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USED CARS

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USED CARS Powered By Docstoc
					           USED CARS
Save Money Without Compromising Your Driving Experience




                by SAM SAMARGHANDI
                  Disclaimer and Terms of Use

The publisher and author of USED CARS: Save Money Without Compromising Your
Driving Experience have carefully researched the topics covered in this eBook in an
effort to provide valuable and concise information for the consumer. However, the
publisher and author do not guarantee the applicability, completeness or accuracy of
the subject(s) covered in this eBook.

The researched and written information contained in this eBook is intended for edu-
cational and informative purposes only. If you, as a reader, make any decision or
execute any action based upon any information contained in this eBook, you are fully
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The publisher and author disclaim any warranties (implied or expressed), fitness or
merchantability for any purpose or intent. The publisher and the author are not liable
to any party, under any circumstances, for special, incidental, punitive or other con-
sequential damages that may arise directly or indirectly from the use of the material
contained in this eBook which is provided “as is” without warranty. It is recommended
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decision or executing any action based upon the information contained in this eBook.

In addition, the publisher and author do not in anyway guarantee the effectiveness,
performance or applicability of any websites linked to or listed in this eBook. All links
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This eBook is copyrighted to Sam Samarghandi. No part of this eBook may be cop-
ied by any means, changed to an alternative format, reproduced or sold without the
expressed written permission of Sam Samarghandi.
       Table of Contents




Chapter 1: Buying A Used Car

Chapter 2: Used Car Maintenance

Chapter 3: Surviving The Gas Dilemma

Chapter 4: The Do’s & Don’ts Of Driving

Chapter 5: Saving Money on Auto Insurance
                      Chapter 1: BUYING A USED CAR

Buying a car is perhaps one of the most complicated decisions that a person makes and involves
instinctively to the newest models on the market 	
  
a substantial investment of time and hard-earned money. Car enthusiasts are often drawn


due to the notion that “new equals best.” The
desire for “new” may even override the cost or
performance of the vehicle in question. And of
course the pleasurable experience of owning
and driving a new car is undeniable. However,
in these current times of financial uncertainty
and budgeted lifestyles, opting for a used car
frequently proves to be a more responsible and
rewarding decision overall.


Consider the average car-buyer; an individual pursuing an upper -middle-class lifestyle and
requiring a reliable vehicle to get them from point A to point B. Frankly, for this type of consumer,
cost counts. And an affordable car option is preferable to one that serves merely as a status-
symbol. Purchasing a used car (after a proper inspection) is simply a better decision. This chapter
will illuminate the important differences between buying a new and used car.



WHERE TO BUY A USED CAR?                            A geographically convenient dealership will also
                                                    benefit you in the event that you need to make
All across the country you’ll find used car deal-   use of the warranty offered or make changes in
ers with a wide variety of makes and models.        the financial terms.
However, it is highly recommended that you limit
your search to dealerships close to home since




                                                                         ?
you’ll most likely need to make several visits to
the lot before and after you purchase.
Additionally, transporting a vehicle from other
areas of the country will significantly add to
its cost. And in the event that something is
wrong with the vehicle you will want to avoid the
extraordinary inconvenience of having to ship it
back somewhere.
THE ADVANTAGES OF BUYING A USED CAR

(1) The moment you buy a                 have already saved 10-12%          prices. Since the car has
brand new car and drive it off           off of what you’d pay for a new    already passed the majority
the lot, the depreciation of that        car.                               of its depreciation (about
new car is estimated at an                                                  50%) you can expect a similar
average of $3000 regardless              (4) The cost of financing a used   reduction in the auto insurance
of brand or model. Moreover,             car is lower since the cost of     premium.
this car will depreciate by              the car is lower, and you will
approximately 50% in the first           also be saving on the interest     (7) Most used car dealers offer
three years of use. So, it does          that you pay out. This is          discounts upward of 30%.
make good financial sense to             another means of cutting your      Discounts on new cars are
buy a used car rather than a             losses without burdening your      almost never this generous.
new one since the previous               balance sheet too much.
owner of the used car has
already absorbed a major          	
  
portion of the depreciation cost.
Buying a car that is 3 to 4 years
old starts your ownership at the
lower end of the depreciation
rate; the capital erosion would
be decelerated to around 10%.
This means that the cost of
ownership as well as cost of
operation is reduced drastically.
                                         (5) Used cars carry lower
(2) Just compare the price of            registration cost and licensing
a new car to a used one of               fees since these levies are
the same model and you’ll                calculated as a percentage of
get a fair idea of the expected          the current value of the car. As
savings.                                 an example, these costs will be
                                         approximately 50% lower on a
(3) Used cars do not incur               car that’s 3 to 4 years old.
sales tax or other extra
levies with the exception of             (6) The premium calculations
mandatory annual levies such             on a used car are based on
as insurance and pollution               the present value of the car
control. This means that you             and not on the initial showroom
       A FEW DRAWBACKS TO CONSIDER

       Buying a used car will undoubtedly save you money, but it does come with its own disadvantages
       as well. Issues to consider include cost of repairs not covered by a warranty, higher maintenance
       costs and possible replacement of consumables such as tires, batteries and brakes. Also keep
       in mind that new cars come with better safety records because they have more modern safety
       equipment installed. Of course you can always modernize your old car with a part of the money
       you saved on purchase price.


       MAKING A MODEL DECISION

       The decision-making process is a little different    costs. Also, if you can reverse the process, it
       when buying a used car since there are other         can save you a lot of time. Or you can simply
       factors to consider such as reliability. A good      visit a few well-respected used car dealers in
       used car can cost anywhere from $4000 to             your area to check prices and then corroborate
       $6000 depending one make/model, age,                 your research online to confirm which deals are
       mileage and condition.                               the best. This could help you negotiate with the
                                                            dealer and get yourself a better price.
       There are many online resources which you can        Small cars are a better choice since they tend
       use to research in your decision. However, you       to be less expensive, give you better miles per
       should approach online research more with the        gallon (MPG) and cost less to maintain.
       intention of gathering information abut different
       types of cars more than trying to find a specific    When shopping for used car you should look for
       one for purchase. If you narrow it down to a         those that are comparatively young (4 to 5 years
       model you like online you will most likely be able   old) and carry less than 100,000 miles. These
       to find it or something comparable in the vicinity   cars typically rack up lower maintenance costs

	
  
       of your area which would eliminate any shipping      and give you more MPG.


                                                            It’s better to go with a popular model rather
                                                            than a unique one because the spare parts
                                                            would be more abundant, cost less, and thus,
                                                            reduce overhead.
MAKING A CONFIGURATION DECISION

You’ll need to be mindful of maintenance and         the market so for the time being you may want
fuel costs as well as the cost and availability      to focus on gasoline driven, four-cylinder cars.
of spare parts. This will, no doubt, affect your     Besides, the hybrid car market is relatively new
decision between a three-cylinder, four-cylinder     and fool-proof, alternative fuel hybrid systems
or six-cylinder engines, as well as between          are still evolving.
models driven by gasoline, diesel or hybrid
fuel. When in doubt, turn to a trusted individual
with car experience to help you make a well-
informed decision. It is suggested that you
seriously consider going with a four-cylinder or
hybrid since these types of cars offer higher fuel
efficiency. Used hybrids are still not common in


MAKING A TRANSMISSION DECISION

If you’re in the market for a used car with automatic transmission stick to models from more recent
years since older models use up more fuel. The safest bet in terms of cost is a four-cylinder car
with manual transmission which will offer optimum fuel efficiency and moderate driving comfort.
Manual transmission cars are also easier to maintain and repair. And of course many drivers find
manual transmission more fun to drive.


OTHER ASPECTS TO CONSIDER...

---> MILEAGE


---> SUSPENSION


---> TIRES


--->DRIVING


---> PAPERWORK
•MILEAGE: Used car dealers have been known to play down the importance of mileage for their
own benefit, but mileage is a vital indicator of engine life and the average running of a car. Make
sure that the odometer is functioning properly and that the number of miles is realistic in relation
to the age of the vehicle. The mileage for a four-year-old car, for example, should most likely fall
between 30,000-35,000 (about 600 to 800 miles per each month of its life) if it was driven regularly.
An average of less than 100 miles per month indicates that the car’s engine is not primed.
Remember, a car depreciates even when it is not used. Plus, lack of use can lead to inefficient
performance. Conversely, an average of over 1000 miles a month means that the engine has been
overused and is ready for a full overhaul if it has not been done already.




•SUSPENSION: The suspension of a car is an indicator of the riding comfort that you can expect
while riding in it. The suspension consists of four major parts that are located at the four corners of
the car in the form of shock absorbers or struts in addition to smaller additions like the lower-arm in
the front and the steel belts at the rear. There is no proven method of checking these suspension
parts without physically disassembling them. However, you can check the condition of the
suspension by applying your weight to the top of the vehicle on each corner and bouncing it up and
down. Any noise emanating from the suspension at any corner calls for replacement or overhaul.
You can use the replacement time and cost as a factor in your negotiations with the dealer.




•TIRES: Tires are monumentally important since they largely determine the riding comfort, and
more importantly, the safety of the passengers. When considering a particular car, make sure that
the tires do not need replacement in the immediate or near future. It would be impractical to expect
new tires on a used car, however you will need to make sure the current tires can endure at least
another 10,000 miles. In fact, driving a car on worn-out tires is illegal in many states and is highly
risky when traveling over water, snow or oil slicks. A new set of tires normally lasts about 40,000
to 60,000 miles. Conscientious maintenance can stretch this limit by about 50% however. Proper
inflation of tires is a key safety factor. Many tire manufacturers have inbuilt, colored treads that
become evident when the tires need replacement.
•DRIVING: Of course you’ll always want to test-drive a vehicle to gauge its performance,
efficiency, comfort, etc. Make sure to pay attention to pick-up, braking, suspension noises and
speed control.




•PAPERWORK: Once you’ve selected                      	
  
a car make sure that all of the paperwork
pertaining to it is up-to-date and paid for. The
paperwork includes the current auto insurance
policy, registration certificate, pollution-control
documentation, annual tax receipts, and the
present valuation of the vehicle. If any of the
paperwork is missing or outdated you may want
to ask the present owner/ dealer to get the
paperwork updated before you purchase.


Again, it never hurts to consult a trusted and knowledgeable individual before signing on the dotted
line.
                   Chapter 2: USED CAR MAINTENANCE

 Once you buy a car, new or used, it is extremely important that you maintain it properly so that
 you’re able to drive it safely and comfortably; not to mention, optimize the resale value. Car
 maintenance isn’t rocket science but it does require a little technical understanding. This chapter
 details a few things to bear in mind.



 TUNING: Always make sure that your car is properly tuned and that the engine timing is adjusted
 during the tuning process. This will allow your car to run smoothly for a longer period, reduce
 engine wear-and-tear, save you money on maintenance, and give you higher MPG. Tuning is an
 automated process for most modern cars and it is always recommended that you have this done by
 authorized service personnel every time.



 OIL CHANGE: Engine oil is a lubricant within the engine that reduces friction and drives your car.
 The ignition processes that take place in the engine cause the engine oil to thicken up over time
 due to carbon and sluice accumulation. The thickened oil (mixed with carbon silt) causes friction
 and erodes the metallic parts in the engine. If you average 30-40 miles per day it is recommended
 that the engine oil be changed every 2500-3000 miles. On the other hand, if you’ve just returned
 from a long trip where your car averaged 300-400 miles a day it is crucial that you change the
 engine oil immediately because the continual heating of the engine decreases the oil quality.




	
  

                                            AIR FILTER: Gas-powered cars burn a mixture of air
                                            and gasoline to run the engine. Make sure that the air
                                            supply going into the carburetor or the MPFI system is
                                            clear from suspended particles or impurities. Check the
                                            air filter regularly, at least once a month.
TIRES: Tire manufactures have a wide variety 	
  
for you to choose from. However, steel-belted
radial tires are highly recommended since they
give you the best road grip and minimized
friction. This, in turn, provides greater driving
comfort and more miles per gallon. Keeping
your tires properly pressurized will extend their
life beyond the specifications and will also
provide you with optimal riding comfort. When
replacing your tires you should focus more on
their quality and safety features rather than the
price. Tires are your only contact with the road
while driving and any small problem that arises
there can pose a great risk for you or anyone riding with you.


GASOLINE: It is recommended by car manufacturers that you use the specified grade of gasoline
for the type of engine you have. Using a lower grade could result in more carbon deposits inside
the engine and thus more maintenance costs. Likewise, using a higher octane gasoline than
recommended can expedite engine wear-and-tear which would have to pay to fix. Many people
believe they are saving money by using cheaper gas, however all grades would cost you more
or less the same when you factor in “cost per mile”. So choosing appropriate grades saves you
money in the long-run.


BALANCING: Tire balancing is a critical requirement for any car and needs to be performed at
specified periods. Since your car drives across a multitude of terrains and takes bends at various
angles it is highly probable that your tires will become misbalanced often. Balancing promotes
uniform depreciation among all four tires and extends their life.



FLUID LEVELS: In addition to gasoline and engine oil, there are other vital fluids coursing through
your vehicle; gear oil (inside the gear box), brake fluid (in the brake canister), radiator coolant
(in the canister provided), steering fluid (for a power steering system) and grease (on the main
bearings.) Each of these consumable fluid canisters has ingress and egress points and are
consumed at a low rate. It is recommended that you check the levels of these fluids twice a month.
Topping them off regularly helps to keep your car in shape and running smoothly. If you drive
over 1000 miles a month will probably need to check these levels on a weekly basis. These tasks
require only a basic technical competence and you will most likely be able to perform them yourself
in 15 minutes or less.
SERVICING: Service your car at regular intervals to keep it in good working order. This includes
checking the brakes and fluid levels, changing the oil, tuning up the engine. Additionally, washing
your car makes sure that the rubber parts of your suspension system stay lubricated. And of
course it never hurts the resale value to give your car a good shine. Service your vehicle every
1000 miles or every month, whichever comes first.


By now you realize that maintaining a car is a far better option than investing in its repair. Adopt
these beneficial habits and you’ll get the most out of your car, new or used.
               Chapter 3: SURVIVING THE GAS DILEMMA

FOUR-CYLINDER & HYBRID                and are readily available. The     While hybrids are certainly
Gasoline, which is a fossil fuel,     bottom-line will only be evident   the future, the industry is still
may likely become a scarce            after a few years of optimal and   relatively new and the process
resource in the years to come.        recorded use.                      of improving the technology is
For the time being driving a                                             ongoing. There are currently
well-conditioned car with a           In determining which type of       no long-term statistics
four-cylinder engine will help        alternate fuel to go with you      regarding the performance of
you conserve on gasoline.             should investigate as to which     used hybrids. In the meantime
Hybrids run on a combination          align with your lifestyle and      it may be wise to stick with
of gasoline and one of several        motivations. For example,          tradition and opt for the four-
other power sources including         if you operate an electric-        cylinder gasoline-powered
electricity, natural gas, liquefied   powered car most of the            vehicle. In any event, as time
petroleum gas and solar               electricity consumed is still      goes on, both types of cars will
energy.                               generated from fossil fuels and    drastically drop in price.
                                      so the positive environmental
The purchase of a hybrid car          impact is not as significant as
will cost more compared to            you might hope. As another
a gasoline car. But the use           example, a region with an
of alternate fuel may offset          abundance of cloudy weather
the excess of capital outlay,         most of the year, such as
because at this point in time         Seattle, might not be an ideal
all alternate fuels cost less         setting for a solar-powered car.


SAVING ON GASOLINE                                     still encourage this way of filling the tank so that
One of the major costs of driving is gasoline          the car owner saves a little money. You need
and the more you save per gallon the further           to make sure that the self pumping process is
your money will take you. Though they don’t            properly adhered to for the safety of everyone.
usually vary much from one to the other, each          Do not smoke while in close proximity to gas
gas station and each brand of gasoline have a          pumps or your car’s gas tank. It has also been
different pricing structure. Finding the cheapest      suggested, though disputed by some, that using
gas station in your area will be advantageous,         cell phones near gas pumps can be dangerous.
especially if you drive considerable distances on
a regular basis.


Pump your own gas instead of using the service
option offered by gas stations. Although some
states have done away with self-pumping, many
“FILL ‘ER UP”                        DRIVING ON MINIMAL FUEL            in unwanted emissions which
Contrary to what you might           Driving with your fuel gauge       pollute the environment.
think, topping off your car’s fuel   near the “E” mark might seem
tank is not the best option and      economy-conscious, but you         Therefore it is always advisable
actually wastes money.               may be surprised to learn that     to drive your car with the tank
a.      The gas you’re paying        driving on minimal fuel actually   filled to at least 25% capacity.
for is not going into the fuel       costs you more in the long run.    The quality and quantity of
tank completely once the             Additionally, many car owners      gasoline you put into your
nozzle clicks off for the first      who drive infrequently go for      car makes a remarkable
time. In most cases it stays         semi-lengthy periods without       impact on its performance and
in the hose and goes off into        pumping fresh gas into their       maintenance.
the next tank that’s filled or it    tank thinking they are being
enters either the carbon filters     thrifty. Take the following
or vapor tanks of your car or        information into consideration:
the gas station.                     a.       WEAR-AND-TEAR: As
b.      Any gasoline spilled         most technically-conscious
while topping off your tank          car owners know, gasoline is
vaporizes, and despite the           pumped from the fuel tank to
functionality of your vapor          the carburetor or the MPFI
recovery system some of the          system by the use of a fuel
vapor will escape. Gasoline          pump. Less gas in the tank
vapors are highly toxic and          creates a greater pressure
pose a great threat to the           on the fuel pump to bring in
human respiratory system as          more fuel and the pump tends
well as the environment. Gas         to heat up. This heat may
vapors contain many volatile         cause the fuel pump to function
organic compounds which              erratically and will ultimately
are largely responsible for the      shorten its lifespan.
formation of smog.                   b.       MILES PER GALLON:
c.      Make sure your vapor         When you drive with a lower
recovery system is working           amount of fuel in your tank
properly. Failure to do so will      the pressure of the fuel
result in gas residue during         injected into the carburetor is
your drive which may lead            decreased and the fuel pump
to pollution of soil and water       tends to pump in more than
systems.                             is required. This not only
                                     wastes fuel, but also results
             Chapter 4: THE DO’s & DON’Ts OF DRIVING

The mastery of driving an automobile is of paramount importance for the safety of yourself, your
passengers and other drivers you encounter on the road. It will also extend the life of your car and
help you to keep maintenance costs in check. Never forget or disregard the rules you learned in
driver’s education and always do your best to implement them every time you’re in the car. In this
chapter we will briefly discuss a few of them.


a.     ACCELERATION: Gentle acceleration is         b.      TRAFFIC: It is always wise to follow
always recommended whether you are driving a        the motion of the vehicle ahead of you while
small car or a powerful SUV. Otherwise you risk     keeping track of the next vehicle ahead of it.
putting undue stress on the car’s suspension        If you see that the traffic is going to stall take
system. It also wastes gas.                         your foot off the accelerator and come to a stop
                                                    without excessive braking.



c.     COASTING: While driving on the               d.     CARPOOL: Using a car pool is always
freeway accelerate to the necessary traveling       advisable particularly in relation to daily ventures
speed and then ease off the accelerator a little    such as going to work. A carpool not only saves
to coast at that speed. This will help you reduce   you gas money, but slows down the physical
wear-and-tear on your car and also give you         decline of your car and reduces your stress level
more miles per gallon. You will also have better    as a habitual driver. Carpooling also provides
control of your car.                                an opportunity to build and enhance personal
                                                    relationships.



e.    SPEED: Maintain an optimum traffic            f.     FREEWAY DRIVING: While driving
speed in proportion to the traffic conditions in    on the freeway or a highway it is important to
which you find yourself. Driving too fast or too    remember that the risks of accident are far
slow not only increases the risk of accident, but   greater. Remain conscious of your speed
also wastes gas and may lead to overheating of      (which should stay consistent) as well as the
the engine.                                         other drivers around you.
g.     OTHER DRIVERS: Avoid vehicles that            h.      IDLING: If you think you’ll need to leave
are traveling at excessive speeds or at very low     your car idling for more than 90 seconds it is
speeds with respect to the traffic conditions.       best just to switch your car off; beyond that your
Drive in the lane that you think is designated for   engine will heat up unnecessarily. You’ll also be
optimum speed in such conditions.                    wasting fuel since it takes less gas to start your
                                                     engine than your car expends in 90 seconds of
                                                     idling.




i.     PLANNING: Plan your driving excursions        j.      NAVIGATION: If you know or suspect
ahead of time; grouping errands together and         you will be traveling in areas you’re unfamiliar
finding the shortest routes to destinations.         with it would be wise to use a Geographical
                                                     Positioning System (GPS) to help you navigate.
                                                     Many GPS systems can be installed in your car
                                                     easily. Such systems are generally inexpensive
                                                     and will save you a lot of time, money and
                                                     stress.



If you are ever unclear about the rules of the road it never hurts to dust off your driving manual and
take a look. Or in this day and age, just Google it!
        Chapter 4: SAVING MONEY ON CAR INSURANCE


Auto insurance is one of the       Many insurance companies
                                   offer auto insurance and you
                                                                      Several factors affect the
                                                                      amount of money you pay for
most important aspects of car
                                   should thoroughly compare          your auto insurance policy.
ownership. It not only saves
                                   offers from these companies        These factors include the age
you the cost of repairs brought
                                   before making a final decision     and condition of your car, the
on by an accident, but also
                                   on an auto insurance policy.       number of built-in safety factors
covers the medical treatment
                                   There are several websites         and accessories, and the
of anyone injured during the
                                   which specialize in giving you     amount of driving that your car
accident. Driving a car without
                                   comparative figures as well        undertakes on average. In this
insurance is illegal and can
                                   as listing the advantages and      chapter we will highlight certain
have dire consequences in
                                   disadvantages of policies          aspects you should consider
the event of an unforeseen
                                   offered by these various           before finalizing your auto
accident.
                                   companies.                         insurance policy.




a.      DEDUCTIBLES: Raising the deductibles on your auto insurance policy provides you with
a lower yearly premium. If you’re paying the full premium without any deductibles you are actually
spending more than you should. Consider the number of accidents that you may have had in the
last five years. Out of those accidents how many yielded a small enough amount of damage that
you could have paid for it yourself?


You’ll find that the majority of the cost (even up to 80%) was affordable to you without the
assistance of the insurance company. Now consider the amount of money you paid in premiums
with low deductibles in that five-year period. Most likely you will find that the money you paid out in
premiums exceeds the money you would have paid in repairs.


Deductibles are designed to keep your premiums low and reserve your auto insurance for covering
heavy damages. Plus, paying out-of-pocket costs for small repairs instead of filing claims will often
entitle you to a no-claims bonus through your policy.
b.     SAFETY FEATURES: A significant number of safety features installed on your car will often
lead to a discount on your premium. Consult an experienced auto insurance agent to determine
which security devices will bring about these discounts. Here are a few of safety devices which
reduce the liability of an insurance company and thus lower your premium.


•SEATBELTS: These are the primary safety devices of almost all modern automobiles.


•AIRBAGS: Airbags or ABS can be installed under the dashboard, in the steering column,
behind the headrests and in the doors. They are designed to inflate immediately upon impact
and drastically reduce injuries by up to 30%. The more airbags you have installed the lower your
premium will be.


•ANTI-LOCK BRAKES: This special braking mechanism is designed to stop a car instantly without
losing traction and helps a driver to avoid and impending accident.


•ELECTRONIC STABILITY CONTROL (ESC): ESC is a safety feature designed to prevent
single vehicle accidents. ESC ensures that a driver does not lose control at high speeds or on
treacherous terrain by breaking the appropriate wheels at the appropriate time to keep the car
stays on the intended path. For cars that travel mostly on highways or freeways, or in weather
that is mostly humid and moist, ESC is a very useful feature. Research shows that ESC reduces
accidents and fatalities by almost 50%.


c.     NOTIFICATION: When purchasing auto insurance be sure to list and describe all of your
car’s safety features. But make sure that all of these features are working properly. Otherwise an
auto insurance company may reject your claim in the even of an accident where faulty equipment
was determined to be the cause of damage or injury.



d.     COLLISION AND COMPREHENSIVE COVERAGE: Collision covers damages to the
car and the driver in case of an accident while Comprehensive covers loss or damage due
to vandalism, theft, weather corrosion, etc. If you’re financing the purchase of a new car it is
mandatory that you have collision and comprehensive coverage. However it is not absolutely
necessary to have collision and comprehensive coverage on a used car. Depending on various
factors like the area you live in, the amount of driving that you do and the age and condition of
your car, you may opt to drop collision and comprehensive coverage. This will help you to save a
substantial amount of money on the premium.
e.    SURCHARGES: Auto insurance companies often require surcharges to be paid over and
above as a percentage of the premium. These surcharges vary from customer to customer. Here
are a few situations where a surcharge may be levied on your auto insurance premium:


1.    ACCIDENTS: If you’ve been involved in a driving accident of any kind in the past three
years a surcharge will be levied as a percentage of the amount of your premium.


2.    CONVICTION: If you have been convicted of any of the following offenses you will likely be
required to pay a surcharge on your auto insurance premium.
      i.     Failure to report an auto accident or attempting to hide your license number or
              registration number from law enforcement agencies in such an event.
      ii.    Improper driving while passing by playgrounds and schools.
      iii.   Driving under the influence of alcohol or elicit substances.
      iv.    Negligence which results in an accident.


3.    ATTENDING: Leaving the scene of an accident or failing to report it will attract a surcharge
on your auto insurance premium if the incident occurred within the last three years.


4.    RECKLESS DRIVING: If you have been reported for dangerous driving within the last three
years you are likely to incur a surcharge on your auto insurance premium.




f.      NEGOTIATION: Negotiate with all of the auto insurance companies you have short-listed
and go with the one that offers you the best discounts and benefits. You can negotiate using your
driving records, your safety equipment, the amount of mileage you drive and the current condition
of your car. Make sure to ask about all of the discounts for which you qualify. Keep in mind that the
auto insurance industry is highly competitive and these companies need you more than you need
them. At the end of the day, you will be amazed to find them amount of money you have saved on
the initial premium quoted.
g.    COMBINING INSURANCE: Combining your auto insurance and homeowners insurance can
save you a substantial amount of money. Many insurance companies offer two-way discounts on
such combined insurance policies. In fact, you may receive up to a 20% discount on both.




h.     STUDENT DISCOUNTS: Drivers in the late-teens to mid-twenties age group are considered
to be fast-paced, reckless and irresponsible. And auto insurance premiums for these individual
are higher because the probability of claims is higher. However, auto insurance companies offer
favorable student discounts for some drivers in this age group who prove to be responsible and
safe. To qualify for this a student must maintain a minimum grade point average (GPA) of 3.0 and/
or have an impeccable driving record.



i.     AVOID TRAFFIC VIOLATOINS: Tickets for speeding and moving violations stay on your
driving record for a period of three years. The more tickets you receive the more surcharges you’ll
pay on your auto insurance premium.




Adhering to the tips described in this chapter will save you a lot of money on your auto insurance
premiums which can be put to much better use; eventually a new car, for example!

				
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