Car Loan / Financing For Your Vehicle

There are still many young executives who do not have the means of purchasing a new car. They have to content with buying a second hand car. They usually shop for financing their vehicle with a bank or some finance companies on certain terms and conditions.

There are many finance companies available in the market offering competitive rate of interest for the car loan. Some usually offer a low interest rate in the beginning. However, there will always be a penalty clause that stipulates that if the amount is not paid by a certain date then a penalty will be imposed. One has to be very careful before signing of any of such document.

There are some finance companies which even offers zero percent interest on used car loans . There is a catch in this, however. Remember, no company will do business at a loss. So be careful in such dealings. Do not end up in a hot fix where you will end up with more issues over trying to save a few bucks.

What is Covered in a Basic Car Insurance Policy

There are basically 6 types of car insurance coverage :

Bodily Injury Liability

This coverage applies to injuries that you, the designated driver or the policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.

It is important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Do consider purchasing an auto insurance policy that is more than the state-required minimum to protect assets such as your home and savings.

Medical Payments or Personal Injury Protection (PIP)

This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's vehicle. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

Property Damage Liability

This car insurance coverage pays for damage that you (or someone driving the car with your permission) may cause to someone else's property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, fences, buildings or other structural property that your car hit.

Collision

This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over.

It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000, and the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you're not at fault, your auto insurance company may try to recover the amount they paid you from the other driver’s car insurance company.

If auto insurance company is successful in recovering the amount, you'll also be reimbursed for the deductible as well.

Comprehensive

This car insurance coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as falling objects, fire, missiles, explosion, earthquake, vandalism, windstorm, hail, flood, riot, or contact with animals such as birds etc.

Comprehensive auto insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium.

Comprehensive car insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.

Uninsured and Underinsured Motorist Coverage

This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.

Underinsured motorist coverage comes into play when an at-fault driver has insufficient auto insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.

Check out which car insurance policy suits you the best and your budget and be equipped with one that suits your lifestyle. It is best that you get adequately insured to protect your interests.

Other Auto Insurance Considerations

These car insurance policy considerations may seem minor, but being aware of them may save you time and money.

When Moving From One State to Another

If a job change or circumstance requires you to move from one state to another, you'll likely have to revise your auto insurance.

Forget the notion that you are going to start over in a new spot with a new car insurance company and leave behind a troubled driving record. In this era, any company will likely turn up your record from the Department of Motor Vehicles in your former state.

Insurance Add-Ons

Your auto insurance agent or direct-sales company is likely to offer other small add-ons. Rental-car reimbursement may be worth it if you have just one vehicle. If your family has more than one, you may be able to skip paying for this car insurance coverage. Likewise, roadside-towing insurance is unnecessary if you already belong to the American Automobile Association or some other auto club.

Insurance for Leased Cars

If you are leasing a car or plan to lease, be sure you have gap insurance. This covers you if your car is totaled and the leasing company demands more of a payback than what your auto insurer is willing to pay. The best time to get such insurance, by far, is when you initially lease the car. Most major leasing companies and automakers finance subsidiaries, such as General Motors Acceptance Corp., offer such car insurance as part of their leases.

No-Fault Insurance

Moving from a conventional insurance state to one with no-fault insurance could mean sizable changes in your policy. When adopted in the early 1970s, no-fault laws were intended to sharply reduce the number of lawsuits, and thus reduce auto insurance premiums. It hasn't worked out as intended. Many no-fault states have car insurance rates just as high as conventional states' rates.

States with no-fault insurance include the following :

* Florida
* New Jersey
* New York
* North Dakota
* Pennsylvania
* Utah
* Kentucky
* Massachusetts
* Michigan
* Hawaii
* Kansas
* Minnesota

With no-fault policies, damages aren't collected from the at-fault driver's auto insurance company. So each motorist must carry personal injury protection to pay individual medical expenses and lost wages. Even if an accident involved an out-of-state driver from a conventional insurance state, the PIP provision in the home-state motorist's policy probably would kick in to cover any injuries.

Other Considerations

Here are some factors you may not have considered that could affect what you pay for car insurance.

How can my spouse, significant other or business partner affect my auto insurance rates ?
If someone listed as a regular or occasional driver on your car insurance policy has a poor driving record, it will push up premiums. Sometimes, just having a roommate with a poor record who turns up as an address match in the computer can push your auto insurance rates up even if you never loan out your car.

Is it me or my car that's insured ?
You carry your car insurance policy with you when, for example, you rent cars — provided your coverage includes collision. If so, refuse the offer from the rental company of the expensive add-on collision coverage.

Does the auto insurance company pay me directly if I file a claim ?
That really depends on the company and the claim. If your car needs body work, the insurer might pay the body shop directly — especially if the company has a preferred network of shops. If your car is totaled, you are more likely to get a check directly.

What if a friend borrows my car and gets into an accident ?
If he or she isn't listed on your car insurance policy and gets into an accident with your car, your insurance carrier may consider this so-called permissive use and cover the damage. However, you should ask your auto insurance agent about this before lending someone your car keys.

If you come across car insurance considerations and would like to get it noted, please feel free to drop a comment note.

Auto Insurance Checklist 2009

Looking for a comprehensive auto insurance for the coming year ? Below is a list that you may find useful when hunting for a good car insurance deal. Now is especially a good time as during the Nov/Dec period where insurance premiums tend to be very competitive as insurance agents want to close more sales before the end of the year. Furthermore, many people will tend to have received their bonus package by year end and will have more money to spend.

Now, the price you pay for your car insurance varies depending on your driving record, the type of car you have and the insurance company you buy your auto insurance policy from.

Here is a list of things you may like to do to save you some money.

1. Look Around and Request for Car Insurance Quotes

Get at least three to five auto insurance quotes. You can call companies directly or access information on the Internet with the aid of Google or Yahoo search. Or simply use your local Yellow Pages and you will easily be able to find the contact details of quite a number of reputable car insurance companies and their agents.

In any case, do get quotes from different types of insurance companies. Some sell through their own agents whilst others sell through independent agents who offer policies from several insurance companies. Other companies, on the hand, sell directly to consumers over the phone or via the Internet. The price varies depending on the sales method used.

However, it is advisable not to shop soley by price alone. You want a reputable company that answers your questions and handles car insurance claims fairly and efficiently, on top of being reliable.

Other sources for finding the right kind of insurance company include : word of mouth from family, friends and associates, as well as your state insurance department, where you can find consumer complaint ratios by company.

2. Compare Auto Insurance Costs Before You Purchase a Vehicle

Your insurance premium is based in part on the vehicle's listed price, the cost to repair it, its overall safety record and the likelihood of theft.

Many insurers offer discounts for features that reduce the risk of injuries or theft, such as air bags, daytime running lights, anti-theft devices, anti-lock brakes etc. Note that expensive cars that are favourite targets for thieves cost more to insure.

3. Buy your Auto and Homeowners Insurance Coverage from the Same Insurer

Many insurers will give you a discount if you buy two or more types of insurance from them.

Also, you may get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce insurance premiums for long-time customers.

Make sure you do your maths and shop around carefully; you may still be able to save more money buying from a different insurance company even with the multi-policy discount.

4. Ask for a Higher Deductable

Your deductible is the amount of money you pay out-of-pocket before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially.

For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage premium by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more.

However, keep in mind that you'll need to have the amount of the deductible on hand should something happen to your vehicle.

5. Reduce Auto Insurance Coverage in Older Cars

Consider dropping collision and/or comprehensive coverage on older cars.

It may not be cost-effective to continue insuring cars worth less than 10 times the amount you would pay for coverage. Any car insurance claim payment you receive would not substantially exceed your premiums minus the deductible. Claims occur on average only once every 11 or 12 years.

Auto insurance dealers and banks can tell you the worth of a car.

6. Inquire about Group Insurance when looking for Car Insurance Policies

You may be eligible to get insurance through a group plan from your employer, or through professional, business and alumni groups or other associations. Group plans often provide substantial discounts on insurance.

Ask your employer, or any groups or clubs of which you are a member, about this option.

7. Low-Mileage Discounts On Your Auto Insurance

Some companies offer discounts to motorists who drive a lower than average number of miles per year.

Low mileage discounts can also apply to drivers who car-pool to work.

8. Maintain Good Credit Records May Lower Your Car Insurance Premium

Your credit rating may affect what you pay for your auto insurance, so monitor it carefully.

You can get this information directly from the three major credit-rating agencies (Trans Union, Equifax and Experian). There are also various Web sites that allow you to check your credit rating and provide tips on how to improve your score.

9. Seek out Safe Driver Discounts when Applying for Car Insurance

Most insurance companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years.

You may also qualify for a cut if you have recently taken a defensive driving course, if you are over 50 and retired, or if there is a young driver on the policy who is a good student, has taken a drivers education course or is away at a college, generally at least 100 miles away.

When you comparison shop, be sure to inquire about discounts for the following (availability will vary according to the state and company) :

• Defensive driving course
• No accidents in 3 years
• No moving violations in 3 years
• $500 deductible
• $1,000 deductible
• Student drivers with good grades
• College students away from home
• Daytime running lights
• Low annual mileage
• Drivers over 50 to 55 years of age
• Driver training course
• Air bags
• Anti-lock brakes
• Anti-theft device
• More than one car insured with the same company
• Auto and homeowners coverage with the same company
• Customer with insurance company for a long time
  

Do remember that the key to savings is not the discounts but the final price. A company that offers few discounts may still have a lower overall price. Getting a car insurance is compulsory before you can drive on the road. Do your maths carefully and work out the best and most affordable auto insurance plan that suits your needs and comfort, complete with a good customer service support.

To conclude : The bottomline is to drive carefully and safely and not to put your life, your passengers and your vehicle at any risk.