Think Twice Before Declining The Rental Car Damage Waiver

Many auto renters decline the rental car damage waiver because they think their personal auto policy will cover their use of a rental. While often true, this is not always the case, and you should check with your insurance agent or broker about your policy's coverage before renting a vehicle.

"But, even if your policy includes rentals, there may be costs it doesn't cover," says Bill Wilson, CPCU, director of the Independent Insurance Agents & Brokers of America's Virtual University. "For example, the rental company may well use a more expensive way of calculating vehicle damage than your auto policy and you might be stuck paying the difference."

Also, most policies give the insurance company the right to inspect and appraise damage before repairing or disposing of the vehicle. The rental company is not bound by this and may be eager to rid itself quickly of the auto or return it to service. This can affect whether you're covered. Also, the rental company might insist on immediate payment for damage via credit card surcharge, which could "max out" your card. While most auto policies cover the rental company's loss of income, its "loss of use" calculation might be hundreds of dollars more than your policy's limits. Further, the rental agreement might make you responsible for various "administrative" charges, such as towing, storage and appraisal, usually not covered by auto policies.
"Most alarmingly, rental car companies frequently charge for 'diminished value'-the loss of resale value because of damage to the vehicle-typically not covered by auto policies. Such charges of $5,000 to $8,000 are not uncommon," says Wilson. Further, auto policies usually do not cover damages to motorcycles, RVs and other vehicles, and offer very limited coverage for damage to rented trailers. Additionally, coverage extends only to the U.S. and Canada; policies have deductibles; and insurance company payment to the rental car company may result in future premium surcharges for you.

So before you rent, consult with your insurance agent or broker- and think twice before you rely solely on your auto policy to protect you.


Before you rent a car, consult with your insurance agent or broker-and think twice before you rely solely on your auto policy to protect you.

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New Car Prices, Then And Now

New car prices have certainly changed a lot over the years. While obviously inflation, the cost of energy and a number of other causes have caused automobile prices to skyrocket when compared to the 1970’s, there are also some changes in attitude from automakers which are reflected in modern pricing schemes.

Imagine the year is 1971. Walking into the new Dodge dealership, you see a brand new Charger R/T coupe, which was one of the definitive muscle cars of the era. The price? $4700. A similarly configured Charger, brand new from Dodge today in 2008 will cost in the neighborhood of $30,000. This represents a fairly significant increase. What are some of the factors that caused new car pricing to multiply six-fold?

Inflation only tells half the story. Adjusting that $4700 from 1970 into today’s dollars gives us a price of roughly $21,000. That still leaves us around $9000 short of the current market price for a similar car.
The difference becomes even more pronounced when examining median household income in the United States. In 1970, it was around $35,000 (in today’s dollars), but for the last few years it has stabilized around $42,000 – not a huge increase, and certainly not large enough to explain the discrepancy in pricing. It’s not as simple as saying that car companies now charge more for their vehicles because the market can bear higher prices.

One of the most telling components of new car prices are the increased cost of labor. In the 1980’s and 1990’s, American automakers fought a losing battle against trade unions representing the workers in their plants. The result of these confrontations were increased costs not only in the salaries paid to workers, but also in the benefits that workers were entitled to. In some cases, these benefits are paid out long after the employee has left the assembly line and is no longer economically contributing to the company. General Motors actually loses money on many of the cars they sell, and for a long time only generated profits based on their automobile financing company.

Japanese car companies don’t have these same labor issues, yet their pricing remains competitive with domestic car companies. This indicates that employee costs are not the only driving factor when it comes to car price increases. The implementation of technology is another part of the pricing puzzle.

Cars of today are technologically advanced over those of three decades ago to an almost extreme degree. Anti-lock brakes, airbags, stability control systems, drive-by-wire – all of these features were expensive to develop in terms of research and testing, and they also contribute to increased manufacturing costs, due to the more delicate techniques and expensive materials required to implement them in modern vehicles. The increased demand for fuel efficient engines which produce minimal emissions has also forced automakers to invest in their engine programs to a much larger degree than they have in the past.

It seems that peeling back the surface of today’s automobile pricing reveals an intricate web of dependent financial concerns that together make up the cost of driving a brand new car in the United States.

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Stretching Your Money: Tips On Buying Certified Cars

If you are thinking of buying a certified used car, here are some facts you should know
If you're thinking of purchasing a used car, there's good news. Used cars don't have to be as risky a purchase as they used to be. Thanks to certification programs, it's harder to distinguish new from used and more Americans are turning to certified cars for better value.

Certification offers a way to weed out unscrupulous used-car dealers who might sell damaged cars. Vehicles damaged by floodwaters or involved in major accidents are prime candidates to end up as part of such scams.

The number of certified pre-owned (CPO) vehicles sold this year is expected to increase significantly from 1.7 million purchased in 2008. Besides costing less than new-car counterparts, certified vehicles also come with many of the same benefits, eliminating much of the guesswork associated with buying used.

Some say it is one of the few segments of the auto market where both sales and value to the buyer have increased. Be wary, however, because not all certification programs are created equal. To help sort out the best from the worthless, used-car experts offer the following tips:

Certified By Whom?

Make sure you know who sets the standards for the certification program and who makes certain they're being enforced. Look for a manufacturer-backed program--the best people to certify a car are the ones who built it and specialize in that make. Most manufacturers will offer a limited warranty in addition to honoring the car's original warranty.

Do Your Homework.

Research the models that make sense for your driving needs. Check safety and reliability reports published online and prices from your whole area.

How Was The Car Certified?

At a minimum, a car should have a detailed mechanical inspection and vehicle history reports. Carfax Vehicle History Reports are a mandatory part of the certification process for more than 80 percent of today's manufacturer-certified programs.

What Does It Get You?

The certified used car you're buying probably comes with an extended warranty. Make sure you know exactly what this covers and for how long. You can always add additional coverage.

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Cash For Clunkers Not?

Cash for Clunkers...Not? With over 22,782 vehicles already purchased via the CARS program by Wenesday and a total of $96 million had been spent already, there is cause for worry. The new program, it was hoped, would get some older and less efficient cars and trucks off the road and at the same time boost auto sales. With sales down 35%, the auto makers needed something to stimulate sales, but I guess $1 billion dollars just wasn't enough.



With the “Cash For Clunkers” or Car Allowance Rebate System (CARS) already making an impact on new automobile sales – Hyundai, who jumped the gun and began offering the program early reported close to a 10% increase in vehicles sold as a result – it is no surprise that many critics are latching on to the more controversial aspects of the program.

Signed into law by the Obama administration in a purported effort to convince Americans to switch to more fuel efficient cars and reduce the impact of driving on the environment, upon closer examination it appears as though the green aspects of the program are fairly weak. For example, participants are only required to demonstrate a 4 mile per gallon fuel economy increase over their old vehicle, as long as the new automobile gets at least 22 miles per gallon combined, in order to qualify for the minimum rebate. This is seen by both environmentalists and industry watchers as a largely insignificant increase in fuel mileage, certainly not capable of producing any dramatic results in terms of reducing America’s dependence upon fossil fuels. The rules for trucks are even more lax, with a minimum of a 1 mile per gallon increase qualifying for the first tier of CARS rebates.

There is also the dubious green practice of encouraging consumption. The reality is that it takes a significant amount of energy to build a new car, a process which generates large amounts of the greenhouse gases and other pollutants that the CARS program is ostensibly attempting to reduce. By encouraging drivers to trade in their older cars which have long ago paid back their carbon debt through years of usage on newly minted machines that have tens of thousands of miles to go before they can boast the same, the incentives aren't exactly embracing the fundamental message of the environmental movement. Reduce, reuse and recycle would appear to be forgotten, although the final two “R's" in the time honored slogan will at least be honored when the vehicles taken in under the program are sold for scrap metal that is then used to build new vehicles and other items.

If the Cash For Clunkers program will have any truly lasting impact on the American auto industry it will be to shake car and truck sales out of the cardiac arrest that it has found itself in for the past year. While this economic stimulus is indeed admirable, couching it in the language of environmental politics is certain to leave a bad taste in the mouths of many.

This article was trying to explain what the Cash for Clunkers program was trying to accomplish. Of course, amid rumors of the program's suspension, Congress will have to review the results of this short lived attempt to boost auto sales. GM and some members of Congress would like to see the government come up with more money to keep the program going.

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Is Trade In A Good Way To Buy A New Car?

Trading in used car lowers the purchase price of your new car, and at the same time it is an excellent way to get rid of an old car without trouble of getting someone to buy it and hassling over the price. Also, it is a great deal especially for the car dealerships as they are going to pay you less then you would have gotten by selling the car yourself.

Naturally, they are also going to sell your used car for much larger price then they paid you. Very often profit on selling trade-in cars is larger then on selling new cars.

However car trade-in can still be beneficial to you because many states calculate the new car tax in a way to reduce the sales tax for the new car by subtracting the traded-in cars value. Unfortunately, not every state does this and you must check if this applies in your case, just ask your car dealership, they will know all about it.

Selling car back to the dealer is another way to profit from trading-in your car if you do not want to sell it yourself. For example if you drive a Ford and want to buy Nissan, you should sell your Ford to Ford dealership. You will probably get more for your car this way because it is usually worth more to Ford then it is to Nissan dealership.

If you want to find out what is the market price of your car, all you need to do is go and ask your car insurance company. Each insurance has so called Kelly Blue Book in which each cars value is stated based on a cars year and model.

Another good way to check for possible price of your old car is to search online and check for the prices of the similar models. While you are at it compare mileage as well as the prices. Be sure to have all this info before you decide on a trade in.

One small detail in trade-in, is cleanliness of your used car. Make sure to clean the car thoroughly both inside and out before going to the dealership. Also, remove all your personal things. Professional cleaning job can often increase your cars value so you can look at it as a kind of investment.

Clean cars often get offers higher for several hundred bucks then the messy cars. Remember that the dealers are just humans, they are like you and me and if they like what they see, chance is you will get better price.

So should you trade-in your old car?

No - If you have some experience in car selling and expect to get a better price selling it yourself.

No - If you are not in a hurry and can spend several weeks and possibly months selling your car.

OR...

Yes - If you do not have much time to waste.

Yes - If you want to avoid car-selling hassle (yes, you as a seller can also be hassled).

Yes - If your primary goal is to get rid of your old car and the price you will get for it only comes second.

At the end the choice is yours, but whatever you do not forget to bargain and try to get a better deal, no matter which way you choose to go.

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