Leasing isn't a magic shortcut to a great car deal. For some people, it makes solid sense; for others, it can be a money trap.
The leasing boom of the 1990s became the leasing headache a few years later for people who suddenly found they were facing huge charges for mileage overruns or damage to the vehicle.
Nonetheless, leasing can be a good move if you're someone who wants the very latest make, drives fewer than 12,000 to 15,000 miles a year -- the standard limits in most leases -- and treats it with kid gloves. Leasing generally offers lower monthly payments or allows a customer to drive an upscale car for what they might pay for a basic sedan.
Keys to a good deal
Knowledge and strategy are the keys to negotiating a good leasing deal.
Ignorance -- not knowing terminology or how the lease works, or not being told all of those details by the dealer or lease company -- is the main factor in paying too much for a lease. In Florida alone, the state attorney general's office has identified 40 types of fraud in leasing. Most rely on customer ignorance to work.
State attorneys general, consumer groups and lawyers claim that an uninformed would-be leaser could be hurt by as much as $4,000 in a single lease. This Bankrate article will help you avoid leasing pitfalls.
One thing to keep in mind: A lot of drivers pay thousands more to lease the same car they went in to buy. Commonly, these buyers are talked into a lease without understanding all the details. To find out if leasing makes the most financial sense for you, use Bankrate's interactive calculator.
Leasing gives dealers more places to give and take than buying does. Make sure you are perfectly clear on every step along the way and know exactly what you are paying, when and for what, before you sign a lease.
Residual value
What you are doing in a lease is paying for the difference between the value of the car brand new on the showroom floor and the amount the dealer predicts it will be worth when you bring it back at the end of the lease; this is called the residual value. Call the bank or dealer to find the residual value. Most cars have a residual value of between 50 and 58 percent for a 36-month lease.
Capitalized cost
The capitalized cost is not so easy to get a handle on. The dealer sets the figure and often establishes it at the MSRP. However, that doesn't mean you have to accept that as the final figure. Just as you can usually negotiate down the MSRP in a purchase, you can negotiate down the capitalized cost in a lease situation.
The capitalized cost should also be reduced by any trade-in, down payment or a manufacturer's rebate. It can be increased if you trade in a car that you owe a balance on or by acquisition fees charged to obtain the loan.
But beware: The dealer can set the capitalized cost higher than the MSRP. This may happen when you're trying to lease a car that is a particularly fast-selling model, just as they place a premium price (over MSRP) on hard-to-get models. If you see the capitalized cost is higher than the MSRP on the car, you should know why and think twice about the deal.
You should also use the capitalized cost figure for comparison-shopping lease deals from different dealers. But that's not the only basic question to have answered with complete clarity when you bargain.
Remember that a lot of numbers have to line up, just like buying. No down payment is fine, but that saving will probably be balanced out in the costs somewhere else in the lease. So perhaps a down payment and a different lease length or better mileage allowance would be a better deal for you.
When the lease is up
Your lease may allow you to purchase the vehicle when the lease is up. Find out what the costs would be (it is usually the residual value stated in the lease). That figure, plus your total costs from start to finish of the lease, will tell you what it will cost to own that car in three years (or whatever the lease term is) down the road.
Before you lease, consider whether you would buy the vehicle at the end of the lease. You may have no intention of doing it, but consider this "emergency planning" and know what it would cost, just in case. If the figure is outrageous, maybe you're not looking at the best lease deal.
And always remember to read every single word and number in the lease -- and be sure you understand them -- before you sign anything.
Sabtu, 04 September 2010
Kamis, 15 April 2010
commercial car insurance: Buying car insurance: using an agent vs. Buying direct
The choice between buying auto insurance through an agent or directly from the insurance company is really a matter of personal preference. The bottom line is using someone that will give you the best deal with the least amount of hassle. Sometimes a local insurance agent is best – especially if that same agent carries policies for your home, business or life insurance and can combine coverages to save you money and time. In the same vein, going directly to the company can sometimes be easier – especially now that insurers like Geico, Progressive, e-surance.com and Allstate offer online options to get quotes and purchase insurance within minutes.
How much service do you need? If you know what kind of insurance you want, don’t need advice and are savvy with filing claims, then going directly to the company is probably for you. However, if you don’t know what kind or how much insurance you need, an agent may be able to provide you with more personalized service, more advice on policy limits and more assistance should you need to file a claim. If you do decide to use an agent, keep in mind that there are independent agents (or brokers) – those that shop around to several different insurance companies for the best deal, and exclusive agents – those that have exclusive relationships with one or a few, specific insurance companies. Each type has value depending upon your needs, but make sure you know what kind of agent they are before you give them your business.
Check out the Free Advice Auto Insurance Center for free auto insurance insurance quotes, insurance company reviews, and more information about insurance companies.
How much service do you need? If you know what kind of insurance you want, don’t need advice and are savvy with filing claims, then going directly to the company is probably for you. However, if you don’t know what kind or how much insurance you need, an agent may be able to provide you with more personalized service, more advice on policy limits and more assistance should you need to file a claim. If you do decide to use an agent, keep in mind that there are independent agents (or brokers) – those that shop around to several different insurance companies for the best deal, and exclusive agents – those that have exclusive relationships with one or a few, specific insurance companies. Each type has value depending upon your needs, but make sure you know what kind of agent they are before you give them your business.
Check out the Free Advice Auto Insurance Center for free auto insurance insurance quotes, insurance company reviews, and more information about insurance companies.
Minggu, 11 April 2010
8 steps to filing an auto insurance claim
More than 220 million motor vehicles clog America's roads today, making it likely that someday you will have an accident and file an auto insurance claim.
The good news is that in most auto accident claims, personal injury isn't the problem.
"Sixty-three cents of every claim dollar goes to [pay for] physical damage on your car," says John Eager, senior director of claims services for the National Association of Independent Insurers, based in Des Plaines, Ill.
Although a personal injury claim may require a different level of proof and persistence than a vehicle damage claim and insurance regulations vary from state to state, the basic steps to take information needed to file a claim are fairly similar.
For the most part, the claims process for vehicle damage is simple: You make a claim, the adjuster comes out to estimate the cost to repair the damage, the insurance company sends you a check for that amount and you use it to pay for the repairs.
Every insurance claim requires some kind of proof of damage or injury before a carrier will pay. On auto claims, Eager says, there are five elements of proof that will come into play: what you tell the insurance companies, what the other party tells them, a police report, witnesses and physical damage at the scene.
- advertisement -
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Step 1 (at the accident scene): Call 911 if someone has a life-threatening injury. If there's no emergency, don't tie up 911, but get any needed medical attention and call the police directly. Remember, you need that police report.
Step 2: Exchange license plate numbers, contact information and auto insurance information with the other parties involved. Most states require drivers to have an insurance identification card in the vehicle and it will provide most of the pertinent information, Eager says. Fill in any gaps, though. Make sure to get phone numbers.
Step 3: Look for witnesses who will be willing to tell what they saw and get their contact information as well. If you are unable to gather information at the scene, the police report can be a back-up source of information on the other parties involved and witnesses.
"There are a lot of jurisdictions where the police officers may try to avoid taking an accident report, assuming that the damage is under $500," a typical insurance deductible, warns retired insurance adjuster J.D. Howard, who co-founded the Insurance Consumer Advocate Network, based in Branson West, Mo. "Insist on a report. If [officers] won't file a traffic accident report, insist on an incident report. You want an independent, disinterested record of what happened. You'd be amazed at how often the other driver's story will change."
If the accident happens in a parking lot, an officer may plead no jurisdiction. Insist on an incident report, Howard says. Failing that, in a mall or other facility that has a security force, you may ask security to file a report. In a lot without any security, you may want to ask a shop owner.
"You want to get something in writing," Howard says, because "insurance companies are obliged to believe the story given to them by their own policyholder" unless there's proof to the contrary.
Finding of fault is very important. Besides the rental car and diminished value issues, the negligent party's carrier might owe you for any time off work, Howard says. In addition, your company cannot raise your rates if you are not at fault.
Also, the majority of states have adopted "comparative negligence," Eager says. This is a concept based on the idea that no one party is necessarily completely at fault, but that fault is just a matter of degree. Your settlement can be reduced based on the degree of fault.
Step 4: Contact your insurance company as soon as possible. With a cell phone, you may call your company right from the scene. Many have 24-hour claim-filing service by phone. Your insurance ID card should provide the number. Whoever takes your claim will walk you through the process.
Although the other party may be at fault, both Eager and Howard agree that generally you should file the claim with your own insurance carrier. Each carrier is obliged to protect the interests of its own insured, making your claim a secondary concern for the other party's carrier. Chances are you'll get the service you need more readily from your own carrier.
"You have rights with your own carrier that you don't have with the other party's insurance," Howard says. This includes the right to a process for resolving disputes over what expenses should be covered by the insurance.
With no-fault insurance, you have no choice initially but to file with your own carrier. No-fault insurance has thresholds below which your own carrier pays all expenses, except the deductible. Above those thresholds, you may seek restitution from the other party. These thresholds vary by state.
Assuming the other party is at fault and you do not have collision coverage on your vehicle, you will have no choice but to file a claim against the other party's carrier. On the other hand, if the other party does not have insurance, you will have to negotiate with the other party directly or go to court.
Step 5 (if the other party is at fault): You should advise the other party's insurance company that you're pursuing a claim through your carrier and will seek reimbursement for costs your carrier will not pay, including your collision insurance deductible, time off work, auto rental differential and the amount of your diminished resale value, Howard says.
If you have the patience to take an unconventional route that will be challenged by your carrier, Howard believes that if the other party is at fault, you should file claims with both carriers.
"You cannot collect twice for the same thing," he says. However under "multiple source recovery," he adds, "you can collect from two sources and put the checks in a kitty and decide how much was paid for what."
This means meticulously itemizing every expense involved, and which carrier's check paid for which expense. At the end of the process, you would submit the itemized list to your carrier and, if there's anything left in the kitty, you would write a check for the overage to your own carrier.
Step 6 (this may happen earlier or later in the process, depending on the other insurance carrier): You'll get a phone call from the other company asking for your version of events that led to the accident. You need to prepare for this, Eager says.
"Especially with an injury claim, you'd want to check with your insurance carrier to see what statements you need to make to the other insurance carrier."
It's a good idea to write down exactly what you will tell the other carrier beforehand so that in the worst-case scenario -- a lawsuit -- your statement will remain consistent. Don't trust your memory. The other carrier will be taping your statement and will have your exact words at their disposal.
Step 7: The adjuster comes out to take a look at the damage to your vehicle and comes up with an estimate of what it will take to restore it (or replace it, if it's totaled). Then, the insurance company will cut a check in the amount of the repair, minus any collision deductible amount.
If an insurance company has a direct repair program, the adjuster might not even have to come out, Eager says. Under such a program, your insurance carrier will refer you to a shop with which they have an agreement. So, depending on the insurance company, the damage claim estimate may be done by the shop itself, the shop won't have to wait to start repairs and the check can be transmitted right to the shop, Eager says. The shop may also make arrangements for a rental vehicle if you need one.
If the adjuster says the car is totaled (in other words, beyond repair), the adjuster will estimate your compensation on the actual cash value (or depreciated value) of the vehicle before the accident, essentially enabling you to buy a similar used car. However, if you've bought coverage for replacement cost value, the estimate will cover the cost of buying a similar new vehicle.
Step 8 (When disputes arise): If you think your carrier's damage settlement offer is too low, you may ask your carrier for a form of arbitration to resolve the dispute. This process may take two to six weeks, but generally speaking, you will not have to wait for payment. In most cases, the insurance company will pay you the amount it offered immediately, and you'll get the rest when and if the dispute is resolved in your favor.
On the other hand, if you disagree with an offer from the other party's carrier, you may or may not be offered such dispute resolution. If not and the amount in dispute is significant, it may be worthwhile to take legal action.
The good news is that in most auto accident claims, personal injury isn't the problem.
"Sixty-three cents of every claim dollar goes to [pay for] physical damage on your car," says John Eager, senior director of claims services for the National Association of Independent Insurers, based in Des Plaines, Ill.
Although a personal injury claim may require a different level of proof and persistence than a vehicle damage claim and insurance regulations vary from state to state, the basic steps to take information needed to file a claim are fairly similar.
For the most part, the claims process for vehicle damage is simple: You make a claim, the adjuster comes out to estimate the cost to repair the damage, the insurance company sends you a check for that amount and you use it to pay for the repairs.
Every insurance claim requires some kind of proof of damage or injury before a carrier will pay. On auto claims, Eager says, there are five elements of proof that will come into play: what you tell the insurance companies, what the other party tells them, a police report, witnesses and physical damage at the scene.
- advertisement -
{"width":"300","height":"250","ccid":"40954","campid":"19051","cpm":"57.08"}
Step 1 (at the accident scene): Call 911 if someone has a life-threatening injury. If there's no emergency, don't tie up 911, but get any needed medical attention and call the police directly. Remember, you need that police report.
Step 2: Exchange license plate numbers, contact information and auto insurance information with the other parties involved. Most states require drivers to have an insurance identification card in the vehicle and it will provide most of the pertinent information, Eager says. Fill in any gaps, though. Make sure to get phone numbers.
Step 3: Look for witnesses who will be willing to tell what they saw and get their contact information as well. If you are unable to gather information at the scene, the police report can be a back-up source of information on the other parties involved and witnesses.
"There are a lot of jurisdictions where the police officers may try to avoid taking an accident report, assuming that the damage is under $500," a typical insurance deductible, warns retired insurance adjuster J.D. Howard, who co-founded the Insurance Consumer Advocate Network, based in Branson West, Mo. "Insist on a report. If [officers] won't file a traffic accident report, insist on an incident report. You want an independent, disinterested record of what happened. You'd be amazed at how often the other driver's story will change."
If the accident happens in a parking lot, an officer may plead no jurisdiction. Insist on an incident report, Howard says. Failing that, in a mall or other facility that has a security force, you may ask security to file a report. In a lot without any security, you may want to ask a shop owner.
"You want to get something in writing," Howard says, because "insurance companies are obliged to believe the story given to them by their own policyholder" unless there's proof to the contrary.
Finding of fault is very important. Besides the rental car and diminished value issues, the negligent party's carrier might owe you for any time off work, Howard says. In addition, your company cannot raise your rates if you are not at fault.
Also, the majority of states have adopted "comparative negligence," Eager says. This is a concept based on the idea that no one party is necessarily completely at fault, but that fault is just a matter of degree. Your settlement can be reduced based on the degree of fault.
Step 4: Contact your insurance company as soon as possible. With a cell phone, you may call your company right from the scene. Many have 24-hour claim-filing service by phone. Your insurance ID card should provide the number. Whoever takes your claim will walk you through the process.
Although the other party may be at fault, both Eager and Howard agree that generally you should file the claim with your own insurance carrier. Each carrier is obliged to protect the interests of its own insured, making your claim a secondary concern for the other party's carrier. Chances are you'll get the service you need more readily from your own carrier.
"You have rights with your own carrier that you don't have with the other party's insurance," Howard says. This includes the right to a process for resolving disputes over what expenses should be covered by the insurance.
With no-fault insurance, you have no choice initially but to file with your own carrier. No-fault insurance has thresholds below which your own carrier pays all expenses, except the deductible. Above those thresholds, you may seek restitution from the other party. These thresholds vary by state.
Assuming the other party is at fault and you do not have collision coverage on your vehicle, you will have no choice but to file a claim against the other party's carrier. On the other hand, if the other party does not have insurance, you will have to negotiate with the other party directly or go to court.
Step 5 (if the other party is at fault): You should advise the other party's insurance company that you're pursuing a claim through your carrier and will seek reimbursement for costs your carrier will not pay, including your collision insurance deductible, time off work, auto rental differential and the amount of your diminished resale value, Howard says.
If you have the patience to take an unconventional route that will be challenged by your carrier, Howard believes that if the other party is at fault, you should file claims with both carriers.
"You cannot collect twice for the same thing," he says. However under "multiple source recovery," he adds, "you can collect from two sources and put the checks in a kitty and decide how much was paid for what."
This means meticulously itemizing every expense involved, and which carrier's check paid for which expense. At the end of the process, you would submit the itemized list to your carrier and, if there's anything left in the kitty, you would write a check for the overage to your own carrier.
Step 6 (this may happen earlier or later in the process, depending on the other insurance carrier): You'll get a phone call from the other company asking for your version of events that led to the accident. You need to prepare for this, Eager says.
"Especially with an injury claim, you'd want to check with your insurance carrier to see what statements you need to make to the other insurance carrier."
It's a good idea to write down exactly what you will tell the other carrier beforehand so that in the worst-case scenario -- a lawsuit -- your statement will remain consistent. Don't trust your memory. The other carrier will be taping your statement and will have your exact words at their disposal.
Step 7: The adjuster comes out to take a look at the damage to your vehicle and comes up with an estimate of what it will take to restore it (or replace it, if it's totaled). Then, the insurance company will cut a check in the amount of the repair, minus any collision deductible amount.
If an insurance company has a direct repair program, the adjuster might not even have to come out, Eager says. Under such a program, your insurance carrier will refer you to a shop with which they have an agreement. So, depending on the insurance company, the damage claim estimate may be done by the shop itself, the shop won't have to wait to start repairs and the check can be transmitted right to the shop, Eager says. The shop may also make arrangements for a rental vehicle if you need one.
If the adjuster says the car is totaled (in other words, beyond repair), the adjuster will estimate your compensation on the actual cash value (or depreciated value) of the vehicle before the accident, essentially enabling you to buy a similar used car. However, if you've bought coverage for replacement cost value, the estimate will cover the cost of buying a similar new vehicle.
Step 8 (When disputes arise): If you think your carrier's damage settlement offer is too low, you may ask your carrier for a form of arbitration to resolve the dispute. This process may take two to six weeks, but generally speaking, you will not have to wait for payment. In most cases, the insurance company will pay you the amount it offered immediately, and you'll get the rest when and if the dispute is resolved in your favor.
On the other hand, if you disagree with an offer from the other party's carrier, you may or may not be offered such dispute resolution. If not and the amount in dispute is significant, it may be worthwhile to take legal action.
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