its earlier tests measured moderate overlap front crashes as well as rear crash protection to assign a head restraint rating. Side-impact and roof strength tests were added later; a small overlap front test was added in 2012.

The IIHS’ moderate overlap frontal test has a vehicle traveling at 40 mph toward a barrier. The barrier face, of aluminum honeycomb construction, measures approximately two feet tall. Behind the wheel sits a crash test dummy, one that is equal in size to the average male driver. This test has 40 percent of the total width of the vehicle hitting the barrier on the driver’s side. It then measures the impact of the crash on the vehicle as well as on the driver.

The small overlap frontal test also has the vehicle traveling at 40 mph, with 25 percent of the vehicle required to hit a 5-foot rigid barrier, similar to a vehicle hitting a fixed object such as a telephone pole. The same sized crash test dummy used in the first test is used here with the IIHS paying especially close attention to how vehicle restraint systems such as airbags and the vehicle’s safety cage protect the driver.

A side test has been used by the IIHS since 2003, one that employs a moving barrier that weighs 3,300 pounds and corresponds to the weight of a small SUV hitting the driver’s side of the vehicle. Crash test dummies similar in size to an average sized female driver as well as a child sitting in the rear seat behind the driver are used. The IIHS also conducts a roof strength test that employs a metal spike that is pushed into one side of the top of the vehicle and is required to bear a force that is four times the vehicle’s weight before reaching five inches of crush to achieve a good rating. This test mimics what a vehicle might experience in a rollover accident, something that takes the lives of thousands of people annually.

Since 1995, the IIHS has been conducting rear crash testing with an eye toward measuring the impact of front seat vehicle restraints, particularly headrests. Whiplash injuries can be minimized with improved head protection, with this test approximating a rear end collision corresponding to a 20 mph crash against a stationary vehicle.

Assigning Ratings to Evaluated Vehicles

Car manufacturers strive to meet the highest crash test ratings offered by the IIHS. It is a two-tier rating system that gives vehicles either a “top safety pick” or “top safety pick+” rating, the latter assigned to vehicles that have completed the moderate overlap front test.

To achieve a top safety pick+ rating, vehicles must have received good ratings in four of the five tests and no less than an acceptable in the fifth test. A top safety pick designation is assigned to vehicles that receive good ratings in a rollover, rear, side, and moderate overlap front tests.

Four grades are assigned with each test: good, acceptable, marginal and poor. The IIHS maintains scoring for vehicles from its earliest test years and posts that information to its website.

Ratings and Your Insurance Premium

Your chances of being injured in an accident are far greater in a lighter vehicle. And that is why the IIHS advises consumers to “pass up very small, light vehicles” in its Shopping for a Safer Car brochure. Choosing vehicles that rank higher by the IIHS will result in lower insurance premiums. You can save additional money by opting for a higher deductible, bundling your home and car insurance policies, and searching for discounts.

Vehicle safety testing helps insurers and consumers alike. Insurers assign risk based on a number of factors including your vehicle’s crashworthiness. Save money on insurance and improve your chances of surviving an accident by buying a vehicle that has a top safety rating.

How to Save Money on Car Insurance

November 2, 2018 by admin 3 Comments

Your car insurance costs may be on the rise with several factors possibly contributing to that increase. For example, a new driver, a different car or a change in coverage can send your rates soaring. Just the same, you can save money on auto insurance by implementing the following money-wise strategies immediately.

2019 Lexus ES

1. Review Your Credit Reports

Every consumer shopping for car or homeowners insurance is assigned an insurance score. That three-digit score is based on certain credit report characteristics and is used to measure risk, not creditworthiness. Just as you can retrieve your credit score, you can obtain your insurance score.

Because both your insurance score and your credit score are based on your credit reports, you should review all three of your consumer credit reports to determine if there are problems listed that may contribute to a lower score. For instance, late credit card payments, high outstanding balances on certain loans and a checkered credit history can impact both scores.

Free copies of your credit reports are available through AnnualCreditReport.com. Review your reports for accuracy and work on building a better credit history. Gradually, your insurance score will rise thereby lowering your auto insurance rate.

2. Review Your Insurance Coverage

How much insurance do you have? How much insurance coverage do you need? If you have not reviewed your auto insurance policy in some time, do so before it is set to renew.

You can save money on car insurance by assuming greater risk. Instead of a $200 deductible for comprehensive coverage, consider $500. Collision coverage is ideal for most cars that are less than 10 years old, while dropping collision coverage for high mileage older vehicles can save you money.

New drivers on your policy will cause your insurance rates to spike. Encourage your teens to maintain good grades as insurers offer discounts for students that have at least a “B” average.

2019 Volvo XC40

3. Qualify For Discounts

Insurers regularly offer discounts to consumers in a bid to attract and retain their business. You may qualify for discounts in several areas, immediately reducing your auto insurance premium by at least 10 percent.

Consumers who use the same insurer for their cars and home will receive a discount for bundled insurance. Contact your insurance agent to inquire about available discounts including safe driver, anti-theft device and for completing a defensive driving course. Affinity discounts are available if you belong to certain associations or organizations, such as a credit union.

4. Improve Your Driving Record

Points on your driving record can send your car insurance rates soaring. Employing safe driving habits can gradually lower your rates with your record typically cleared of all of its infractions within three years.

You can speed up the point reduction by completing a department of motor vehicles approved safe driving course. Visit your state’s DMV site to learn what courses are available. Typically, if you successfully complete a state-recognized driver safety course, the DMV will shave as many as three or four points off your driving record, lowering your car insurance premium.

2018 BMW 740e

5. Consider Your Future Car Purchases Wisely

Your heart says, “sports car” but your head says “family sedan.”

Although there is nothing wrong with following your heart, your head may insist that you save money. This is where your choice in vehicle matters and will affect your insurance rates.

But before you buy any car, make a call to your insurance agent to receive an insurance quote. You can also find out which vehicles will cost you less by visiting the Insurance Institute for Highway Safety’s website to retrieve the crash test ratings for today’s new cars.

The IIHS is funded by the major insurance companies and your rates are based in part on how well a car holds up in a crash. Choose a model with a “top safety pick+” rating and your insurance agent will offer a correspondingly lower rate quote than a vehicle that isn’t rated as high.

Other Underwriting Factors

Each auto insurance company has its own insurance rating system, but there are general guidelines these companies follow that make it possible to compare coverage. Other factors that can affect your insurance rates include where you live, your gender and age, your marital status and the number of miles you drive annually.

Low-Income Drivers Penalized by Auto Insurers

June 28, 2016 by admin 1 Comment

Americans resoundingly reject non-driving characteristics in determining auto insurance rates.

If you’re a low-income American, chances are you’re paying plenty more for auto insurance than other citizens even if you have a similar driving record and home address. Those are the findings of the Consumer Federation of America (CFA) based on a study the non-profit organization released on Monday.

Low Income Status = Higher Insurance Premiums

The CFA evaluated minimum limits liability premiums shared by men and women in 15 cities by five of the nation’s largest auto insurers. Specifically, the CFA found that premiums surged by an average of 59 percent, or $681 annually when characteristics of the drivers were changed to denote a lower economic status. Auto insurance is required in all states with New Hampshire the lone exception. Insurance is regulated at the state level.

“Insurance companies should judge you on how you drive, not who you are,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner. “Insurance companies are penalizing good drivers by hundreds and sometimes thousands of dollars each year based on economic and social status, and the end result is that the poor pay more, much more.”

Five Non-Driving Factors

Auto insurers use five factors when developing quotes for consumers. They are: level of education, occupation, homeownership status, ownership of a car during the prior six months, and marital status.

The CFA found that drivers with the same driving record and living at the same address may pay dramatically different rates, especially if multiple factors are considered. For this study, 15 cities were examined with the five largest auto insurance companies surveyed — Allstate, Farmers, GEICO, Progressive, and State Farm studied.

The study revealed the average premium for all drivers with high economic status indicators was $1,144. On the other hand, the low economic status driver is charged $1,825. That’s 59 percent or $681 more than people with a higher net wealth.

Of the five insurers survey, GEICO (92 percent) and Progressive (80 percent) charge the largest premium increases to lower income drivers residing at the same address. The largest per dollar increases come from Allstate ($915) and Farmers ($900). The lowest increases are assessed by State Farm, which charges $217 more per year or is 13 percent higher.

Your Home Address

Depending on where you live, your auto premium as a low-income driver can come in much higher than average. Drivers in Queens, Jersey City, Boston, Atlanta, Minneapolis, Houston, and Jacksonville face the most significant increases, topping $700 per year versus high-income drivers.

On the other hand, if you live in Los Angeles your rate may average only $80 per year higher, an increase of 9 percent. That’s due chiefly to a 1988 voter proposition passed by Californians whereby non-driving-related factors (except for marital status) could not be considered by the insurance companies.

Survey Says

The CFA authorized ORC International to conduct a poll of 1,000 Americans from June 9-12, 2016, to gauge their opinions about auto insurance. The organization discovered that a large majority of Americans believe that auto insurance premiums should be related to policyholders’ driving safety record and accident history. They also indicated that the insurance companies should not use personal economic factors such as their education or occupation in establishing rates.

In particular, 84 percent of Americans believe that auto insurers are acting very or somewhat fair in using moving violations as a factor in developing insurance quotes. Some 83 percent believe that if drivers are in an accident they caused, then their rates should be reflected accordingly.

When non-driving factors are considered, the respondents shifted their answers dramatically in support of the drivers.

Indeed, only 38 percent believe that credit scores should play a factor in determining insurance rates. Home ownership (35 percent), job occupation (35 percent), and marital status (32 percent) were other factors considered. Only 30 percent agreed that no previous insurance because of no car should be a factor. Some 29 percent thought education level should be used as a determining factor.

“The American people don’t like the idea of insurance companies using personal and economic factors to set premiums, even though most people don’t realize how much of an impact these non-driving characteristics have on the price they pay for coverage,” said the study’s co-author Doug Heller.

In two instances, the insurers bucked the trend, giving lower-income drivers an edge. For instance, Allstate lowered rates by 19 percent for the lower economic status female driver in Chicago and by 4 percent for both male and female drivers in Oklahoma City.

Free Quotes or Not

As is common practice, the insurance companies provide online quotes for consumers, but not always. The CFA has found that if income status is changed from high to low, then online quotes are typically not supplied to the latter. Even with such key factors as address and driver record considered, the insurance companies often refer people to local brokers or to partner companies.

The CFA continues to advocate a state-by-state change to auto insurance underwriting to adopt more equitable methods for determining insurance rates. Because auto insurance is mandated by law in all but one state, then regulators and legislators should protect consumers from unfair practices, including those outlined in its report.

Buying a Car: Paperwork and Other Documentation

April 13, 2016 by admin 1 Comment

When closing a deal on a new or used car, paperwork and other documentation must be submitted and completed before the deal is finalized. And the last thing you want is to make a trip to the dealer only to discover you’re short one or more documents. The following list is composed of those items you may need in your possession as you seal the deal.

Hyundai Sonata.

1. A valid driver’s license. You carry your driver’s license with you, but is it still valid? Pull out your driver’s license before you head to the dealer to verify that it hasn’t expired. If it has, then you won’t be driving your new ride home until it has been renewed!

2. Your trade-in’s title. If you’re trading in your vehicle for another one, you need to hold its title. The title is clear for transfer if you own the car outright. Otherwise, if there is a co-signer listed or a lien on the vehicle, you’ll need to settle with this person first. Be careful here — if you make a mistake, you’ll have to touch base with the Department of Motor Vehicle to make a correction, a time consuming task. You might also contact your dealer ahead of time to find out how best to handle the title.

3. Your trade-in’s registration. A title is one thing, but your vehicle also must have a valid registration. Typically, that document can be found in your glove box along with the vehicle’s inspection and insurance information. While you’re at it, verify that the tags affixed to the license plate are current.

(See Also — How to Resolve a Private Seller Lien)

Chrysler 300.

4. Current insurance coverage. What you don’t want to do is to drive off the dealer’s lot without insurance. Typically, insurance is required if you borrow money to buy a car. Your lender will insist on coverage and certain inclusions at that. If you pay cash for a car or insurance is not a required purchase consideration, then you’re liable once you get behind the wheel of the car. Contact your insurer and arrange for coverage to commence the moment the deal is finalized.

5. Approved loan documentation. Unless the dealer is working out the loan details on your behalf, you need to do so at your end. Visit your bank or credit union to obtain loan information. At the same time, you can find a car loan elsewhere. Apply for a car loan and once approved, bring your loan documentation with you. If you’re obtaining financing through the dealer, then you’ll need to provide proof of income. Your dealer may also ask for your approval to obtain credit information and may contact your employer to verify employment information.

key lock 6. An extra set of keys. Car keys and fobs are not paperwork nor documentation! But if you are trading in a car, the dealer will request all keys be relinquished. How odd it may seem if you have only one key or fob to turn in? Key fobs especially are expensive to replace and the dealer may subtract $200 or more from your trade-in price if you have only one key fob available.

7. Cash on hand. Yes, money also does not count as paperwork or documentation. What it does do is cover those costs not part of your loan package. In fact, it is simply better to pay for tags or other miscellaneous fees separately, instead of rolling those costs into your car loan. Furthermore, if you have down payment funds to supply, then you’ll need cash too. Better yet, leave the money in your checking account and supply a debit card as this works same as cash and offers an automatic receipt.

Final Thoughts

If your deal involves a trade-in, make sure your personal items are removed from the car before you relinquish same.

To sum up, the better organized you are, the shorter your time at the dealership. Unless, of course, you enjoy sitting in waiting rooms watching daytime television drama while your spouse drives home to retrieve the extra keys, the loan documentation, or other paperwork.

Car Insurance for the Poor? Good Luck With That.

February 9, 2016 by admin 2 Comments

Renters may pay much more for their auto insurance coverage than do homeowners.

If you’re a low-income individual, more than likely you rent your home and don’t own it. Even if you’re a good driver, obtaining affordable car insurance is more costly for renters, than for homeowners, a fact recently uncovered by the Consumer Federation of America (CFA).

money tussle Indeed, in a press statement released on Monday as well as in an accompanying media teleconference, two CFA representatives — Bob Hunter, Director of Insurance and Doug Heller, Insurance Consultant — articulated just how much more the renting poor may pay for their auto insurance.

Higher Rates Even for Good Drivers

CFA research was conducted to determine what those differences might be, finding that renters pay 7 percent per year more on average than homeowners. That translates to $112 annually, not a small amount for people of limited means.

Auto insurance companies have long used home ownership as one criteria for determining rates. Other factors may include an individual’s credit score, zip code, education, occupation, the type of vehicle driven, and driving record. Thus, consumers not only pay more for their auto insurance because they rent, but likely far higher than that when other factors are taken into consideration by insurers. By the way, uninsured motorists comprise one of eight drivers in the US, according to the Insurance Information Institute.

Renters already carry a burden when it comes to their finances. According to 2013 Federal Reserve Bank data, the average annual income for renters in the US was $27,800 compared with $63,400 for homeowners.

“To raise people’s auto insurance premium because they can’t afford to buy their homes unfairly discriminates against lower-income drivers,” said J. Robert Hunter, CFA’s Insurance Director and the former Insurance Commissioner of Texas. “A good driver is a good driver whether she rents or owns her home. Insurance companies should not be allowed to target people based on homeownership status.”

Minimum Limits Liability Coverage

The CFA surveyed minimum limits liability coverage in 10 cities scattered across the United States and chose the seven largest insurers for the analysis. The seven insurers were: State Farm, Geico, Allstate, Progressive, Farmers, Liberty Mutual, and Nationwide.

To determine the insurance rate, the CFA utilized each company’s website to acquire two premiums in each city for a sample 30-year-old female motorist with a perfect driving record and a 2005 Honda Civic to insure. Both premium inquiries were identical, save for one category — whether she rented her home or owned it.

While most of the increases for the renter came in single digits, there were several outliers that raised rates by double digits, including by 47 percent for Liberty Mutual customers in Louisville, Kentucky. In effect, the sample owner of the Honda Civic would have been charged $768 per year more than had she owned her home.

Notably, Liberty Mutual was far more likely to charge renters more for their auto insurance than any other company, tacking on $307 per more per year on average. On the other hand, Geico did not use homeownership as a criteria for renters, thus rates for renters and homeowners were the same. Curiously, Allstate actually provided renters with lower insurance rates than for homeowners in Chicago, coming in at 11 percent lower.

The CFA provides a pair of tables showing the annual premium charges in total dollars and percentage by company in each of the 10 cities. The organization also checked rates in an eleventh city, Oakland, California, confirming that auto insurance rates for homeowners and renters were the same. That’s because California law prohibits insurers from setting rates based on home ownership, something the CFA would like to see the other states follow.

Advocating for the Poor

“Using customers’ homeownership status to determine premiums is another way in which insurance companies are piling on lower-income Americans,” said Douglas Heller, a consumer advocate who worked with CFA’s Michelle Styczynski to analyze the data in the study released today. “With all these different rating factors that have nothing to do with driving, auto insurers are charging good drivers hundreds and sometimes even thousands of dollars extra just for being poor.”

Hunter concluded that while people may have a choice whether to own or rent a home, they aren’t given that choice when it comes to purchasing car insurance. “State Insurance Commissioners and elected representatives should step in and stop this practice,” said Hunter.

The CFA representatives concluded by stating they plan to forward their findings to each state’s insurance commissioners and urge them to eliminate the gap between homeowners and renters.

Charts and date courtesy of the Consumer Federation of America (CFA).

Car Insurance Savings for the New Year

January 4, 2016 by admin 1 Comment

Practical ways to save on car insurance this year.

A new year provides a time for reflection on what has passed as well as what is on the horizon. This year, you may have some goals in mind, including earning more money, taking a vacation, perhaps learning something new. The new year should also be a time where you review your expenses, including what you pay for car insurance. To that end, we’ll take a look at some ways you trim your auto insurance bill.

A sports car like the Nissan GT-R is luscious,
but it also comes with a high car insurance premium.

1. It begins with the car you want to buy.

Car sales over the past few years have been strong, thanks to an improving economy and newly designed models offering safety, technology and comfort features that weren’t even around a decade ago. Pent up demand means people are buying, but it is the type of car you purchase that will impact your auto insurance costs significantly.

Sportier cars will cost you more to insure as well as will most luxury cars. You’ll pay more for a car with a higher horsepower engine and a manual transmission than you would for a car equipped with a smaller or less powerful engine and an automatic transmission. That doesn’t mean you can’t enjoy the car you want, but it does mean that your car insurance rates will reflect the higher performance, elevated price or both.

Smaller cars such as this Mini Cooper S Convertible
offer lower auto insurance premiums, but not always.

2. It continues with your credit score or insurance score.

Did you know that your credit score can impact your auto insurance premium? Since the beginning of the millennium, most insurance companies have incorporated your credit history into their matrices, when determining how much to charge drivers for insurance explains Kevin Lynch of The American College of Financial Services.

Said Lynch, “In addition to driving records and accident frequencies, credit was added to the mix, because empirical evidence showed the combination of these three factors could predict losses for insurance companies.” Insurance of any kind is based on risk assessment, thus these three factors are widely used by insurers to determine insurability.

You can obtain your credit scores for all three credit reporting bureaus by visiting MyFico.com. You can also ask your insurance company for your insurance score, which is based on your credit reports. An insurance score looks at some, but not all the factors pertaining to your credit history to assign you a score. Importantly, you should know that not all states allow the use of credit-based scores in determining premiums according to the National Association of Insurance Commissioners.

Audi Q3 — Models such as the BMW Q3 equipped with safety features
can lower your auto insurance rate.

See Also — It’s a Wrap: 2018 in Review

3. Savings are realized by taking all available discounts and other cost saving measures.

All auto insurance policies feature deductibles. Deductibles are your share of the cost of claims you make, such as for an accident or theft. If your deductible is $500 you’ll pay more for car insurance than for deductibles beginning at $1,000. You might find that your 10-year old car is no longer worth backing with collision coverage. Dropping same can save you money.

Lynch also notes that combining your insurance coverage can save you money. Thus, if you bundle your home and auto insurance policies under one insurer, you’ll receive a discount. Some insurers also include other coverage, such as boat, motorcycle or an RV.

Work with your insurer to find other discounts. Lynch notes that families with teenagers can save money if their son or daughter has good grades. But he also warns that consumers shouldn’t be so intent on saving money to forego coverage that may not be required in their area such as Uninsured and Underinsured Motorist Coverage. Explains Lynch, “…considering the number of uninsured drivers on the roads in the USA, can you really afford not to have the coverage?” Approximately 1 in 8 drivers is uninsured according to the Insurance Research Council (IRC).

Whether used for work or pleasure, this Chevrolet Silverado delivers.

Insurance Savings This Year

Just as you review your car insurance policy, make a point to check your other insurance coverage — health, dental, life, home, and the rest.

Your insurance agent is there for you. Just the same, use your review time to obtain quotes from competing insurers. You may find additional savings simply by switching providers.

Photos copyright Auto Trends Magazine.

7 Ways to Trim Car Insurance

June 4, 2015 by admin 2 Comments

You may not have reviewed your car insurance until the day that you took delivery of a new car or added a driver to your policy. Surprisingly, you find yourself faced with a minor crisis, one that you were wondering how you will meet the added cost. Indeed, it may have come in at a much higher rate than what you had anticipated.

Fortunately, there are sensible ways for you to trim your car insurance costs. We will review seven of them.

1. Perform comparison shopping. The best way to save on car insurance is to comparison shop. Auto insurance premiums can vary by hundreds of dollars amongst providers for the same coverage. So, obtain several quotes, then call your current insurer and ask for the company to match the lowest rate. If they can’t or won’t budge, then switch.

2. Know your credit rating. Your credit rating can impact your insurance premium. Insurers develop a credit-based insurance score and utilize that three-digit number to establish your rate. Your scores are ultimately based on your credit reports — if the information about you is wrong or negative, it can lower your score. Obtain copies of all three credit reports (i.e., Experian, TransUnion and Equifax) by visiting AnnualCreditReport.com. In fact, you are entitled to one free copy of each company’s report annually.

3. Find package discounts. You may be entitled to car insurance discounts, but you don’t even know it. For example, discounts are routinely dispensed to customers who have more than one vehicle insured. Additionally, you can obtain discounts by having the same insurer bundle your homeowner’s insurance policy. Moreover, insurers offer discounts to customers based on their age, military service, superior grades for students, and whether your car has certain types of safety and security equipment.

4. Take a driver training course. Drivers who have one or two tickets and have had that information reported to their insurance company pay a premium for their insurance. However, if you complete an authorized driver training program, your state may eliminate points, saving you money on your car insurance. For example, in Florida drivers may take an approved course no more than once per year and no more than five times in a lifetime. But that course may only be helpful if you have multiple non-criminal driving offenses within a short time, such as in 18 months. “In the event of things like an accident, there is no point in opting for driver school (unless the person already has a problem with points on his or her license) as the accident will be known to the insurer and will be surcharged, regardless of no offense being shown on the driver’s motor vehicle record. Also, if multiple offenses occurred in conjunction with the accident in question, there is no need to take school other than for points on the license,” explained Kristofer R. Kirchen, President, Advanced Insurance Managers, LLC in Tampa. In any case, it is at the discretion of your insurer what benefit is derived from a driver training program.

5. Review your accident reports. If you have been in an accident or have points on your record, that information may be working against you. Contact your state’s Department of Motor Vehicles (DMV) and review your driving record. In particular, outdated or wrong information should be identified and removed from your report and an updated copy offered to your insurance company.

6. Raise your deductibles. How much skin do you have in with your car insurance? In other words, how high are your deductibles? The higher the deductible, the greater your share of the insurance risk. When you select a higher deductible, your insurer will lower your rates. So, determine whether the higher deductible is a sufficient risk to offset your potential losses.

7. Claim your carpooling discount. Only a small number of people carpool, but if you regularly trade-off driving with at least one other person who drives hit or her own car, then your insurance company may lower your rate. In particular, your insurer may offer a carpool discount based on lower annual miles driven each year.

Saving Money on Car Insurance

Even if you haven’t added a driver or changed cars recently, a once annual review of your car insurance policy can save you money. With this in mind, examine your two recent policies. If you notice an increase that is greater than the cost of living, then contact your insurer.

And if you are planning to buy a new car or add a driver, contact your insurer for rate quote information first. As a result of that conversation, you may find yourself reconsidering your purchase or asking your insurer for a student discount.

See Also — How Are Insurance Scores Determined?