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Fender-Bender Faux Pas

10.19.09

_o8f1289a1In the heat of the moment, following a car accident, we sometimes use poor judgment. With the adrenaline pumping, the temptation is to say too much. In a recent MSN Money post, we are given 4 great ‘Do-not’ pointers. Keeping these points in mind can save you hours of headache (both figuratively & literally):

What not to do after a car accident:

Do not give a recorded statement to the other driver’s insurance company. It can be used against you later on. You want to control your case and the release of information. Insurance companies must ask you for your permission in order to record an interview.

Do not make friendly conversation with adjusters. Stick to business and only tell them the “who,” “what,” “when” and “where.” Don’t even tell them the how at this point.

Do not give out any information about your family. Do not give out the names of your doctors.

Do not sign a medical release. Federal law protects your medical records. The insurance companies may use this release to dig through all your medical history, even things not related to the car accident.

via 5 things never to tell your insurer – MSN Money.

cars, insurance
hybrid

Is Buying a Hybrid Worth Cost?

8.17.08

In a world of raising gas prices, many have chosen to purchase a new vehicle (potentially a hybrid, but for sure a more fuel efficient car).
But how do the numbers add up?
For all of our computations, lets assume gas is $4 a gallon.

The average American drives 15,000 miles a year. Unless your car runs on water (that is the ugliest car I have ever seen, I wouldn’t drive it even though it runs on water!), your car most likely fits into one of these categories.
For a car averaging 15 mpg, that would add up to 4,000 a year in gas.
For a car averaging 20 mpg, that would add up to 3,000 a year in gas.
For a car averaging 25 mpg, that would add up to 2,400 a year in gas.
For a car averaging 30 mpg, that would add up to 2,000 a year in gas.

So let’s say you want to trade in your 5 year old mid sized SUV that gets 15 mpg, for a 2 year old sedan that gets 30 mpg. The trade sounds smart from all angles, especially the pump, but is it? You save only $2,000 in gas per year…but the car cost $10,000 more than your older SUV. So you are looking at five years just to break even. Not to mention, most Americans would finance their new purchase “to save money” on gas prices. Really a couple minutes with a calculator will eliminate “financial savvy” from most car upgrades. These numbers really fall apart when you consider the high cost of the average hybrid. Sit down, crunch the numbers before you pay 12 grand to save money on gas prices.

So is it ever a good idea to purchase a more fuel efficient car? Yes. If it is time (apart from gas prices) for you to buy a new car and you are not acting out of fear, then it would be wise to consider fuel efficiency.
cars, emotions
fff University: Being ‘Upside-Down’

fff University: Being ‘Upside-Down’

7.15.08

Being Upside-Down is Only Fun on a
Rollercoaster!
You don’t want to be found “upside-down” unless you are spending a day at Six Flags (which I would recommend, and if you do go, you can usually get a coupon/deal off their website.) Anyway, being “upside-down” is a term meaning that you owe more on an item than it is worth (at market value.) For example, you finance your vehicle and owe $16,000 on a car that you could only sell for $14,000. In this situation you would be $2,000 upside-down.
The ability to get upsidedown is the most dangerous aspect of “secured” debt. [Secured debt means there is something standing for the money owed; a car, house, boat, plasma TV.] The financially minded person will NEVER borrow themselves into a situation where they will be upside-down. It is an awful financial position. Debt incurs a certain amount of risk, which can be minimized with an asset that can be sold in a “worst case scenario,” thereby eliminating the debt. For example, you can sell your house and pay off the mortgage. If you are upside-down you sell the item and still owe money. To avoid this position, a person should NEVER FINANCE AN ITEM THAT GOES DOWN IN VALUE (car, boat, ATV, pretty much any consumer good.) and NEVER BORROW MORE MONEY ON YOUR HOUSE THAN IT IS WORTH (No second mortgages, Home Equity Line of Credit, etc.) If you do these things you will always be able to liquidate your debt and escape “a pinch.”
cars, debt, emotions, real estate
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