How To Slash Your Car Insurance Costs Up To 54% In 10 Easy Steps - Part 2

In Part 1, we detailed the first five strategies on how to cut your car insurance costs. In Part 2, we show you the second five.

STEP 6 - Review, Change or Cancel No Fault & PIP (Personal Injury Protection)

No-Fault Coverage, and it's Twin - PIP - started out as great idea's. Your premiums were actually going to be lowered. Then, your State Politicians got involved (at the urging of Insurance Lobbyists, of course) and mucked it up.

You see, no-fault insurance coverage was originally intended to have each individual's losses, covered by their own car insurance company - no matter who was at fault.

Today, in many States, car insurance companies are making a ton of money on no-fault because the insurance companies convinced State law-makers to make "modifications."

Today, because of the these changes, car insurance companies have actually used the no-fault laws to reduce payments on a claim made by a customer, instead of reducing car insurance premiums as it was supposed to do.

So, premiums keep going up-and-up and insurance companies end up paying less for claims - Someone's getting rich on that deal....and it's not you.

And to make matters worse, some States (with really, really talented Insurance Lobbyist's) also require an additional premium be paid on top of the no-fault premium. This beauty is called Personal Injury Protection (PIP).

PIP is a "wide-blanket" of coverage and can provide Collision Coverage, Hospitalization, Social Security Disability, Workers Comp, Personal Disability Insurance & Life Insurance.

The problem with PIP and what it covers is....

You already gave most, if not all, of these coverage's anyway, don't you? So, you're paying twice!

So, you need to do a couple of things:

Google "minimum levels of required auto insurance" to see if No-Fault Insurance and/or PIP Is required in your State;

Then, check your policy. If it's not required by your State to have No-Fault/PIP Coverage and it's on your policy - cancel it. If No-Fault/PIP is required by your State....take the absolute minimum. Here's how.

If you must have No-Fault/PIP, ask for and get a deductible from your car insurance company.

STEP 7 - Cancel Medical Coverage

Medical Coverage, on most car insurance policies, is a promise to pay "reasonable" medical expenses for anyone who is riding in your car should you have an accident...as well as anyone in your car should it get hit by someone else.

Cancel it. You don't need it.

Why is that you say? Well, medical coverage as part of your car insurance policy is a duplicate of your own:

- Medical Plan; - Any Life Insurance Coverage you might have, as well as; - The Liability Sections of almost every car insurance policy written in the U.S.

Think of it this way....Do you have a Health/Medical/Hospitalization Plan thru work or an Association you belong to?

Then why are you paying premiums for Medical/Hospitalization Coverage on your Car Insurance Policy?

Here's what's going to happen when you tell the car insurance company or Agent that you "Don't want the Hospitalization/Medical Coverage." You're going to hear very slick "scare tactics" to help change your mind.

The insurance company employee will say "Well, if you're in an accident, and it's your fault, who's going to cover the medical bills for any injured passengers in your car?"

Here's your answer. Your family is already covered by your Health/Hospitalization Plan. If anybody else is in the car and they're injured - they're covered by your Bodily Injury Liability coverage that you're already paying for....and their own Health/Hospitalization Plan.

So go ahead - save some more money and get rid of this coverage.

STEP 8 - Cancel Death, Dismemberment & Loss of Sight

Do you have any of these coverage's on your existing car insurance policy? If so - cancel them.

And if you're a first time car insurance buyer or, just looking at getting several car insurance quotes, don't let anyone talk you into them!

Why?

Because, these coverage's are an absolute waste of money. Most of these optional coverage's are simply "glorified" life insurance policies with ridiculous provisions and horribly overpriced premiums. If you need life insurance, make it a separate Insurance Policy.

STEP 9 - Cancel The Extras

Do you have "Roadside Assistance" or "Rental Car Reimbursement" on your policy? If so, cancel them.

And again, if you're a first time insurance buyer or getting a few car insurance quotes, don't bother with these coverage's.

Why? Because they're severely overpriced, are rarely ever used, and limit what you can and cannot do.

For instance, some rental car reimbursement" coverage is almost $100 a year for each vehicle on your policy. So if you have two cars, you'll spend almost $2,000 on rental car coverage in the next 10 years - and likely never even use it.

And roadside assistance? The piece-of-mind it offers gets trampled by the premiums the car insurance companies want for this coverage. Roadside assistance is a good idea. But use AAA for a cheaper solution.

STEP 10 - Terminate Comprehensive & Collision Coverage On Older Cars.

If you have an older car - by that I mean one that's worth less than $2,000 wholesale (the amount a car dealer would give you if you were trading it in) cancel any Comprehensive and Collision Coverage you have or decline that option when getting a car insurance quote.

Here's why. If an 8 year-old car and a brand new car have identical damage, the cost to repair both will be identical as well, even though the 8 year-old car is worth next-to-nothing.

You see the cost of a bumper and fender are the same - whether it's for a brand new car, or one that is 8 years-old. That's why your premiums don't go down as the value of the car goes down. Your payments remain almost the same, year-after-year-after-year.

But, the bottom drops-out of what you'll be able to collect on that older car. For instance, if your car is "totaled", your insurance company will only pay you the wholesale value of your car.

So, let's say your car is worth $1,000, but the total damage is more than $4,000, the insurance company is only going to give you a check for $1,000....minus your deductible, of course.

So you might end up getting $500 back. Sounds like a lousy deal....but that's how it works.

So, the rule-of-thumb is this - cancel your comp & collision coverage when your vehicles value is less than $2,000....or you'll be throwing your money away.

Okay - you've jotted down some notes and are ready to make some changes to your car insurance policy. So pick up the phone and start slashing your premiums!

How to lose $20,000 selling your car on-line

You have your car listed for sale on the Internet and it looks like you have an easy sale. The emails are rolling in from interested buyers. But wait, a lot of these interested buyer may have a plan that will take a lot of your hard earned money.

Because we get into the details, there are four rules that you must follow not matter what. If you violate either of these rules you will lose your money:

1) Never accept payment which is not for the exact amount of the sale.
2) Do not assume that any cashier check or money order is valid.
3) Do not assume any payment if valid just because your bank gives you cash for it.
4) Another persons problem is not your problem to solve.

Before I explain these simple rules we will look at two actual emails I received from people wanting to buy my used car. I listed a price above market value as an experiment and did not believe anyone would answer my ad.
Both of these emails had IP addresses from outside the USA. In the first one an address and phone in the USA were given. You cannot rely on IP address, phones or postal addresses for identification of where a purchase is actually from.

First email:

HELLO,

INQUIRY ON YOUR CAR, PLEASE GET BACK TO ME WITH YOUR ROCK BOTTOM ASKING PRICE AND THE PICTURES IF THE CAR IS STILL AVAILABLE.

HAVE A NICE DAY

JAMES THOMAS

[address]

[phone]

In response, I answered using an almost obscene name and told him the car was as described on the web and gave him a price that was higher than what I stated on the web.

If you notice he does not really ask any questions about the car. You can be pretty sure he emails the same email to thousands of people and cannot remember which email is about which car.

Mr. "Thomas" replies:

HELLO,

THANKS FOR YOUR URGENT RESPONCE, HOPE ALL IS WELL WITH YOU. AFTER CONSIDERING THE PRICE, I HAVE ACCEPTED MAKING PAYMENT FOR THE CAR. BUT THE ISSUE IS THAT I HAVE A FRIEND WHO IS OWING ME HE WORKS WITH INTER TRUST FINANCIAL IN CANADA BUT HE IS PRESENTLY ON VACATION IN SAUDI ARABIA. I HAVE CONSIDERED USING THE MONEY ON THIS TRANSACTION, SO HE WILL BE MAKING THE PAYMENT DIRECTLY TO YOU WITH A CASHIERS CHECK, BUT THE MONEY IS IN EXCESS OF THE PRICE OF THE CAR, SINCE WE HAVE AGREED ON US$15, 100 FOR THE PRICE, SO YOU HAVE TO SEND THE EXCESS TO THE AGENT THAT WILL COME FOR THE PICK UP SO THAT HE CAN BE ABLE TO OFFSET SHIPPING CHARGES. THEREFORE, I URGE YOU TO PROVIDE YOUR MAILLING INFORMATION WHICH ARE YOUR LEGAL NAME, HOME ADDRESS, AND PHONE NUMBER SO THAT HE CAN BE ABLE TO MAIL THE CASHIERS CHECK TO YOU VIA COURIER SERVICE. AND ALSO YOU ARE TO STATE THE PRESENT LOCATION OF THE CAR FOR EASY PICK-UP.THANKS AS I WAIT TO RECIEVE YOUR CONSENT ON THIS TRANSACTION SOON.

THANKS AND GOD BLESS

JAMES THOMAS

Here comes the problem. To sell my car to Mr. "Thomas" I will need to violate all four rules I listed above. The bottom line is that Mr. "Thomas" will send me a cashiers for more than the amount of the sale, the bank will give me cash the day after I deposit the cashiers check, I will refund the extra to him (I am not "solving" his "problems"). My surprise will be that in a month or so, my bank will tell me the cashiers check was forged and remove the full amount from my back account; but I have already refunded the extra to Mr. "Thomas" so my bank balance will likely end up well below zero!

If I am lucky, I will be out the $5, 000 and find out before I actually sign the title of my car over to Mr. "Thomas"!

Here is another email which is basically the same. Again, they are not interested in any details of the car, though some scam emails do ask a few questions. They do not specifically mention a cashiers check, but instead refer to a "check payable in the US". The email also implies that the car will need to be shipped to a client. I will not comment on his horrible spelling.

Hello,

my clinet is intrested in your car..if is still avalebbile please contact me. which you will receive a payable check in U.S. Hope to read from you soon.

Regards.

mark

We should add an additional rule, if you are not a professional in the import, export business, do not think about shipping your car overseas. Not for one second. Not even if the "buyer" has arranged for shipping. Even if it were legitimate (and it is not) you would be in for more headaches that you want.

We need to review the 4 simple rules again:

1) Never accept payment which is not for the exact amount of the sale.

Any normal purchaser will make payment to you in the correct amount. If someone has a check for the "wrong" amount it is not your problem to resolve. You are just trying to sell a car, your are not in the banking business! Really you should be selling your car to someone you see in person with cash or a check from a local bank you can verify at their bank.

2) Do not assume that any cashier check or money order is valid.

The FDIC issues regular reports about stolen and forged money orders and cashiers checks. It is not a rare event. You cannot assume any payment is valid unless you personally verify it at the bank that issued the payment, ie: by walking into that bank and cashing it.

3) Do not assume any payment if valid just because your bank gives you cash for it.

Under U.S. Banking Laws, your bank is obligated to "clear" cashiers checks in one business day. That means if you deposit a cashiers check today, your bank must allow you to withdraw cash tomorrow. That does not mean the payment is good. A forged cashiers check can take weeks for your bank to discover. When they do the entire amount plus service charges will be removed from your account! You see the trick?

4) Another persons problem is not your problem to solve.

Many of these scamsters develop involved stories about all kinds of problems they have, in this case a cashiers check for too much money. They offer you a bonus or easy sale for helping them solve the problem. In reality the only problem is that you will lose lots of money trying to "help" them.

Your only problem is to sell your car to an actual buyer, that has actually looked at the car and makes a payment you can actually verify (cash) at their bank. This will never include someone that wants the car shipped somewhere. It will never include someone that has a check of any kind for too much money.

No one will ever pay you an extra $500 much less an extra $1,000 or $5,000 for your car for helping them.

BOTTOM LINE Do not ever involve the "problems" of someone else in your transaction. Do not accept any "cashiers check" as valid -- no matter what the teller at your bank says.
The real question is who would buy a car they do not look at? But if you must sell your car to someone who is not local, please make sure you use an escrow service.