2020 Financial Crisis Auto Loan Relief

Car manufacturers have been feeling the strain during the financial crisis. There are fewer cars on the road, workers in the factories, and consumers willing to spend, and as a result, the automobile industry has been devastated.

But manufacturers and showrooms are fighting back, finding ways to encourage consumers to buy and to make life easier for the ones that already have. In this guide, we’ll look at the ways that auto lenders are helping consumers hit by the crisis and the ways that manufacturers are encouraging more drivers to purchase.

Financial Crisis Auto Relief: Manufacturers

Automobile manufacturers saw their profits free-fall in March 2020 and that followed into April, with suggestions that the chaos will progress as the year (and the pandemic that has gripped it so fiercely) continues. They are struggling and their customers are struggling as well.

Over 700,000 Americans lost their job in March and unemployment is set to rise to levels that haven’t been seen for years. To make matters work, the country’s 9.5 million+ self-employed workers have seen their incomes half. 

As a result, many are struggling with their debts and finding it harder to meet auto loan payments. To lend a helping hand, many of the world’s biggest manufacturers have established auto loan relief programs:

Ford

Ford announced its response to the crisis towards the end of March. Known as the Built to Lend a Hand program, it offers up to 6 months payments on a brand-new Ford and applies to all models from 2019 and 2020.

As soon as consumers sign up, they will be given 3 months of payments from Ford, while an additional 3 months can be deferred as per the customer’s request. The customer can choose to defer these payments as and when they want, but they must get their auto loan through the Ford Credit program to apply.

Hyundai

South Korean manufacturer, Hyundai, was one of the first to offer an auto loan relief program. South Korea was one of the hardest-hit countries in the early stages of the virus and this led to the major automobile brand offering a relief program in the middle of March.

Known as the Assurance Job Loss Protection, this program first appeared following the 2008 recession and has been revived for the recent pandemic. 

As part of this auto loan relief program, consumers who bought or borrowed a car after March 14 can have up to 6 payments made by Hyundai. They can also request payment deferment that lasts for up to 90 days.

The Assurance Job Loss Protection program is set to run until April 30 and applies to everyone who purchases a Hyundai through eligible finance programs. It also extends to Genesis, the luxury division of Hyundai Motors that is responsible for new vehicles such as the 2020 Genesis G90.

If the pandemic continues to grow in scale and severity, the program may be prolonged, although only time will tell.

Nissan

Nissan is following in the footsteps of many major creditors and lenders by working with customers on a case by case basis. If you’re feeling the strain of the crisis, whether because you’ve lost some or all of your income or your expenses have increased, you can contact them and request some relief.

For borrowers struggling to meet monthly payments, Nissan offers deferred payments, but only if hardship can be proved. You likely won’t be offered anything just because you ask for it and must show that your financial situation is worse now than it was before the financial crisis.

The same applies to all Infiniti car owners, which is Nissan’s luxury brand.

Kia

Kia announced that all 0% APR borrowers could defer payments for up to four months. Borrowers who don’t qualify for this can still request deferment of up to 30 days on 3 different occasions.

However, as with Nissan and many other providers, borrowers need to prove that they are experiencing hardship to be offered this auto loan relief.

General Motors

GM has seen some pretty hefty losses during the financial crisis, and this is despite the fact that it began the year on a high note, making noticeable gains that were all but wiped out in the first couple weeks of March.

GM is offering a few different options to keep consumers happy and to ensure cars are still driven out of the showroom. If you already have a finance program with General Motors, and you’re experiencing hardship, you can contact GM directly, tell them what you’re going through, and get assistance.

The GM OnStar program has also been activated for all current owners. This program offers 24/7 emergency assistance and can help you get to a hospital in your time of need.

If you need a new car, you can get 0% APR for up to 84 months on most GM manufactured vehicles.

Fiat Chrysler

Fiat Chrysler is another brand that began 2020 with a bang and then quickly suffered a substantial slump. To counteract this, it has improved its online offerings, allowing all consumers to purchase a brand-new vehicle online and to benefit from improved financing offers when they do.

In addition, Fiat Chrysler is assisting current owners by making it easy for them to pay their bills.

If you have a car made by this leading manufacturer and you’re struggling to make payments, contact them directly, tell them about your financial hardship, and they may offer to help you with deferred payments and other solutions.

Financial Crisis Auto Relief: Alternative Options

Contrary to what you might think, lenders are not desperate to get their hands on your collateral. The best outcome for them is that you meet your payments and they get every penny of the vehicle’s value along with the interest.

If you default and they are forced to repossess, they need to pay for the repossession, deal with the extra paperwork and hassle, and eventually sell the car for much less than it is worth. They can still chase you for what you owe, but they know they probably won’t get it, making repossession something that lenders are keen to avoid.

When you’re struggling to make your payments, be honest with them, lay it all on the line, and find a compromise. They will probably be a lot more forgiving than you expect, especially during the crisis, when everyone is more understanding and willing to help.

Unfortunately, you don’t have many other debt relief options when it comes to auto loans, as it doesn’t make sense to do a balance transfer and debt settlement simply doesn’t work here. But if you contact your lender, they’ll help you find a solution.

You can think about returning the vehicle, as well. When you lose your job and your income, and you no longer need to drive several miles to and from work every day, what’s the point of owning a car that costs you tens of thousands of dollars and leaves you with a substantial debt?

2020 Financial Crisis Auto Loan Relief is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

The Worst Cities to Own a Car

The Worst Cities to Own a Car

The number of Americans driving to work alone is on the rise, according to data from the U.S. Census Bureau. With the increase in drivers comes traffic, which means more time and money spent idling in cars. Some cities are better equipped to deal with the mass of drivers, managing to keep traffic delays and congestion to a minimum. Other cities are equipped with walkable streets and reliable mass transit options, making car ownership less necessary.

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We considered these and other factors to find the worst cities to own a car. Specifically, we looked at hours spent in traffic per year for the average driver, the annual cost of traffic for the average driver, the rate of motor vehicle theft, the number of repair shops and parking garages per driver, the commuter stress index and the non-driving options a resident has for getting around. To understand where we got our data and how we put it together to create our final ranking, see the data and methodology section below.

Key Findings

  • Cities on the coasts â€“ The entire top 10 is comprised of cities on or close to the coasts. This makes sense as many of the largest cities in the country are located on the coasts. Plus, on the East Coast in particular, these cities tend to be older which means they were not built to handle car traffic.
  • Grin and bear it – Traffic can get pretty bad. However, in some cities getting around by car is just about the only option you have if you want to leave your house. Thus some cities with really bad traffic like Los Angeles or Long Beach didn’t quite crack the top 10.

The Worst Cities to Own a Car

1. Newark, New Jersey

Brick City tops our ranking of the worst cities to own a car. What’s tough about being a car owner in Newark is the traffic. It’s part of the New York City metro area which has 19 million people, 5 million of whom drive to work. Newark is stuck right in the middle of this bumper-to-bumper traffic. Plus, if you’re a car owner in Newark, the risk of having your car stolen is much higher than it is in other cities. Newark ranks eighth in the country for motor vehicle thefts per 1,000 residents.

Related Article: The States With the Worst Drivers

2. San Francisco, California

The City in the Bay grabs the second spot for worst places to own a car. Being stuck in traffic costs the average commuter in San Francisco $1,600 per year. That cost includes both the value of the time spent in traffic and the cost of gas. SF is also one of the 10 worst cities for motor vehicle thefts per resident, another reason to forgo car ownership.

3. Washington, D.C.

The District and the surrounding metro area sees some of the worst traffic in the country. The average D.C. commuter spends 82 hours per year in traffic. Depending on how you slice it, that’s either two working weeks or almost three-and-a-half days of doing nothing but shaking your fist at your fellow drivers. That traffic is equal to an annual cost of $1,834 per commuter.

4. Oakland, California

One argument against car ownership in Oakland is the crime. There were almost 6,400 motor vehicle thefts in the city of Oakland or 15 auto thefts per 1,000 residents. That’s the highest rate in the country. The average Oakland driver can also expect to spend 78 hours per year in traffic. On the plus side, if something goes wrong with your wheels in Oakland, it shouldn’t be too difficult to get it fixed. There are more than six repair shops per 10,000 drivers in Oakland – the highest rate in the top 10.

5. Arlington, Virginia

As previously mentioned, the Washington, D.C. metro area has the worst traffic in the country. Unfortunately for the residents of Arlington, they are a part of that metro area. They face the same brutal 82 hours per year spent in traffic, on average. It costs Arlington residents $1,834 per year, on average, waiting in that traffic. For residents of Arlington, a car is more of a necessity than it is for people living in D.C., which is why it ranks lower in our study.

6. Portland, Oregon

Of all the cities in our top 10, Portland is the least onerous for the driving commuter. Commuters driving around the Portland metro area can be thankful that, on average, they spent only 52 hours per year in traffic. That traffic still costs each driver about $1,200. However, drivers in Portland looking for a parking garage may be out of luck. Portland has the second-lowest number of parking garages per driver in our study, and if you are looking to get your car fixed, Portland ranks in the bottom 13 for repair shops per capita.

7. Anaheim, California

Anaheim commuters are well-acquainted with traffic. Anaheim (and the rest of the Los Angeles metro area) ranks third in average hours per year spent in traffic, first for commuter stress index and fifth for annual cost of idling in traffic. Anaheim only ranks seventh because Walkability.com gives the city a 46 out of 100 for non-driving options. That’s the lowest score in our top 10 meaning, while owning a car here is a pain, not owning one makes getting around a true struggle.

8. New York, New York

New York is the rare American city where public transportation is usually your best bet for getting from point A to point B. All that accessibility makes car ownership unnecessary here. For New Yorkers who do drive, the traffic is not pleasant. New York drivers spend $1,700 per year, on average, waiting in traffic. That’s the third-highest cost in our study.

Not sure if you’re ready to buy in NYC? Check out our rent vs. buy calculator.

9. Seattle, Washington

Seattle has pretty bad traffic. Commuters here probably aren’t surprised to hear the average driver spends 63 hours per year in traffic. And coupled with the traffic is the high number of motor vehicle thefts. Seattle has the fourth-highest rate of motor vehicle thefts per 1,000 residents in the country.

10. Boston, Massachusetts

Boston ranked well in our study on the most livable cities in the U.S. partially based on how easy it is to get around without a car. After New York and San Francisco, Boston is the most walkable city in the country, making the cost of having a car one expense which Bostonians can possibly go without. Although occasionally maligned, the Massachusetts Bay Transit Authority is a great option for commuters who want to avoid the 64 hours per year Boston drivers spend in traffic.

The Worst Cities to Own a Car

Data and Methodology

In order to rank the worst cities to own a car, we looked at data on the 100 largest cities in the country. Specifically we looked at these seven factors:

  • Average total hours commuters spend in traffic per year. Data comes from the Texas A&M Transportation Institute 2014 Mobility Score Card.
  • Cost of time spent in traffic per person. This measures the value of extra travel time and the extra fuel consumed by vehicles in traffic. Travel time is calculated at a value of $17.67 per hour per person. Fuel cost per gallon is the average price for each state. Data comes from the Texas A&M Transportation Institute 2014 Mobility Score Card.
  • Commuter stress index. This metric is developed by the Texas A&M Transportation Institute 2014 Mobility Score Card. It measures the difference in travel time during peak congestion and during no congestion. A higher ratio equals a larger difference.
  • Non-driving options. This metric measures the necessity of owning a car in each city by considering the city’s walk score, bike score and transit score. We found the average of those three scores for each city. Higher scores mean residents are less reliant on cars. Data comes from Walkability.com.
  • Motor vehicle thefts per 1,000 residents. Data on population and motor vehicle thefts comes from the FBI’s 2015 Uniform Crime Reporting Program and from local police department and city websites. We used the most up to date data available for cities where 2015 data was not available.
  • Number of repair shops per 10,000 drivers. Data on drivers comes from Texas A&M Transportation Institute 2014 Mobility Score Card. Data on repair shops comes from the U.S. Census Bureau’s 2014 Business Patterns Survey.
  • Parking garages per 10,000 drivers. Data on drivers comes from Texas A&M Transportation Institute 2014 Mobility Score Card. Data on parking garages comes from the U.S. Census Bureau’s 2014 Business Patterns Survey.

We ranked each city across each factor, giving double weight to non-driving options and half weight to motor vehicle thefts per driver, repair shops per driver and parking garages per driver. All other factors received single weight. We then found the average ranking across each city. Finally we gave each city a score based on their average ranking. The city with the highest average received a score of 100 and the city with the lowest average received a score of 0.

Questions about our study? Contact us at press@smartasset.com.

Photo credit: Â©iStock.com/seb_ra

The post The Worst Cities to Own a Car appeared first on SmartAsset Blog.

Source: smartasset.com

How To Get The Most Out Of Your Auto Insurance Coverage

Recent data suggests that the average driver will spend close to $100,000 on car insurance over their lifetime. That’s a staggering sum of money, especially when you consider estimates that suggest Americans will pay over $500,000 in that time just to own, operate, and maintain a car.

$100,000 is a lot of money to spend on something that you may never benefit from, something that you’re only buying because your state authorities told you too. But while car insurance policies are essential, the amount that the average consumer spends on them is not.

In this guide, we’ll look at the ways you can save money on auto insurance premiums and get the most value out of this necessary expense.

Build Your Credit Report

Never underestimate the value of a high credit score and a clean credit report. Not only can it help when applying for a car loan, increasing the value of the car you can purchase and decreasing the interest rates you’re charged, but it will also reduce your car insurance rates.

There is no easy and quick way to turn a bad credit report into a good credit report, but there are a few simple changes you can make that could increase your score enough to make a difference. These include:

  • Stop applying for new lines of credit.
  • Become an authorized user on a respectable user’s credit card.
  • Increase credit limits on your active credit cards.
  • Pay off as much debt as you can, focusing on credit cards and personal loans first.
  • Don’t close your credit card accounts after clearing them.

If you don’t have any credit at all, which is true for many teen drivers getting behind the wheel for the first time, try the following options:

  • Credit builder loans
  • Secured credit cards
  • Lending circles

Choose Your Car Carefully

A new car is a great way to get a high-tech, customized vehicle, but it’s not ideal if you’re looking to save on insurance costs.

New vehicles cost more to insure because they are a greater liability, with more expensive parts and greater overall value. If you want to save on your auto insurance coverage, look for a car that is at least a few years old, has a number of safety features and a high safety rating.

The cheaper, the better, but only to a point. You want something that won’t leave you in complete financial ruin if it’s wrecked in a car accident and you don’t have the insurance to cover it, but something that won’t breakdown every few miles and leave you stranded and broke every other week.

Drive Safely and Prove Your Worth

Your driving record is just as important as your credit report, if not more so. The more at-fault accidents, traffic tickets, and insurance claims you have, the higher your car insurance rates will be.

A single conviction won’t last forever and the impact will eventually dissipate, so even if you have a few blemishes on your record now, just keep driving safely and you’ll be able to reap the benefits before long.

It takes time to prove your worth to insurance companies, but there are a few things you can do to expedite this process. The first is to take a defensive driving course. In some states and for some demographics (mostly seniors and young drivers), you’ll be offered a discount for completing one of these courses.

The next step is to consider a usage-based program. These are offered by most major insurance companies and can track your driving habits to determine what kind of driver you are. If you’re driving safe and doing very low mileage, you could start seeing some noticeable changes in just a few months. The majority of providers will even give you a discount just for signing up.

Pay Everything Upfront

Most policyholders pay their premiums monthly and it may seem like that’s the best thing to do. $100 a month seems infinitely more manageable than $1,200 a year. 

It is an attitude that many people have, and it’s one that often leads to debt and poor decisions.

Millions of Americans have credit card debt because a $200 monthly payment seems more achievable than a $5,000 payoff, even though the former carries a phenomenal interest rate. It’s also why countless first-time buyers rush into getting mortgages with small down payments and high-interest rates, even though doing so could mean they are paying twice as much money over the term.

Whenever you can benefit from making an upfront payment, do it. This is true for your loan debt and credit card debt, and it’s also true for your car insurance premiums.

Many insurance providers offer you an upfront payment discount of up to 5%. It doesn’t sound like much, but every little helps. If you have a $3,000 car insurance policy, that 5% adds up to $150. Add a few more discounts and you can save even more money and make an even bigger dent in your insurance rates.

Combine Policies and Vehicles

Insurance companies that offer multiple types of insurance tend to offer discounts when you purchase several products from them.

Known as multi-policy discounts or “bundling”, these offers are common with homeowners insurance and auto insurance, but they are also offered with renters insurance and life insurance.

You can combine several vehicles onto the same auto insurance policy, as well, saving much more than if you were to purchase separate policies.

These discounts are essential for multi-car households, but they are not limited to cars. Many insurers will also let you add boats, ATVs, motorcycles, and other vehicles onto the same policy.

Shop Around

Before you settle on a single policy, shop around, compare as many car insurance quotes as you can, try multiple different insurance options (uninsured/underinsured motorist coverage, comprehensive coverage, collision coverage) and make sure you’re getting the lowest rates for the best cover.

Too many drivers make the mistake of going with the same provider their friends or parents have; the same provider they have used for a number of years. In doing so, they could be missing out on huge savings. 

You could be forgiven for thinking that all providers offer similar rates and that the difference between them is minor. But regardless of your age, gender, and state, the difference between one provider and the next could be up to 200%!

Check if You’re Covered Elsewhere

Car insurance companies offer a number of add-ons and optional coverage options. These are enticing, as they cover you for numerous eventualities and some of them cost just a few dollars extra a month. But all of those dollars add up and could result in you paying much more than you need for cover you already have.

Roadside assistance is a great example of this. It will help you if you are stranded by the side of the road, assisting with services such as tire changes, fuel delivery, towing, and more. But if you have a premium credit card or are a member of an automobile club, you may already have that cover.

The same goes for rental car coverage, which is often purchased at the rental car counter. Although it has its uses, if you have an auto insurance policy, travel insurance, and a premium credit card, you’re probably already covered. In fact, many Visa credit cards offer this service completely free of charge when you use your Visa to pay the bill, but only if you reject the waivers sold by the rental car company.

Bottom Line: Best Auto Insurance Companies

​Car insurance coverage varies from state to state and provider to provider. There is no “best” company, as even the ones with consistently affordable rates will not be the best option in all states or for all demographics.

In our research, we found that GEICO was consistently one of the cheapest providers for good drivers, bad credit drivers, and even high risk drivers. GEICO also offers personal injury protection, collision insurance, medical payments, uninsured motorist coverage, and more, making them the most complete provider for the majority of drivers.

However, in some states, local farm bureaus come out on top, offering very cheap bodily injury liability coverage and property damage liability coverage, and giving policyholders a level of care and attention that they might not find with the bigger, national providers. USAA, which offers cheap car insurance to members of the military, also leads the way in the majority of states, but only for those who meet the criteria.

Simply put, there is no right insurance provider for you, just like there is no right coverage. That’s why it’s important to shop around, chop and change your coverage options, and don’t assume that any type of coverage or provider is right for you until you’ve looked at the numbers.

 

 

How To Get The Most Out Of Your Auto Insurance Coverage is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

States With the Worst Drivers – 2016 Edition

States With the Worst Drivers

It is common occurrence on American highways for near-accidents to occur. It is also a common occurrence on American highways for people in near-accidents, to look at the license plate of the near-accident-causer and think to themselves, “Oh, well of course they’re from Massachusetts.” Or some other state. It seems like almost every state has a reputation for having terrible drivers. Thanks to data from the National Highway Traffic Safety Administration we can confirm some of those myths and dispel others.

Looking to move? Check out mortgage rates in your new area here.

According to the National Highway Traffic Safety Administration around 32,000 people were killed in vehicle-related incidents in 2014. Of course some incidents are genuinely accidents, while some are clearly the fault of one driver, like in the event of drunk driving. But deaths and DUIs are not the only metrics to measure bad driving, people who receive speeding tickets or do not have automobile insurance can also be considered negligent drivers.

To find the states with the worst drivers SmartAsset looked at number of drivers, DUI arrests, people killed, google trends in speeding tickets and percentage of people who have auto insurance. To find out how we put all these numbers together to create our index please read the full methodology below.

Key Findings

No Massachusetts. Boston drivers usually have a reputation as bad drivers but the numbers we analyzed don’t bear that out. Massachusetts ranks 48 on our list. While we have no data on non-fatal accidents, the fact that they lead the nation in insured rate is a positive sign.

Be careful when driving in the southeast. Maybe it’s the heat causing road rage, but four out of the top ten states in our study are located in the southeast.

States with the Worst Drivers

1. Florida

Florida is often plagued with a reputation for bad drivers. The numbers seem to show that this might, in fact, be true. Floridians google “speeding tickets” and “traffic tickets” more than any other state. They also have the second lowest number of insured drivers in the nation.

2. Mississippi

Another southern state and another state in which one ought to be extra careful when driving through. Mississippi had the 5th highest deaths resulting from vehicular incidents. One area where Mississippi can improve is in DUIs. Mississippi had the 12th highest rate of DUI arrests per driver in the country. Like Florida relatively few people are insured. They rank 3rd worst in that category with only 77% insured.

Buying car insurance? Avoid these 6 mistakes.

3. Oklahoma

Continuing on the theme of states with low insured driver rates, Oklahoma has the least. Only 74% of drivers in Oklahoma are insured. It does not get much better for the state in the other categories we looked at. They have one of the 15 worst scores in DUIs per thousand drivers (7.74), number of people killed per thousand drivers in vehicular incidents (.21) and rate of googling parking and traffic tickets (52.13).

4. New Jersey

The Garden State has the infamy of being the state with the second most deaths per driver at 0.62. New Jersey drivers are more likely to be insured than some of the other states on our list. New Jersey drivers are insured at a rate of almost 90%, coming in 22nd on our list.

5. Delaware

New Jerseys neighbor and rival for worst drivers in the northeast, Delaware is unfortunately the only state with more deaths per driver than New Jersey. One curious statistic is that while Delaware has the lowest DUI rate per driver, 40% of deaths occurred when the driver was above the legal limit for drinking, which is the 4th highest rate in the country.

6. Alabama

Another southern state and a similar story to the others with pretty bad scores all around. One bright spot – Alabama has the 4th best score with only 1.42 DUI arrests per thousand drivers. Like Delaware, though, that statistic does not tell the whole story, 33% of deaths in Alabama resulted from a driver being over the legal alcohol limit.

7. Vermont

Vermont leads the nation in DUIs per driver with 50 per thousand drivers. However, they also have the lowest percentage of deaths resulting from drunk driving, at 20%.

8. Tennessee

Tennessee is one of the least insured states in the country, with 20% of people not having car insurance. Tennessee also has the 18th highest number of deaths per thousand drivers. One positive is that they are in the better half of the country for DUI per thousand drivers at 5.7.

9. Texas

Tragically for Texas it has the highest percentage of deaths coming from drunk drivers at 40% and yet it is in the better half of states for DUI arrests. Recent news that Uber and Lyft will both be leaving Austin may have an impact. According to MyStatesman, Austin only has permits for 756 legal taxis and is hoping to increase that to 1,161. But for a tech hot-spot with a population of 850,000 even this may not be enough.

10. Nevada

Nevada is the 3rd worst state for traffic and speeding tickets (when comparing googling trends) as well as being the 17th worst state for DUIs. The good news is that 88% of Nevada drivers are insured.

States with the Worst Drivers

Data and Methodology

In order to find out which state had the worst drivers SmartAsset collected data across 4 metrics.

Percentage insured. Data is taken from the Insurance Research Council.

DUI per thousand drivers. Number of drivers is taken from the Federal Highway Administration. Number of DUIs is taken from the State Justice Department.

Deaths per thousand drivers. Data is taken from the Fatality Analysis Reporting System, which is part of the National Highway Traffic Safety Administration.

Google trends on driving tickets. This data is the average of the scores each state got in google trends for the 8 phrases: speeding ticket, “speeding ticket,” speeding tickets, “speeding tickets,” traffic ticket, “traffic ticket,” traffic tickets and “traffic tickets.”

We then indexed each factor for every state giving equal weighting and then finding the average score per state to create the final index.

Questions about our study? Contact us at blog@smartasset.com.

Photo credit: Â©iStock.com/Ben Harding

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How COVID-19 is Affecting Auto Loans

COVID-19 is having a massive impact on the global economy and very few industries have been untouched by it. If your business relies on employees working in a physical space and profits only when people are willing to shop and spend, there’s no escaping it. 

It’s no surprise, therefore, that the auto industry has been so negatively affected. In a recent guide, we looked at the many auto loan relief options that manufacturers offering in light of the coronavirus. In this guide, we’ll highlight the ways this industry has been stung by the pandemic and look at what it means for the future of the US automobile and car financing sectors.

How is the Coronavirus Affecting Car Sales?

The automobile manufacturing industry experienced a minor surge at the beginning of 2020 but COVID-19 began to impact sales heavily in March. Many companies, Fiat Chrysler and General Motors included, began the year with strong momentum behind them, but March hit them hard and negated all the gains made during the first two months.

Both of these companies recorded losses for the first quarter of 2020, with Fiat Chrysler losing 10% in total.

Toyota, one of America’s biggest manufacturers, also recorded massive losses for March, with daily sales dropping by nearly a third during this month.

All of this is to be expected. The US has yet to announce the sort of national lockdowns we have seen in countries like the United Kingdom, Italy, Spain, and Greece, but many citizens are in self-isolation, countless businesses have shut their doors, and there are fewer cars on the road as a result.

Combine this with the fact that people are losing their jobs and worrying about their futures, and it’s easy to see why car sales have been affected so severely. 

What are Manufacturers Doing About It?

Automobile manufacturers have moved quickly to stem the rising tide of financial devastation caused by COVID-19. Fiat Chrysler, for instance, is offering improved auto loan conditions to convince consumers to make sizeable purchases and keep the wheels turning. It has also made it easier to purchase a car for those in self-isolation or lockdown.

You can now buy a Fiat Chrysler online, with options for trade-ins, auto loans, and pretty much everything else you would get when buying in person.

They’re making it easier for you to buy because they need you to make that commitment. At the same time, the production of many new vehicles has been halted.

While some plants and showrooms are still open in the United States, Europe has experienced an almost continent-wide shutdown, leading to a decreased demand. 

Manufacturers are also anticipating that things will get worse, as many experts predict that the USA will experience a spread similar to that of Spain and Italy.

How Has COVID-19 Hurt the Automobile Industry?

We have already touched upon some of the ways that COVID-19 has impacted the automobile industry, but the problem goes far beyond people not being able to make it to their local showrooms. Furthermore, if events in Europe are anything to go by, the problems will only get worse and it could be several years before the automobile sector recovers.

Here are a few reasons the industry has been hit hard:

Uncertainty

There is a genuine fear that the COVID-19 pandemic will remain for all of 2020 and even beyond that. It seems unlikely that it will last for that long, but if the country doesn’t go into lockdown and a vaccine isn’t produced, it’s possible. 

With this in mind, many consumers are putting off buying new cars out of fear that they simply won’t need them. New cars depreciate rapidly and can lose 20% in the first year. What’s the point of spending $30,000 on a new car if it will be worth $24,000 by the time you actually get behind the wheel?

Struggling Stock Markets

The stock market doesn’t just impact big companies and investors. It also affects average American families who have their money tied into savings accounts, stocks, and pensions. Savers have lost a lot of money and are worried that they’ll lose even more in the near future, making buying a $30,000+ vehicle incredibly reckless. 

Price of Gas

One of the few things that the automobile industry has on its side is the price of fuel, which has plummeted in the past few weeks. The problem is, no one cares about the price of fuel when they’re stuck inside the house worrying about their health and their jobs.

Closed Plants

Automotive plants can’t simply shut down for a few weeks and then start up again when everything has cleared up. Many plants were already struggling to keep things together and once production stops and their profits disappear, they may close down entirely, taking hundreds, if not thousands of jobs with them. 

Bottom Line: Car Sales After COVID-19

It’s highly likely that the hard times will continue for the manufacturing industry. As the coronavirus continues to spread across the country, manufacturing plants will struggle to retain employees, showrooms will shut, and fewer Americans will be willing to pay the $30,000+ required for a new vehicle.

Whether this impacts the future price and availability of automobiles remains to be seen, but it’s highly likely that we’ll see some massive changes in this industry. America’s best-loved manufacturers will lose millions and could be sent to the brink of financial destruction, while many salespersons and mechanics will likely lose their jobs as demand drops and garages/showrooms close down. 

 

How COVID-19 is Affecting Auto Loans is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How to Get Cheap Car Insurance

How to Get Cheap Car Insurance

For many people, car insurance is a major expense category in the household budget. And because it’s against the law to drive without car insurance, it’s not a budget item that can be eliminated unless you’re willing to go car-free. That doesn’t mean, though, that you’re stuck paying sky-high rates. Here’s how to get cheap car insurance. 

Learn about personal loan rates. 

How Insurance Companies Set Car Insurance Rates

Like health insurance, car insurance comes with both premiums and deductibles. The premiums are what you pay the insurance company every month to maintain your coverage. The deductible is what you’ll pay when you start making claims, up to a certain annual cap of, say, $1,000.

It’s worth noting that most people who say they want cheap car insurance mean that they want car insurance with low monthly premiums. But, as with health insurance, there’s a risk to having a policy with low premiums and a high deductible. In the event of a serious accident, you’ll have to meet that deductible. So, one way to get lower premiums is to opt for a higher deductible, but this is only a safe strategy if you have enough liquidity to cover your deductible in the event of an accident.

When car insurance companies set insurance premium rates they take several factors into account. These include applicants’ age, gender and driving history, as well as the type of car the applicant drives and the driver’s state of residence. While you can’t change your age, there are other steps you can take to get favorable rates from car insurance companies.

Types of Coverage

How to Get Cheap Car Insurance

Insurance companies charge more for comprehensive car insurance than they do for basic coverage. In most states you’re required to have liability insurance to cover any damage you do to another car or driver. The extent of that coverage requirement varies by state. In most states, you’re not required to have insurance to cover damage to your own car, or injuries you might suffer in an accident.

If you choose to add insurance coverage for yourself, you can opt for comprehensive coverage or collision coverage. Collision coverage, as the name indicates, covers damage from an accident with another car or an object, and in the event that your car flips. Comprehensive coverage covers things like theft, vandalism and natural disasters, too.

So, while you’ll almost definitely need to buy liability coverage to cover other drivers’ damages, you might not need to buy physical damage coverage for your own vehicle. It will depend on the terms of your lease if you’re leasing a car, and on your own assessment of the risks you face.

If you’re buying a valuable new car, you’ll probably want comprehensive coverage. If you’re paying cash for an older, used vehicle, you can probably get away with a more basic level of coverage. Whatever insurance option you choose for yourself, be sure to comply with state laws relating to liability insurance for any damage you might do to another driver. Once you have a car insurance policy, carry proof of insurance with you in your vehicle at all times. 

How to Get Cheap Car Insurance Rates

How to Get Cheap Car Insurance

In the long term, one of the best ways to get cheap car insurance is to be a safe, responsible driver. The worst drivers have high rates because the insurance company needs financial compensation for the high likelihood that it will have to pay out in the event these drivers get in an accident. If you have a spotless driving record, keep it up. If you have some accidents or tickets in your past, they shouldn’t drive your rates up forever. If it’s been a few years since your last incident, you can try calling your insurance company and asking for a lower rate, using your recent, safe driving record as a bargaining chip.

Another way to get cheap car insurance is to use the same insurance company for more than one type of insurance and get a discount for your loyalty. For example, you can contact the insurance company that provides your homeowners insurance, life insurance or motorcycle insurance and ask if the company can give you a good deal on car insurance. If you have more than one car, you can bundle the insurance coverage on both vehicles.

Your credit score will also affect your car insurance rates, just like it affects the rates you’re offered when shopping for a mortgage. If your credit has improved since you last bought car insurance, you may be able to negotiate your way to cheaper car insurance. And if you pay your car insurance premiums and bills on time and in full, you’ll build up goodwill with your insurer and might qualify for promotional rates.

If you don’t drive very much during the year, you might get cheaper car insurance from a usage-based plan than you would from regular car insurance. Track your mileage before you start shopping for car insurance and see if your low mileage makes you eligible for a better deal.

If you’re under 25, you’ll pay higher premiums, all things being equal. That’s because insurance companies judge young drivers to be riskier drivers. You can get lower rates by joining your parents’ plan, or by using your good grades to get a discount on rates, if your insurance company offers that option. Once you reach your mid-20s there’s no reason to keep paying the high rates that insurance companies levy on young drivers. You can ask your insurance company to lower your rate, or shop around for insurance from another provider.

Finally, the type of car you drive can affect your car insurance rates. Big, powerful and flashy cars are more likely to trigger high car insurance rates because the insurance company assumes you’ll be more likely to speed in that kind of vehicle, and that the vehicle will be a target for theft. Vehicles with high repair costs (such as foreign-made cars) may be more expensive to cover, too. In some states, having a used car will mean lower rates because rates are affected by your car’s replacement value. But in other states, rates are based on vehicles’ safety features, so having an older car won’t necessarily help you get cheap car insurance. If your car has special safety and/or anti-theft features, you may qualify for cheaper car insurance on that basis.

Bottom Line

If you don’t have a vehicle or you’re thinking about getting a new (or used) car, it may be worth doing some research to find out which kinds of cars will get you the lowest car insurance rates. And if you’re paying a lot for car insurance now, you may be able to get cheaper coverage by negotiating your premiums or switching providers.

Photo credit: Â©iStock.com/andresr, Â©iStock.com/ipopba, Â©iStock.com/kate_sept2004

The post How to Get Cheap Car Insurance appeared first on SmartAsset Blog.

Source: smartasset.com

When Should you Drop Full Coverage on your Car?

Full coverage car insurance covers you for most eventualities, but it is also expensive. You get what you pay for, and in this case, what you pay for is liability coverage, collision coverage, and comprehensive coverage.

The question is, how essential are all of these coverage options and at what point do they become surplus to requirements?

Your insurance coverage is never set in stone. You can increase your coverage as needed and drop coverage when it is no longer needed. Staying on top of everything is just a case of making the right choices at the right time.

What is Full Coverage Auto Insurance?

There are several different types of auto insurance, each covering you for something different. The most important cover is something known as liability insurance, which spans bodily injury and property damage and covers you when you injure another driver or their property.

Liability insurance is required in nearly all states and there are minimum coverage limits in all of them. To make sure you are legal, you need to meet these limits. If you want additional liability cover to protect your personal assets, you can pay more and aim higher.

Collision coverage and comprehensive coverage are also required if you want full coverage car insurance. With collision insurance, you are protected against damage caused to your own property, whether that damage is the result of a road traffic accident or a collision with a wall or guardrail. As for comprehensive insurance, it protects you against vandalism, theft, weather damage, and most of the things not covered by collision insurance.

A full coverage policy should also include some personal injury protection (PIP) cover, whether in the form of medical payments coverage or personal injury protection coverage. Both are designed to help you with medical bills and other expenses resulting from personal injury, while PIP goes one step further and covers you for transportation costs, childcare expenses, and loss of work.

All of these options are part of a full coverage insurance policy. There are also many additional coverage options and add-ons, but these aren’t necessarily part of a full coverage policy and, in most cases, need to be added for an extra cost. These options include:

  • Uninsured/Underinsured Motorist Coverage: Minimum cover car insurance won’t protect you if you are hit by an uninsured driver. It has been estimated that as many as 13% of all drivers on US roads are not insured and, in some states, this climbs as high as 25%. With uninsured motorist coverage, you will be protected for such eventualities.
  • Gap Insurance: When you purchase a brand new car on finance, the lender will often insist on gap insurance. A car depreciates rapidly and if that depreciation drops the value below the balance of the loan, the lender stands to lose out. Gap insurance protects them against such an outcome and covers the difference to make sure they get their money back if the car is written off.
  • New Car Replacement: A new car replacement policy will do exactly what the name suggests, providing you with a new vehicle in the event your current one is written off. Depending on the insurer, there will be limits concerning the age of the vehicle and the number of miles on the clock.
  • Roadside Assistance: With roadside assistance, you will be covered for essential services if you break down by the side of the road. It typically includes tire changes, fuel delivery, towing, lost key replacement, and more.
  • Pet Injury: What happens when your pet gets injured during a road traffic accident? If you have pet insurance, they will be covered through that. If not, many providers will give you a pet injury insurance add-on.
  • Rental Car Reimbursement: If your car is stolen or getting repaired, rental car reimbursement coverage will help you to cover the costs of a short term rental. This insurance option is often fixed at a daily sum of between $50 and $100 and lasts for no more than 30 days.
  • Accidental Death: A type of life insurance that focuses on accidents, paying a death benefit to a beneficiary when a loved one dies in an accident.

When to Drop Full Car Insurance Coverage

The value of the car you drive, along with your insurance rates and your driving record, will impact whether or not you should drop full coverage auto insurance. Take a look at the following examples to discover when this might be the right option for you:

1. Your Insurance Premiums are too High

If your car insurance rates are higher than the size of a payout following an accident, it might be time to trim the fat. Insurance is a gamble, a form of protection. You pay a small sum of money in the knowledge that you’ll be covered for a large sum if something untoward happens. But if you reach a point when your premiums begin to exceed the potential payout, it’s no longer useful.

2. You Have an Old Car

The lower your car’s value, the less you need full coverage car insurance. If you’re driving around in a car that costs less than $1,000 and you’re paying $2,000 for the pleasure, you may as well be throwing your money down a wishing well.

In the event of an accident, you’ll have a deductible to pay and that deductible could be near the value of the car. In such cases, it will nearly always make more sense to stick with minimum insurance and to just scrap your car if anything serious happens.

3. You Have a Large Emergency Fund

An emergency fund is a sum of money you keep to one side to cover you for emergencies, including job issues, medical bills, broken appliances, and car troubles. If you have such a fund available, you have a few more options at your disposal and can consider dropping full coverage.

It will save you money in the long term and if anything happens in the short term, you still have options and won’t be completely financially destitute.

Bottom Line: When It’s Needed

While there are times when full coverage is unnecessary and excessive, there are also times when it is essential. If you have a new car, for instance, you should get all of the cover you can afford, otherwise, you could be seriously out of pocket following an accident or theft.

 

When Should you Drop Full Coverage on your Car? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How to Trade in a Car

How to Trade in a Car

If you have a car that you’ve been driving for a while and you’re ready to trade it in, you might be wondering how to get the best deal. When you’re trading in a car, it’s a good idea to forearm yourself by doing research into your car’s value. Read on for the rest of our tips on how to trade in a car. 

Check out our personal loan calculator. 

Know What Your Vehicle Is Worth

So you want to trade in a car? You’ll have an easier time of it if you know what the car is worth before you head to the dealership. That way, you can negotiate from a position of strength. The classic resource for evaluating a car’s worth is the Kelley Blue Book but there are plenty of other options online, too. You can also search other vehicles of the same make and model that are for sale or have sold recently and assume that your car is worth roughly the same amount.

When you’re in the research phase, remember to take the condition of the car into account. If your car has dings, scratches or stains, you can safely assume that it will sell for less than the same year, make and model of car in better condition. And it’s always a good idea to clean the interior and exterior of your vehicle before taking it to a dealership to trade in.

Related Article: How Much Should I Spend on a Car?

Negotiate

How to Trade in a Car

Once you’ve done your research you should have an idea of how much your vehicle is worth. That’s the number you can fall back on in negotiations with the appraiser at the dealership. When you’re at the dealership, don’t be afraid to mention – or show proof of – the research you did. As when you’re buying a car, you’ll probably engage in some back-and-forth negotiation with the folks at the dealership.

The dealership will probably offer you less than what you saw in the Kelley Blue Book or the numbers you got from the National Automobile Dealers Association or Autotrader. You can counter with a higher offer, but remember that, unlike when you’re buying a car, the dealership has more leverage over you. They know you want to unload your car, get your cash and get out of there. The appraiser also takes factors into account that you might not be aware of and can’t control. For example, if the dealership already has a lot of mid-size sedans, it might not want to buy yours or might not offer as much for it.

You can get appraisals from different dealerships or companies, or offer your car at an auction or an online auction like eBay. You don’t have to go with the first offer you get for the car. If you have the time, feel free to shop around for a better offer. You can also look for dealerships that are offering special promotions, such as a discount on a new car when you trade in an old car.

Related Article: All About Car Loan Amortization

Have a Plan for Your Earnings

How to Trade in a Car

It’s a good idea to have a plan for what you’ll do once you’ve traded the car in and you’ve gotten the money from the dealership. Do you need to buy a new (or used) car or can you do without? Will you use the money you make to pay down student loan debt or credit card debt? Will you bulk up your emergency fund or save for retirement? If you don’t make a plan for what to do with the money you earn by trading in your car, you risk spending it on an impulse purchase or on little treats over time. That’s fine if you can afford it, but if you have debt or savings goals to meet, it’s a good idea to commit to putting your car trade-in dollars toward those goals.

Photo credit: Â©iStock.com/LorenzoPatoia, Â©iStock.com/sturti, Â©iStock.com/tzahiV

The post How to Trade in a Car appeared first on SmartAsset Blog.

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