Category: Cars

Choosing the Best Auto Insurance

Choosing the Best Auto Insurance
Choosing the Best Auto Insurance

Driving a car comes with a fair share of responsibility. Getting behind the wheel of a car means that you are ready to face the challenges of the road and the financial burdens that come along with the process. One of the most important aspects of driving is discovering the best fit for auto insurance. There are many different options to explore. Local insurance, for example, can be an excellent idea to take to heart. By pursuing a more personalized experience, you’re likely to get results that you appreciate.

Finding the best auto insurance for your needs is all about having the most helpful information to make your decision. Consider these points and find a way to insure your car without having to go broke in the process.

The Credit Factor

Your credit can come and haunt you at several different points in your life. Whether looking to buy a car or insure it, you have to have your credit score in a certain range to be offered the most appealing options. You want to be able to spend less each month on your payments while still being covered in a practical way. With a poor credit score, this is not going to be possible. The best thing to do when you are in search of quality insurance is to work hard to improve your score.

Getting your credit rating into a position that will work to your advantage is not a small feat. You will need to dedicate time to this practice and focus on small, manageable ways to make a dent in your number. Hold out hope and keep striving towards a better tomorrow and you’ll find that you are able to qualify for a wider range of plans and policies.

Understand Options

Auto insurance can cover a lot of different areas. While it is a law that all motorists must have some form of auto insurance, it only mandates a very basic package. In truth, auto insurance is designed to cover many options as long as you remember to include these items in your policy. The best way for you to truly understand all of the different options in front of you is by sitting down with a local insurance agent and getting to the bottom of everything out there.

You will find that there is a policy that meets your exact needs out there. Instead of simply taking out an insurance plan because it helps you to meet the minimum requirement set forth by the government, you’ll find that it is far more useful to have a plan that actually reflects your specific concerns as a motorist.

Staying Safe

Good insurance is a wise safety precaution. Life has a way of throwing a curveball your way when you least expect it. To be prepared for any uncertainty that may develop, you’ll want to think over the various options out there for you. Figure out what your credit score is and take time to improve the number. Consider all of your options by meeting with a local agent. Find a plan that works for you and get ready to start your future as a more secure driver.

Choosing the Best Auto Insurance

The Perks of Commuting on Two Wheels

 

The Perks of Commuting on Two Wheels
The Perks of Commuting on Two Wheels

Does it scare you to hear that the average commuter in America spends a solid 38 hours yearly stuck in traffic and over 60 hours in some big cities? The same research shows that idling commuters released 56 billion pounds of carbon dioxide into the atmosphere in a year. Yikes. Most people have better things to do than sit on the highway fiddling with their radio or frantically urging their GPS to find alternate directions to the solid red line that indicates their usual route, but may feel stuck inside a routine that involves tons of time and frustration spent getting to and from work on a daily basis. Many people may also feel guilty about their contribution to the negative impact that commuting by car has on the environment, but may not be sure of potential ways to streamline their actions.

There are certainly benefits to commuting on four wheels, like shelter from the elements, not to mention the fact that many roads are specifically suited to cars, trucks, and SUVS over other vehicles. But two-wheeled commuting in its various forms holds a number of advantages that are swaying more and more people to leave their car in the garage and hop on a motorcycle or bicycle to head to work.

Read on to learn more about the perks of commuting on two wheels, and make sure you’re truly prepared to do so.

Motorcycles: A Shorter, More Engaging Commute

As one experienced motorcyclist outlines for Cruiser, many people may be incredulous about the feasibility of commuting by motorcycle, but it’s hard to deny the time-saving potential as well as the personal connection to each and every commute that may be lacking for those who sit in traffic in their car. Some motorcyclists undertake a practice called lane-splitting—now legal and regulated for safety in California—which involves passing between rows of idling vehicles by driving down the dividing lane line at a controlled speed. It’s not hard to imagine how much time this could save when practiced responsibly, not to mention the fact that motorcycles offer acceleration advantages that can translate to more efficient lane changes and traffic maneuvers in general.

Continue reading The Perks of Commuting on Two Wheels

Car Dealer Shenanigans

Car Dealer Shenanigans
Did you ever get taken advantage of by a Car Dealership?

OK we all know how most car dealerships try to scheme and frankly steal as much as possible from customers. Some do it with no shame, while others have no qualms in specific financial dealings with customers. I recently thought back to some of the interactions I’ve had with car dealerships and put together this interesting post. The point is to help people be more informed over how Car Dealer Shenanigans can eventually damage your future cash flow by persuading you to take on more than your wallet can chew.   Continue reading Car Dealer Shenanigans

The Top 10 Car Rules

The top 10 car rules
Nice Challenger Buddy!

 

The Basics of Financial Management: The Top 10 Car Rules

One of the biggest money drains on a family’s budget; car costs. The old loyal car is the machine that makes your life that much simpler. It can take you from point A to point B in a flash, but at what costs will you pay for that convenience. If you do not know how to handle this money pit based on smart money management then you have arrived at the right time and right place. This advice is going to leave you wondering if having a car is worth it because it takes such a big chunk out of the budget. For a quick example add up the money you spend in a month to maintain the nice old dune boogie and write it down. All of the categories below should not add up to more than 15-20% of total monthly income. If when you add it you are at 30% when compared to income some changes must take place because it is not financially smart.

I have heard a few horrid stories of 20 something year olds who drive a car with a 500 dollar loan payment, 250 insurance, 200 in gas, 150 in cleaning costs, etc. That is $1100 hundred bucks going to waste month after month to drive in style. This young person should be earning $7 grand a month in order to effectively afford those high car expenses I just mentioned. (7,000 x 15% is 1050)

Just imagine if you invested that $1100 a month for a year, it adds up to $13 thousand a year. That is a sizeable emergency fund or initial investment amount that can grow year after year. Let’s assume that person drives 1250 miles per month or 15K annual miles. The cost per mile is .88 cents per mile. (This is not even including additional service fees / depreciation) If you add up the total costs it will be closer to 1.10 cents per mile driven. (I don’t know about you, but I don’t have an extra 15-20 thousand lying around to throw away on a piece of machinery)

Car Expenses Categories:

Car Note (Loan)

Car Insurance

Gas

Maintenance

Accessories

Cleaning

 

The Top 10 Car Rules:

Do not purchase a car that is more than 20% your annual income

Do not get a gas guzzler unless you can easily afford the gas bill

Do not let all the expenses for the car including maintenance exceed 15% monthly income.

Do not get a car to impress others (Getting a SUV that is 100% X annual income-not smart)

Do not get a New Car unless you are willing to lose 5 grand + in depreciation

Do not get a navigation package (cell phones can give you the same service for free)

Do not get car dealer financing or a Lease (Pay for it all in cash is best)

Get a used car if you are still building Wealth (Under the Radar Millionaires always buy used)

Never go to Car Dealer’s for service (Find a reliable/trusted Mechanic)

If you have a car loan, pay extra every month to eliminate the debt

Ok if you follow the car rules above and never break them, I believe you will be better off than 90% of the drivers on the road. Why you ask, because people are not making the right choices when it comes to a depreciating thing like a car. They overextend themselves and completely erode their monthly cash flow by breaking all the rules above. For example why pay 2500 extra to get a navigation system when you can easily set up the smart phone or standalone gps to get you where you need to go for free.

That kid that just graduated college wants to show off and get a BMW or Mercedes that equals 100% of his income. At that rate it will take him 7-8 years to pay it off plus a ton of interest. The time will come when you can truly afford a luxury car, and that time will happen when you do two things. Increase income and or save the complete amount in a car fund to not take out any car loans. The rules are made to protect you and help you grow your knowledge regarding financial management. If you follow these car rules you will have the ability to grow your money and not hurt your chances at retiring early. By taking all the extra money you are now saving due to smart choices you can invest it and watch it grow.

Comment if you have any suggestions to add to the top 10 car rules?

PS: Car Leasing is the worse car rule you can ever break!

Rich Uncle EL

Luxury Cars on the Cheap

Luxury Cars on the Cheap

Lexus Hybrid Models (CTH or ESH only)

Audi A4 or A6 (Smaller Engine only)

BMW 1 or 3 (V-4 version only, with no extras)

Infinity G

Vintage Muscle Cars (Not mint, but close to it)

Acura

These are the cars that if you are out of debt, have a great income, and currently exceed retirement estimates for your age that you might want to get to live a little in the lap of luxury. These are all luxury brands but the cool thing is these models are not too expensive.

All the vehicles I mentioned above will cost you less than 50K for new versions and around 25K for used versions. I am not one to recommend splurging on cars given this is a financially savvy blog, but if you finally achieved a new status with personal finance then I do not see anything wrong with getting any of these models if your income is consistent and above average. One Caveat I recommend is not to do it while adding debt. The right way to buy cars is to save up as much as possible and buy something you can afford.

They all can get you from point A to B, while saving you some gas compared to other equally priced luxury cars. The only exception to the list is the vintage muscle cars as most will be V-8 engines with horrible fuel economy, but boy will you look cool riding around in one of those puppies. Some auction sellers have them at great prices.

Obviously the Lexus Hybrids will get you great fuel efficiency now but later the battery issues might be a problem. In comparison the German cars which include Audi and BMW, their engineers are making great strides with diesel engine options that could one day trump the hybrids class leading MPG records.

First thing to consider is to only buy these if the purchase price consists of less than 25%-50% your annual income. Percentages must play a big role in life and if you learn to apply them to cars you will be well off and be very financially efficient.   Do not be like the normal college graduate who goes out and buys a car that equals 75% of their annual income. In addition to this error most of those graduates just landed the job, and thus do not have at least 2 years of job security. This can lead to major issues with finances early on in life. Buying a car that equals 50% or more off annual income is not smart personal finance.

Any other cars not on this list are either priced too high, offer horrible fuel efficiency, have reliability issues, or have extremely expensive 5 year cost to own stats.

 

Purchase Price = 25K

Annual Income must = 100K or greater

Equals 25% price to income ratio

Purchase price = 25K

Annual income = 50K

Equals 50% price to income ratio

Can you now see the difference in the percentages? One allows you less risk than the other.

Comment if you agree with the luxury cars on the cheap list. Also if you agree with the purchase price to income ratio I recommend above?

Rich Uncle EL

 

Pic credited to Lexus Co..

Gas Prices by Country

 Gas prices by country

Did you know that gas prices by country all over the world range between $.06 cents to $10 dollars a gallon? All the prices below were found in a recent Car & Driver magazine were the countries price per gas in their currency was converted to dollar equivalents. I know what you’re thinking? What country has gas at .6 cents a gallon? Imagine if you lived in that country, would your pay be comparable to the US, and if so why is gas there so much less than gas in the U.S.

Continue reading Gas Prices by Country