Should I Buy a New or Used Car?

Before you decide whether to buy a new or used car, it’s important to consider the reasons you’re making the purchase.

If you’re simply looking for an economical mode of transportation, a used car may be an option. Price isn’t everyone’s top priority, however. Many buyers are willing to pay extra for a car that’s free of mechanical problems. Others like the idea of being a vehicle’s first owner.

Here’s a checklist of seven things to consider before you buy your next car.

1. Is Having the Latest Car Technology Important to You?

Car manufacturers have embraced new technology to improve the driving experience and improve passenger safety. The newer the car, the more high-tech features it’s likely to have. Are you looking for a Bluetooth stereo system that connects to your smartphone? How about a rear-view camera that makes it easier to back up? Do you want an automatic braking system that deploys when a collision is imminent? If so, you should think about buying a new car.

2. How Much Are You Willing to Spend on Car Insurance?

New cars are more costly to repair or replace than used cars. In general, the more you pay for a car, the more it costs to insure. If saving money on insurance is important to you, a used car may work out best. The Insurance Information Institute says agents can estimate how much your insurance will cost before you make your purchase.

3. Do You Want a Car That Enhances Your Image?

Many people view new cars as status symbols.2 Any car can take you from Point A to Point B, but a new car has more cachet. There’s nothing like the gleam of a factory-fresh paint job to turn heads. If impressing friends or business associates is a priority, a new car may be right for you.

4. Are You Prepared to Deal with Maintenance Issues?

While used cars cost less than new ones, they typically require more maintenance. The older the car, the more often you’re likely to visit the repair shop. According to Autotrader.com,3 you can minimize the chances of buying a used car with serious maintenance problems if you first have it inspected by a mechanic and obtain a vehicle history report from companies like Carfax or AutoCheck. No matter how well a car has been maintained, nothing lasts forever. If you dislike upkeep, you may dislike owning a used car.

5. Are You Aware of New Car Depreciation?

A new car begins depreciating in value the moment you drive it away from a dealership. New vehicles typically depreciate between 15 and 25 percent each year over the first five years of ownership.4 It’s not unusual for motorists to owe more on their new cars than they could recover if they resold them. If you’re not prepared to absorb this loss in valuation, you should consider buying a used vehicle.

6. Will a Teenager Be Driving the Car?

The modern safety technology that new cars offer seems made to order for inexperienced teenage drivers. The problem is that new cars are very expensive to insure for teens. That’s because inexperienced drivers are more likely than others to have collisions. If you’re buying a car for a teen, your challenge is to find a car that strikes a good balance between car safety and affordability. For guidance, the National Highway Traffic Safety Administration provides detailed safety ratings for vehicles manufactured since 2011.

7. How Much Time Are You Willing to Spend Shopping?

The process of buying a new car is fairly simple. You go to a dealership and pick the model you want. The car you choose should be in sound mechanical condition. According to Edmunds.com, new cars come with a limited warranty of at least three years and a power train warranty of at least five years. That means you won’t need to consult a mechanic before making your purchase. In contrast, finding a used car takes more time. You may visit numerous car lots before you find one that meets your standards. If you lack the time, a new car may work out best.

Now that you’ve got some ideas on how to save on your car insurance, you may want to check with your carrier to review your coverage. You can get a quote from Southwest Federal Insurance.

Sources:
1 http://www.iii.org/press-release/buying-a-new-car-or-truck-consider-auto-insurance-costs-and-protect-your-loan-when-trading-up-091713
2 http://www.msn.com/en-us/autos/research/top-14-status-symbol-cars-at-bargain-prices/ss-AA6AJry
3 http://www.autotrader.com/car-shopping/4-questions-to-help-you-decide-on-a-new-or-used-car-167808
4 https://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html
5 https://www.edmunds.com/car-buying/should-i-buy-a-new-car-or-a-used-luxury-car.html

ways to save on your home insurance

By Stephen Donohue and Atlantic Insurance & Benefit Company

This post is part of a series of insurance blogs on Safeco.com showcasing the expertise of local independent agents and aimed at helping you understand insurance coverage and other important issues

If you feel like you’re paying more for homeowners insurance than you used to, you might be right. Over the past 20 years, these rates have increased over 50% – and U.S. homeowners pay an average of $952 annually, according to ValuePenguin, which provides consumers with research and guidance on financial topics.

You want to make sure your home is protected, but you don’t want to pay more than you have to, either. Here are eight things you can do to make sure you get the best deal on homeowners insurance:

Shop around. Rates can vary dramatically from one company to another – and there are hundreds of different insurers that offer homeowners insurance. If you haven’t researched the market in the past 24 months, it makes sense to shop. Your local independent agent can help, and since they aren’t tied to one insurance company, they can offer you plenty of options.

Increase your deductible. Many policies are written with a $500 deductible, but depending on where you live, you could save 10% or more by increasing your deductible to $1,000. This one change can help significantly reduce or even eliminate your annual premium increase altogether. And some people opt for even higher deductibles, all the way up to $5,000 – but they need to be diligent about keeping funds set aside in case they need to file a claim.

Don’t file small claims. If a homeowners claim would cost less than $1,000, it probably doesn’t make sense to file it. Insurance companies track customer claims, and even a claim of a few hundred dollars could cause a client to miss out on “loss-free” discounts.

Don’t file small claims. If a homeowners claim would cost less than $1,000, it probably doesn’t make sense to file it. Insurance companies track customer claims, and even a claim of a few hundred dollars could cause a client to miss out on “loss-free” discounts.

Maintain good credit. In most states, insurers offer discounts to applicants with high credit scores, so keeping a solid credit history can lower your insurance costs. To protect your credit rating, pay your bills on time, keep outstanding balances low, and monitor your credit report regularly.

Review your policy carefully. You likely are eligible for a number of discounts and credits, so make sure you get them! Homeowners often receive discounts for having newer homes, multiple policies with the same company, good credit and a clean claims history. Even your proximity to a fire hydrant might save you money. And if your situation has changed, let your insurer know immediately as you could be eligible for even more discounts.

Look into group insurance discounts. Some organizations offer special insurance programs to employees, usually with discounts of 5% to 10% and features such as payment via payroll deduction. You also may qualify for discounts if you are a member of a union, auto club, alumni association, or professional group.

Improve your home security and safety. Deadbolts, burglar alarms, and other security devices are all ways to keep your home safe and potentially lower your insurance costs. For example, an alarm that connects to police, fire, or other monitoring stations can save you as much as 20% on your homeowners premium.

Keep in mind that different companies offer different discounts, and your options might vary depending on where you live. An local independent agent who knows your market can help you find the best coverage at the best price for your needs.

Now that you’ve got some ideas on how to save on your car insurance, you may want to check with your carrier to review your coverage. You can get a quote from Southwest Federal Insurance.