Automobile Insurance 101

By: MJ

Now that you know the obvious traps from the past articles, it’s time to know how to avoid them.

a) Keep your eye firmly on the price. There is absolutely no wisdom in discussing monthly payments until you have negotiated the lowest possible total price first.

b) Consider leasing cars. Leasing is a great alternative for those who normally change cars every few years. Customers pay the amount of value a vehicle loses over the time that he/she is using it. The only thing to consider is that you should be a great caretaker of the car and that you should drive within the agreed-upon number of miles per year. Penalties may be applied for damages to the car.

By: MJ

New car buyers are increasingly wanting to buy more luxurious and expensive cars. In order to do so without disrupting the “constancy” in their minds, they extend the duration of the loans to finance their purchase of the vehicle. What constancy is this in their heads? If they buy a cheaper car, let’s say they have to pay $100 a month for 2 years. This is just an example. Now, if they extended the time period, technically, they could still pay $100 a month. BUT, they get to have a better car. It’s the same thing in their shallow minds anyway, $100 a month. The fact that they have to pay for 5 years, an additional of 3 years to the one before doesn’t register in their heads.

by: Djai Tanji

For those who drive without any auto insurance, you better watch out for the Insurance Info and Enforcement System. Basically, the Insurance Information and Enforcement System is a system used specifically in United States by a number of “Department of Motor Vehicles” agencies in tracking people down who might be driving without any automobile insurance. The system was created mostly because many vehicle owners try to deceit the DMV by making them think that they are have a car insurance by registering their car with a policy and then terminating it right after just to keep the plates. There are several jurisdictions that prohibit no-insurance driving and this system is quite useful in keeping track of applications or cancellations of policies.

by: Djai Tanji

Normally, liability coverage as well as comprehensive policies (“full coverage”) extend when you rent a car, although this ought to be confirmed beforehand. Among other factors, full coverage premiums are based on the value or worth of the insured’s vehicle. However, this coverage cannot be applied to rental cars because the insurance company does not want to assume liability for a claim larger than the value of the insured’s vehicle especially that a rental car may even be worth more than the value of the insured’s vehicle. Most of the rental car companies present insurance to cover damage to the rental vehicle.

By: MJ

How exactly do the sellers pull of this kind of stunt while pulling away with clean fingers? This has partly something to do with the buyers as well. For so long, the mentality of “more for the same” has plagued the minds buyers. After all, who wouldn’t be attracted to that kind of offer? Instead however, they fail to remind themselves that the “same” they are instilling in their own minds is just for a specific time frame only and not the whole duration. Confusing? How about a more specific explanation then? Let’s take into account the present situation, buying of cars.

By: MJ

For the first time, the buyers are outwitting the sellers. Or are they? In a self-convincing attempt that they can have better luxury by still paying the same amount every month, buyers are becoming more and more emboldened by this twisted philosophy when in reality, they are actually dragging themselves down even further. This illusion of undisturbed constancy has been cunningly placed unto the minds of buyers by the sellers but the real genius behind it is the fact that the buyers themselves placed the illusion unto their own heads while the sellers’ hands are clean and have not done a single thing.

By: MJ

The race is not over with the model of the car. Insurance companies also take into account a lot of data such as your driving record and your place of residence when computing your auto insurance premium. Besides that, age, gender, credit history, and miles driven per year are also taken into account.

To break it down even simpler, if you really wish to have cheaper auto insurance, go for those less flashy vehicles. Boring old Sedans , slow vehicles, and vehicles that don’t have a lot of extra parts that could be damaged in a crash often have lower insurance fees.

by: Djai Tanji

Here is the list of basis of premium charges:

•GENDER – men have a potentially higher involvement in vehicle accidents because they have higher average of miles driven per year than women.
•AGE – teenagers who have no record in driving will have higher insurance premiums. At the age of 25, insurance premiums commonly is more likely to become lower. Senior drivers are commonly entitled for retirement discounts reflecting lower average miles driven by seniors.
•DISTANCE – not all plans differentiate regarding how much the car is used but the methods of differentiation include Reasonable Estimation, Odometer-bases Systems, GPS-based System, and OBDII-based system.

By: MJ

For small pick-ups, a Dodge Dakota Quad Cab was deemed to have the cheapest insurance offer while a Mazda B plus 4WD led the other unfortunate extreme.

Honda and Mitsubishi battled it out with Honda emerging the winner as having the cheapest insurance in the Small Four-door category. Honda Civic emerged with the cheapest while Mitsubishi’s Lancer Evolution 4WD emerged the most expensive.

A Subaru Outback 4WD had the cheapest insurance in the Midsize Four-door category while a Nissan Maxima led the other end.

Finally, for the big guns, Land Rover LR3 dominated the cheapest insurance for Large Luxury SUVs while Porsche Cayenne dominated the other end.

By: MJ

In the small sports car category, Pontiac Solstice lead the car having the least expensive insurances while Honda’s S200 lead the other end of the stick.

In the midsize Luxury SUV, there was no doubt that Volvo XC90 and Cadillac SRX lead the two extremes with the first one having the cheapest insurance.

Small SUVs had Jeep Wrangler LWB 2-door leading the cheapest insurance for cars while Mitsubishi’s Outlander headed the other direction.

BMW dominated both extremes for midsize luxury automobiles. The BMW 3 Series Wagon lead the cheaper end while BMW M3 lead the other end, the most expensive one.