7 Back to School Safety Tips for the Whole Family

As the summer heat begins to fade, children are enjoying their final days of free play and parents are preparing to send the kiddos off to school. As the new school year approaches, it’s important to prepare your family for back to school safety.

Apartment dwellers with school-aged children can help prevent accidents by teaching and adhering to these safety tips.

1. Drive with extreme caution

kids walking to schoolkids walking to school

When school starts again, more children will be on the roads in the morning and afternoon hours. It’s always important to be focused when driving, but during the school season, it’s especially important to be alert and aware of your surroundings.

Small children will be on the roads and you may not see them in your blind spots. Recognize those children on the road, err on the side of caution and don’t assume kids see your car and know your intentions. It’s best to drive slowly and cautiously to keep kids safe.

2. Adhere to school zone lights

school zoneschool zone

In designated school zones, you’ll see the yellow flashing lights signaling for drivers to slow to 20 mph. Any time you see the school zone lights on, you must slow down to ensure the safety of children walking to school.

Children may not be observing traffic, and it’s up to the adults to follow school zone speeds to help keep kids safe. Even if you don’t see children in the school zone, it’s better to play it safe to ensure back-to-school safety.

3. Stop behind the school bus

cars behind school buscars behind school bus

School buses are one of the main modes of transportation for kids. When the stop sign is activated on a school bus, never try and pass the bus on either side.

Children will be exiting the school bus and crossing the street. Passing a school bus when the stop sign is on is not only dangerous, it’s illegal.

4. Follow the school’s pick up and drop off policy

dropping off at schooldropping off at school

Each school will have a different system in place to help parents safely pick up and drop off their children.

Before the school year starts, talk to your school and get a thorough understanding of the policy. This will help protect your child and other children during pick up and drop off times of the day.

5. Teach your kids how they’ll get to and from school

kids on bikekids on bike

Not all kids are driven to school, so there are some rules to teach your children about walking and biking to school safely. First, you’ll want to ensure they know how to get to school from your apartment. Second, you’ll want to make sure they know which direction to walk back, which building they live in, what apartment number and floor level.

Apartment complexes can be vast and buildings can look similar to a child. To keep them safe, make sure they know how to get to and from school on their own. Also, if they’re walking to school without parental supervision, you may want to consider a GPS tracker for kids. This will loop you in on their whereabouts so you can confirm that they got to school safely each day.

In the weeks leading up to the first day of school, practice walking, biking or scootering to school so you can teach your kids the safest route to take, how to use the sidewalk and crosswalks and where to park their bikes or scooters when they get to school.

If your children will be biking or scootering to school, teach them to always wear a helmet. Once they get to school, ask the principal where the kids should park their bikes or scooters during the day and when and where they can pick them up after school.

6. Stop, look and listen

crossing guardcrossing guard

This may be the most fundamental back to school safety lesson you teach your children. As simple as it is, it’s one of the most important lessons a child can learn. Anytime they’re about to cross a street, make sure they follow the three-step plan:

  1. Stop at the end of the sidewalk
  2. Look both ways to make sure there are no cars coming from either direction.
  3. Listen for cars even if you cannot see them.

7. Teach school bus etiquette

kids getting on school buskids getting on school bus

As the school season kicks off, kids are excited to ride the school bus with their friends. While this is a fun time of life for children, it’s important they know the proper school bus etiquette and rules to promote back to school safety.

Before they start school, walk with your children to the bus stop so they know the safest route. Next, let them know that they need to stay on the curb until the school bus pulls over. When the doors open, the school bus driver will tell the kids when it’s safe to hop on board.

Teach your kids that they should never run to the school, but that the school bus will pull over for them and let them know when it’s safe to get on. When they get off the bus, let them know that they need to always look both ways before crossing the street.

Better safe than sorry

The beginning of the school year is often an exciting and, sometimes, scary time. Ease some of the nerves by teaching your children what’s expected of them and what could happen if they don’t follow the rules.

And you should follow these guidelines to promote back to school safety in your apartment complex, neighborhood and community. Remember to share the road and keep your eyes open for kids once the school season begins.

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Source: apartmentguide.com

Why This Could Be a Great Year to Buy a Used Car

America’s new love affair with auto leasing offers some unexpected good news to drivers looking for used car bargains. A coming glut of end-of-lease cars will dump millions of used cars on the market in the next year or two, almost certainly lowering prices on relatively low-mileage, late-model cars with most modern amenities.

Leasing exploded in popularity during the early part of this decade, hitting an all-time record in 2014 (since repeatedly eclipsed: You can read the full story here). Two and three-year leases signed then will begin to come on the market this year, adding an estimated 800,000 extra used cars into the market, according to a report by the National Automotive Dealers Association. It conservatively estimates that used car prices will actually fall an average of 2.5% each year for the next three years.

Why Drivers Should Care

“The expanding pool of used vehicle supply, spearheaded by off-lease growth, will gradually compress used vehicle prices as time passes,” the report says. “Under this assumption, prices would be at their lowest point since 2010.”

That’s good news for all drivers, as prices for both new and used cars have risen steadily in recent years, fueled by record auto sales across the board. During the recession, drivers held on to cars longer, reducing the supply of used cars, helping push prices up 18% from 2007 to 2014, the report says.

Edmunds.com found that average used car prices set a record last year, reaching $18,600.

Pushed largely by the influx of millions of end-of-lease cars, dealers have aggressively expanded their so-called certified pre-owned sales efforts. Consumers are drawn to CPO sales because these used cars come with new-car-like warranties and benefits. CPO sales also hit a record last year, Edmunds said, and have climbed 55% in the past five years.

“The key factor driving all of the trends in used car sales today is the popularity of leasing, which is bringing younger and higher quality used cars back to the market,” Jessica Caldwell, Edmunds.com Director of Industry Analysis, said in a press release. “We’re truly in the midst of a Golden Age for CPO and near-new used cars. And with a record number of lease terminations expected in 2016, for the foreseeable future there certainly will be no shortage of supply to meet the growing demand for used cars.”

An eye-popping 54% of used vehicles sold last year were three years old or younger, Edmunds says, and the average age of used vehicles sold edged down to 4.4 years in 2015 from 4.6 years in 2014.

All those new-ish end-of-lease vehicles becoming available will eventually become a “big problem” for car dealers, Caldwell recently told AutomotiveNews.com. But a problem for dealers could be a boon for you. So what should you do?

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Used-Car Shopping 101

If shopping for a new car, investigate certified, pre-owned offers, too. Dealers know they have a big pile of leases ending within the next 12-24 months, so they will be willing to bargain.

Also, in a bit of a reversal, don’t be afraid to shop for a used car during the busy months. While it’s generally easier to get a deal during winter when sales are slow, end-of-lease cars will pile up during spring and summer, when sales picked up two and three years ago. You could benefit from showing up during a busy week of lease returns.

Finally, not all used car categories will be impacted the same, so if you are looking for a deal, pick the right car.

“The supply effect on used prices will be most pronounced on subcompact cars, compact cars, compact utilities and midsize utilities—both non-luxury and luxury. Utility and truck prices will be cushioned somewhat from supply’s blow by low gas prices and stronger consumer demand, while car segments will enjoy no such buffer,” the NADA report says.

Remember, getting a good deal on an auto loan often hinges on your credit score — generally, the higher the score, the lower the interest rate. You can see where you currently stand by viewing your credit scores for free each month on Credit.com. And, if your credit is in rough shape, you can improve your score by disputing any errors on your credit report, identifying your credit score killers and creating a game plan to address them.

Get matched with a personal loan that’s right for you today.

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Comprehensive and Collision Insurance

  • Car Insurance

In most states, you are required to have liability insurance, which covers you for claims made by the other driver. You may also be required to purchase personal injury protection insurance and uninsured/underinsured motorist coverage.

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These are some great coverage options to have even when they are not mandatory, but they’re not the only ones. You can also add collision coverage and comprehensive coverage to your insurance policy. Although they are not required in any state, adding these options to your car insurance policy will cover you for more eventualities and ensure you’re not left with major out-of-pocket expenses following an accident.

In this guide, we’ll see what these two options cover, how much they cost in every state, and how you can get full coverage car insurance without paying thousands of dollars a year.

What is Collision Insurance?

While liability insurance pays for the damage done to other vehicles, collision insurance covers the damage done to yours. It will also cover you for all of the following:

  • Hitting a Tree
  • Hitting a Telephone Pole
  • A Flip or Rollover
  • Running a Curb
  • Hitting a Pothole
  • ​Backing into a Wall
  • Backing into Another Car
  • Hitting a Building

As with all types of insurance, collision coverage comes with a deductible. The deductible amount can range from a few hundred dollars to $1,000, on average. The higher it is, the lower the premiums will be.

Because of this deductible, and the increased premiums that can result from an insurance claim, you may want to think twice about making a claim following a ding or scratch.

By all means, claim if you hit another vehicle and do serious damage. But if you scrape the building when doing through a drive-thru or suffer some other minor damage that doesn’t involve another car, it may be cheaper in the long-run if you just pay the repair costs yourself.

What is Comprehensive Insurance?

Comprehensive car insurance covers you for many things not covered by collision insurance, including:

  • Vandalism
  • Theft
  • Glass damage
  • Damage from floods, hailstorms, and winds
  • Civil disturbances
  • Fire
  • Falling objects
  • Natural disasters
  • Animal collisions

Surprisingly, animal collisions are covered by comprehensive coverage and not collision coverage. The irony here, however, is that collision insurance will cover you if you swerve to avoid the animal but hit a wall. If you break quickly, brace for impact, and don’t swerve, as many experts recommend, you’ll only be covered if you have comprehensive auto insurance coverage.

State by State Cost of Collision Insurance and Comprehensive Insurance

The national average for collision insurance is between $500 and $600 while comprehensive insurance falls somewhere between $150 and $250. But depending on where you live, you could find yourself paying a lot less and even a lot more.

Car insurance premiums differ considerably from state to state, as underwriters consider everything from the number of car accidents and thefts in your area to the number of cars on the road and the likelihood of floods, storms, and animal collisions.

Take a look at the state average below to better understand how much these two coverage options cost in your area.

  • Alabama: Average Cost of Comprehensive Coverage = $160; Average Cost of Collision Coverage = $570.
  • Alaska: Average Cost of Comprehensive Coverage = $140; Average Cost of Collision Coverage = $630.
  • Arizona: Average Cost of Comprehensive Coverage = $160; Average Cost of Collision Coverage = $500.
  • Arkansas: Average Cost of Comprehensive Coverage = $250; Average Cost of Collision Coverage = $580.
  • California: Average Cost of Comprehensive Coverage = $150; Average Cost of Collision Coverage = $1,000.
  • Colorado: Average Cost of Comprehensive Coverage = $240; Average Cost of Collision Coverage = $510.
  • Connecticut: Average Cost of Comprehensive Coverage = $120; Average Cost of Collision Coverage = $690.
  • D.C.: Average Cost of Comprehensive Coverage = $170; Average Cost of Collision Coverage = $650.
  • Delaware: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $530.
  • Florida: Average Cost of Comprehensive Coverage = $160; Average Cost of Collision Coverage = $490.
  • Georgia: Average Cost of Comprehensive Coverage = $160; Average Cost of Collision Coverage = $550.
  • Hawaii: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $560.
  • Idaho: Average Cost of Comprehensive Coverage = $140; Average Cost of Collision Coverage = $430.
  • Illinois: Average Cost of Comprehensive Coverage = $120; Average Cost of Collision Coverage = $480.
  • Indiana: Average Cost of Comprehensive Coverage = $150; Average Cost of Collision Coverage = $520.
  • Iowa: Average Cost of Comprehensive Coverage = $250; Average Cost of Collision Coverage = $390.
  • Kansas: Average Cost of Comprehensive Coverage = $430; Average Cost of Collision Coverage = $470.
  • Kentucky: Average Cost of Comprehensive Coverage = $290; Average Cost of Collision Coverage = $570.
  • Louisiana: Average Cost of Comprehensive Coverage = $250; Average Cost of Collision Coverage = $670.
  • Maine: Average Cost of Comprehensive Coverage = $80; Average Cost of Collision Coverage = $410.
  • Maryland: Average Cost of Comprehensive Coverage = $140; Average Cost of Collision Coverage = $580.
  • Massachusetts: Average Cost of Comprehensive Coverage = $170; Average Cost of Collision Coverage = $555.
  • Michigan: Average Cost of Comprehensive Coverage = $250; Average Cost of Collision Coverage = $920.
  • Minnesota: Average Cost of Comprehensive Coverage = $230; Average Cost of Collision Coverage = $390.
  • Mississippi: Average Cost of Comprehensive Coverage = $220; Average Cost of Collision Coverage = $490.
  • Missouri: Average Cost of Comprehensive Coverage = $300; Average Cost of Collision Coverage = $480.
  • Montana: Average Cost of Comprehensive Coverage = $330; Average Cost of Collision Coverage = $540.
  • Nebraska: Average Cost of Comprehensive Coverage = $350; Average Cost of Collision Coverage = $410.
  • Nevada: Average Cost of Comprehensive Coverage = $150; Average Cost of Collision Coverage = $600.
  • New Hampshire: Average Cost of Comprehensive Coverage = $90; Average Cost of Collision Coverage = $480.
  • New Jersey: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $450.
  • New Mexico: Average Cost of Comprehensive Coverage = $200; Average Cost of Collision Coverage = $460.
  • New York: Average Cost of Comprehensive Coverage = $140; Average Cost of Collision Coverage = $700.
  • North Carolina: Average Cost of Comprehensive Coverage = $120; Average Cost of Collision Coverage = $415.
  • North Dakota: Average Cost of Comprehensive Coverage = $340; Average Cost of Collision Coverage = $430.
  • Ohio: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $400.
  • Oklahoma: Average Cost of Comprehensive Coverage = $380; Average Cost of Collision Coverage = $540.
  • Oregon: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $440.
  • Pennsylvania: Average Cost of Comprehensive Coverage = $150; Average Cost of Collision Coverage = $620.
  • Rhode Island: Average Cost of Comprehensive Coverage = $120; Average Cost of Collision Coverage = $730.
  • South Carolina: Average Cost of Comprehensive Coverage = $310; Average Cost of Collision Coverage = $610.
  • South Dakota: Average Cost of Comprehensive Coverage = $460; Average Cost of Collision Coverage = $420.
  • Tennessee: Average Cost of Comprehensive Coverage = $140; Average Cost of Collision Coverage = $505.
  • Texas: Average Cost of Comprehensive Coverage = $230; Average Cost of Collision Coverage = $530.
  • Utah: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $420.
  • Vermont: Average Cost of Comprehensive Coverage = $140; Average Cost of Collision Coverage = $465.
  • Virginia: Average Cost of Comprehensive Coverage = $100; Average Cost of Collision Coverage = $380.
  • Washington: Average Cost of Comprehensive Coverage = $90; Average Cost of Collision Coverage = $380.
  • West Virginia: Average Cost of Comprehensive Coverage = $180; Average Cost of Collision Coverage = $465.
  • Wisconsin: Average Cost of Comprehensive Coverage = $220; Average Cost of Collision Coverage = $460.
  • Wyoming: Average Cost of Comprehensive Coverage = $350; Average Cost of Collision Coverage = $650.

How to Save on Collision and Comprehensive Insurance Cover

Michigan-based drivers could find themselves paying over $1,300 for these two additional coverage options, and that’s just the average. If you’re a young driver with several speeding tickets, at-fault accidents, and other high-risk factors, and you account for liability coverage, the costs will spiral and could leave you seriously out of pocket.

Fortunately, there are a few ways you can save, bringing the cost of collision and comprehensive auto insurance down to a respectable and affordable level.

Bundle Your Insurance Policies

Bundling is the act of buying multiple insurance policies from the same company. Many insurers will give you a discount of up to 30% if you purchase home insurance and auto insurance through them, and most auto insurers will offer you discounts if you add multiple cars onto a single policy.

Fix Your Credit Score

Everyone understands the importance of a good credit score when it comes to home loans, car loans, and credit cards, but this three-digit number is also important when applying for auto insurance policies.

Underwriters know that bad credit drivers are more likely to be involved in car accidents and to make claims. As a result, they give good credit drivers much lower rates.

By making a few small changes to your finances, including increasing your credit limits, paying off as much of your debt as you can, and avoiding any new credit applications, you can make quick and noticeable changes to your credit score, and these can improve your chances of getting cheap car insurance coverage.

Pay a Higher Deductible

As noted already, when you pay a higher deductible, your premiums will drop as it decreases the insurer’s outgoings. It will mean you’ll pay more in the event of a claim, but it’ll also reduce your payments and you’ll be much better off in the long run if you avoid making any claims.

Choose Your Car Carefully

The age and value of your vehicle have a big impact on the types of coverage that you need, as well as the coverage limits. A new car has a high cash value, may cost more to repair, and simply cannot be written off following a catastrophic crash. 

If you have a new car, you’ll want to have full coverage and can expect to pay high car insurance rates as a result. You’ll also lose a lot of money on the car purchase itself, as brand-new vehicles depreciate rapidly, losing as much as 20% in the first year and 10% per year thereafter.

By purchasing a car that is a few years old, you’ll still get something that is relatively new, but you won’t pay through the nose for it and you can think twice about getting extensive and costly cover. If it has a high safety rating and lots of important safety features, you will save even more.

Job-Based Discounts

Car insurance companies may offer cheaper insurance quotes if you are employed in one of the following professions:

  • Doctors and Nurses
  • Scientists
  • Law Enforcement
  • Certified Accountants
  • Engineers
  • Teachers
  • Military Personnel
  • First Responders

Ask the insurance company if you can qualify for any of these discounts as many of them won’t offer them outright.

Remove Unnecessary Optional Coverage

Insurance companies will offer you optional extras like rental car cover, roadside assistance, and pet injury cover. Some of these will be bundled into your comprehensive injury coverage and are definitely worth having when that is the case. But if you’re paying extra for them and adding them willingly, you might want to think twice.

This is especially true for roadside assistance, which is often charged as an added extra but is also offered everywhere from auto clubs to premium credit cards.

Get Usage-Based Discounts

Most of the industry’s biggest insurers offer usage-based discounts. They will install telematics devices in your car and track your driving habits, recording everything from the time of day that you drive to the amount of time you spend looking at your phone, and more. They offer discounts just for signing up to these programs and many also promise that your rates won’t increase, so you have nothing to lose.

If you don’t drive that many miles and are a safe and responsible driver, these apps could save you a lot of money.

Drop Coverage Options

If your auto insurance coverage options are persistently high, and you can’t find reasonable and affordable rates no matter how many insurers you compare, it could be time to reduce liability limits and coverage options.

If your state doesn’t require it, you don’t have an expensive car, and there aren’t many uninsured motorists in your state, do you need uninsured motorist cover? If you don’t have many assets, do you really need to get more than the minimum bodily injury and property damage liability cover?

These are the questions that you need to ask yourself and, if possible, you should ask them before you purchase your car. Many drivers, especially those getting behind the wheel for the first time, will spend all their money on a new car and only then start looking for insurance.

Once they do, they realize they have made a mistake. By doing this research in advance, the reality of the situation will sink in before you make that decision and you can get a more suitable car.

Source: pocketyourdollars.com

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How are Auto Insurance Rates Determined?

  • Car Insurance

Auto insurance rates, like all insurance rates, are carefully considered calculations based on statistical probabilities and strict underwriting techniques. Insurers don’t throw random numbers at you in the hope that something sticks and, contrary to what you might think, they don’t charge as much as they think they can get away with.

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In this guide, we’ll look at all the things that go into setting your car insurance premiums, from the ones you’d expect to the ones you definitely wouldn’t.

This is how auto insurance rates are determined.

Age

Your age is one of the biggest factors in determining your auto insurance rates. Car insurance companies have a wealth of data concerning the ages you are most likely and least likely to be involved in an accident.

A 16-year-old driver is three to four times more likely to crash than a driver in their early 20s. That’s a difference of just four years, but in the eyes of the insurer, it’s the difference between a high-risk driver and a moderate-risk driver.

In fact, the risk is so disproportionately great for 16- and 17-year olds that they are nearly twice as likely to be involved in an accident than 18- and 19-year olds. They are also more likely to get speeding tickets and receive violations for racing and reckless driving.

We’ve all been there. If you weren’t that reckless kid who wanted to put the pedal to the metal and impress your friends, you knew someone who was. Thankfully, most drivers mature very quickly, the risk plummets, and insurers are able to reward them with lower rates.

Gender

Young men are more dangerous than young women behind the wheel. One of the highest risk demographics is a 16-year old male driver. By virtue of their age and their gender alone, their insurance quotes will likely be higher than at any other point in their life, even if they later make a claim for an at-fault accident or get convicted of a DUI.

It seems unfair, especially if you consider yourself to be a responsible, careful, young male driver, but insurers aren’t interested in promises. They focus purely on the statistics and for teenage boys, those statistics don’t look good.

Young female drivers are still considered to be a greater risk than older females, but they can expect to pay less than males on average.

There are a few caveats here that need to be addressed.

Firstly, while young men are charged more than young women, the same can’t be said for older drivers. In older drivers, the accident rate is higher in women than it is in men and some insurance quotes will reflect this.

Secondly, a handful of states have outlawed the practice of discriminating based on gender. These states include Massachusetts, California, Michigan, Montana, Hawaii, Pennsylvania, and North Carolina.

Homeowner and Marital Status

Married drivers are safer than single drivers. It seems like a strange statement to make as there is no direct and obvious reason, and what’s even stranger is that the difference is considerable.

In one study, researchers found that single drivers were twice as likely to be involved in a car accident when all other parameters were accounted for. In other words, a 25-year-old driver with a clean driving history is twice as likely to crash than a 25-year old married driver with the same driving history.

You could pay as much as 15% less on your auto insurance premiums just because you tied the knot!

While there is no obvious reasoning behind this, it seems plausible to suggest that married drivers are safer because they have more responsibility and more to lose. Getting married also requires making a very big commitment, and such commitments are more likely to be made by people who are responsible and grounded.

Of course, that’s not to say that you’re irresponsible if you’re not married or that you’re responsible if you are. We’re talking about averages.

By the same token, homeowners can secure lower premiums than renters. Not only are they deemed a lower risk, but they are also a better prospect to the insurer, as they have more money, are more financially responsible, and can purchase a homeowners insurance policy along with their car insurance policy.

In this sense, a homeowner can save money in two ways, making homeowner status one of the biggest determining factors in acquiring cheap car insurance.

Location

Car insurance quotes differ considerably from state to state. Drivers in rural areas may pay less than those in built-up areas, but that’s not always the case.

Underwriters will look at the level of car crime (theft, vandalism) and car accidents in your area, before using this information to set your rates. Weather and animal collisions will also be considered.

Credit History

Credit scores are checked in most states and higher premiums are charged to drivers with bad credit and no credit as there is a higher chance (statistically speaking) they will make an insurance claim.

Your credit score is an essential component of your financial life, something you need to nurture carefully and check at least once a year. 

35% of your credit score is based on your payment history, and there is no quick and easy way to improve it. The same applies to the smaller parts of your score that are based on account age. The only way to improve these aspects of your score is to keep making payments, avoid too many applications and new accounts, and prioritize all debt payments.

30% of your score is based on your credit utilization ratio and this can be changed following a few simple improvements. Credit utilization looks at your total available credit (credit limits) and your total used credit (debt). By increasing your limits and paying off as much debt as possible, you can improve this aspect of your score.

Claims History

Insurance companies will check your claims history before setting your premiums and may charge you more if you have any at-fault claims in your recent history.

It’s a different story if you have comprehensive claims and accidents that weren’t your fault, but generally, the more you cost your current insurers and previous insurers, the higher your premiums will be.

Driving Record

Your driving history is one of the biggest things affecting your car insurance rates. The more moving violations you have on your record, the more likely you are to be hit with high rates.

Even a speeding ticket can increase your rates by between 15% and 30%, while DUI/DWI convictions and reckless driving/racing charges could bump your costs by as much as 70%.

Type of Vehicle

One of the biggest mistakes that young drivers make is to purchase a flash, fast car that looks great but is far from practical. No 16-year-old boy dreams of buying a used Honda; they want sports cars, luxury cars, something they can show off to their friends.

Underwriters look at the likelihood of the vehicle being stolen (based on national and local statistics) and account for anti-theft devices, safety features, and the cost of repairs. The fewer features it has and the harder it is to find affordable and suitable parts, the higher your auto insurance quotes will be.

Instead, look for a vehicle that is a few years old but has a high safety rating, lots of safety features (front and side airbags, anti-lock brakes) and is not targeted by thieves. The difference between some luxury German cars compared to cheaper Honda and Toyota cars can be over 200%.

Mileage

How much you drive isn’t as important as you would expect. The difference between a driver who does 5,000 miles a year and one who does 15,000 is often just a couple of percent. It doesn’t make much sense at first, because surely the driver who does 15,000 miles is three times as likely to be involved in an accident as one who does 5,000.

But, as always, it comes down to statistics. 

Statistically speaking, the more miles you do, the more experienced you are, and this experience pays off. People who limit their driving to just a few thousand miles may do so because they don’t like driving in the dark or refuse to drive too far from their homes or on busy roads. They may not be confident behind the wheel.

Of course, that only applies to a small percentage of them, but that’s enough to skew the statistics and to balance things out. 

Lower mileage drivers will still be quoted less, but because of these factors, the difference won’t be as impressive as you might have thought.

Driving habits are just as important, with the underwriters looking at where you do those miles, how busy the roads are, what time you drive, and how common car accidents are in that area.

Bottom Line: You Won’t Always Pay More

In all of the above cases, we looked at risk and how it can impact car insurance rates. However, you won’t always receive higher insurance rates based on some of the factors we discussed. You will certainly be deemed a higher risk, but many states don’t allow insurers to discriminate in some of these areas.

As noted above, in some states, California included, it is illegal for insurance companies to charge higher rates based on gender. Make sure you check with your local authorities and insurance providers to better understand what is and isn’t considered when determining your auto insurance rates.

Source: pocketyourdollars.com

Auto Loan Debt Tops $1 Trillion

This Article was Updated July 5, 2018

When you are looking to buy a vehicle, the first thing you should do is apply for a preapproved loan. The loan process can seem daunting, but it’s easier than you think and getting preapproval prior to going to the car dealer may help alleviate a lot of frustration along the way.

Here are five steps for getting a car loan.

  1. Check Your Credit
  2. Know Your Budget
  3. Determine How Much You Can Afford
  4. Get Preapproved
  5. Go Shopping

1. Check Your Credit

Before you shop for a loan, check your credit report. The better your credit, the cheaper it is to borrow money and secure auto financing. With a higher credit score and a better credit history, you may be entitled to lower loan interest rates, and you may also qualify for lower auto insurance premiums.

Review your credit report to look for unusual activity. Dispute errors such as incorrect balances or late payments on your credit report. If you have a lower credit score and would like to give it a bit of a boost before car shopping, pay off credit card balances or smaller loans.

If your credit score is low, don’t fret. A lower score won’t prevent you from getting a loan. But depending on your score, you may end up paying a higher interest rate. If you have a low credit score and want to shoot for lower interest rates, take some time to improve your credit score before you apply for loans or attempt to secure any other auto financing.

2. Know Your Budget

Having a budget and knowing how much of a car payment you can afford is essential. You want to be sure your car payment fits in line with your other financial goals. Yes, you may be able to cover $400 a month, but that amount may take away from your monthly savings goal.

If you don’t already have a budget, start with your monthly income after taxes and subtract your usual monthly expenses and how much you plan to put in savings each month. For bills that don’t come every month, such as Amazon Prime or Xbox Live, take the yearly charge and divide it by 12. Then add the result to your monthly budget. If you’re worried, you spend too much each month, find simple ways to whittle your budget down.

You’ll also want to plan ahead for new car costs, such as vehicle registration and auto insurance, and regular car maintenance, such as oil changes and basic repairs. By knowing your budget and what to expect, you can easily see how much room you have for a car payment.

3. Determine How Much You Can Afford

Once you understand where you are financially, you can decide on a reasonable monthly car payment. For many, a good rule of thumb is to not spend more than 10% of your take-home income on a vehicle. In other words, if you make $60,000 after taxes a year, you shouldn’t spend more than $500 per month on car payments. But depending on your budget, you may be better off with a lower payment.

With a payment in mind, you can use an auto loan calculator to figure out the largest loan you can afford. Simply enter in the monthly payment you’d like, the interest rate, and the loan period. And remember that making a larger down payment can reduce your monthly payment. You can also use an auto loan calculator to break down a total loan amount into monthly payments.

You’ll also want to think about how long you’d like to pay off your loan. Car loan terms are normally three, four, five, or six years long. With a longer loan period, you’ll have lower monthly payments. But beware—a lengthy car loan term can have a negative effect on your finances. First, you’ll spend more on the total price of the vehicle by paying more interest. Second, you may be upside down on the loan for a larger chunk of time, meaning you owe more than the car is actually worth.

4. Get Preapproved

Before you ever set foot on a car lot, you’ll want to be preapproved for a car loan. Research potential loans and then compare the terms, lengths of time, and interest rates to find the best deal. A great place to shop for a car loan is at your local bank or credit union. But don’t stop there—look online too. The loan with the best terms, interest rate, and loan amount will be the one you want to get preapproved for. Just know that preapproved loans only last for a certain amount of time, so it’s best to get preapproved when you’re nearly ready to shop for a car.

However, when you apply, the lender will run a credit check—which will lower your credit score slightly—so you’ll want to keep all your loan applications within a 14-day period. That way, the many credit checks will only show as one inquiry instead of multiple ones.

Get matched with a personal loan that’s right for you today.

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When you’re preapproved, the lender decides if you’re eligible and how much you’re eligible for. They’ll also tell you what interest rate you qualify for, so you’ll know what you have to work with before you even walk into a dealership. But keep in mind that preapproved loans aren’t the same as final auto loans. Depending on the car you buy, your final loan could be less than what you were preapproved for.

In most cases, if you secure a pre-approved loan, you shouldn’t have any problems getting a final loan. But being preapproved doesn’t mean you’ll automatically receive a loan when the time comes. Factors such as the info you provided or whether or not the lender agrees on the value of the car can affect the final loan approval. It’s never a deal until it’s a done deal.

If you can’t get preapproved, don’t abandon all hope. You could also try making a larger down payment to reduce the amount you are borrowing, or you could ask someone to cosign on the loan. If you ask someone to cosign, take it seriously. By doing so, you are asking them to put their credit on the line for you and repay the loan if you can’t.

When co-signing a car loan, they do not acquire any rights to the vehicle. They are simply stating that they have agreed to become obligated to repay the total amount of the loan if you were to default or found that you were unable to pay.

Co-signing a car loan is more like an additional form of insurance (or reassurance) for the lender that the debt will be paid no matter what.

Usually, a person with bad credit or less-than-perfect credit may require the assistance of a co-signer for their auto financing and loan.

5. Go Shopping

Now you’re ready to look for a new ride. Put in a little time for research and find cars that are known to be reliable and fit into your budget. You’ll also want to consider size, color, gas mileage, and extra features. Use resources like Consumer Reports to read reviews and get an idea of which cars may be best for you.

Once you have narrowed down the car you are interested in, investigate how much it’s worth, so you aren’t accidentally duped. Sites such as Kelley Blue Book or Edmunds can help you figure out the going rate for your ideal car. After you’re armed with this information, compare prices at different car dealerships in your area. And don’t forget to check dealer incentives and rebates to get the best possible price.

By following these steps, you’ll be ready to make the best financial decision when getting a car loan. Even if you aren’t ready to buy a car right now, it doesn’t hurt to be prepared. Start by acquiring a free copy of your credit summary.

It is always a good idea to pull your credit reports each year, so you can make sure they are as accurate as they should be. If you find any mistakes, be sure to dispute them with the proper credit bureau. Remember, each credit report may differ, so it is best to acquire all three.
If you want to know what your credit is before purchasing a car, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get a free credit score updated every 14 days.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

Image: istock

Source: credit.com

How to Get the Most Bang For Your Buck When Buying a Car

Need a new car? Car shopping can provide the perfect mix of excitement and stress. On one end, you’re getting a new car. On the other, you probably know it’s going to cost you a pretty penny. 

With the average cost of a new car being $37,000 and $15,000 to $20,000 for a used car, there is plenty of opportunities to save money on this large expense. In this guide, you’ll learn some basic car shopping tips along with how to save money and get more bang for your buck. 

Determine How Much You Can Afford

It’s best to determine a budget before you start looking for cars. Be honest about how much you can afford to spend or finance. If you can’t see yourself paying a car note for a $35,000 vehicle, don’t put yourself in that situation. 

Tap your savings and use other windfalls like work bonuses or a tax refund to add to your car budget. Look at your other current expenses and see how much you can afford if you’re going to finance along with how long your ideal term would be. 

For example, some car dealers can make the monthly payment seem smaller by stretching out the term for 5-7 years. Do you really want to be paying on your car that long?

Check Your Credit

If you’re going to be financing a car, check your credit early on to see where you stand. It doesn’t affect your credit when you check your score online and it usually won’t cost you anything. 

See if you can use a site like Credit Karma or Credit Sesame to check your credit for free. Realize that these sites provide a Vantage score which is different from the Fico score that most car dealers use. Just keep in mind that your score may show up higher on a site like Credit Sesame but it does give you a range to consider. 

You can also try to sign up for MyFico to check your actual Fico score or Discover Scorecard which is free to use. The better your score, the better rate you can get on a car loan.

RELATED: 5 Reasons Why Your Credit Score Can Decrease

Compare Your Shopping Options

There are so many places to consider when you’re looking to buy a car. There are car dealerships, private lots, and even rental car companies that sell cars like Enterprise. 

You can start by visiting a few websites or calling car lots to see what type of inventory they have. There Car dealerships do a good job of regularly updating their website. 

Schedule a day and time to come in and look at cars and do a few test drives. 

RELATED: 5 Things to Lookout For When Purchasing a New Car

New or Used?

A common question car buyers have is whether they should get a brand new vehicle or go the used route. This really depends on your budget and preferences. For most people, buying used will be the best decision because it saves you money. 

Used cars can be in great condition and some may even have low mileage. Buying used doesn’t have to mean your car was manufactured in 1992. You can still buy a fairly newer car that has all the features you like without the brand new price tag. You may even be able to get a warranty on the used car as well for a few years.

When considering a used car, make sure you ask to see all the details regarding the full history of the car like maintenance, repairs, accident history, etc. CarFax is a site that provides detailed reports on all used cars that you can access. If you’re purchasing a car from a private owner, you can always have a mechanic come with you to assess the vehicle. 

Remember, it’s important to do your due diligence in this area because if you catch potential issues early, you can save a ton of money.

RELATED: Buying a New Car? 5 Areas Your Mechanic Should Check Beforehand

Where To Finance

If you’re going to finance your car, you want to get the best rates and terms possible. Car dealerships tend to offer in-house financing but it’s not the best. It also takes a while as your salesperson may spend time shopping around with their dozens of lenders to find you an ideal interest rate. 

Other car lots may offer a ‘buy here pay here’ option where you don’t have to finance through another company. While this may sound convenient on the surface, you won’t have any other rates or offers to compare and the car lot may not have the most competitive offer. This means you could end up overpaying extra for financing. 

One of the better options to get affordable financing is to use your bank or credit union. Don’t forget, you can also get financing online from trusted lenders. 

See if you can get a loan with better terms and interest then pay the car owner or dealership with the cash. From there, all you’d need to do is pay the loan off with your 3rd party lender. 

Need a new car? Car shopping can provide the perfect mix of excitement and stress. Click To Tweet 

Saving More on Your Purchase

Buying a car can be expensive no matter how you dice it. However, there are quite a few things you can do to save while car shopping. 

Trade-in your current car. Some car lots and dealerships will pay you cash if you trade in your current car in exchange for the new one. Depending on the car you have and its condition, this could save you hundreds or even thousands of dollars.

Have excellent credit. There are so many benefits to having great credit. With a high credit score, you may even be able to get a 0% APR on your car loan for several months or years. 

Negotiate. Many people forget that they can negotiate the price of their new car. Dealerships may not be so willing to work with you, but if you’re buying from a smaller car lot or private owner, they may be more willing to negotiate on the price of the car.

Shop around for insurance. Auto insurance is a requirement. Still, that doesn’t mean you have to pay an arm and leg for it. Shop around and compare quotes to find the best option for your needs and preferences. 

Source: everythingfinanceblog.com

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