Car Finance explained - A Knowledge base

Car finance can be a pretty damn confusing field. It can seem like a jungle of meaningless acronyms and abbreviations. Don’t worry though. I’m here to provide everyone who doesn’t know their HP from their BCH with a ray of hope. Here’s my guide to the main types of car finance, their benefits and their drawbacks!

Hire Purchase

Hire Purchase is a pretty old-fashioned form of car finance. It’s pretty much the standard type of finance that people turn to when it comes to getting their hands on a car. With hire purchase, you pay an initial deposit and then pay back regular monthly payments for a given period, until the complete value of the car has been paid off. Interest will also be added to the payments.

My good pal, Wikipedia, sums up Hire Purchase pretty well:

“An arrangement whereby a customer agrees to a contract to acquire an asset by paying an initial installment (e.g. 40% of the total) and repays the balance of the price of the asset plus interest over a period of time.”

This type of car finance is probably the most popular when it comes to offering a route to owning a car, even if you don’t have all the money upfront.

Pros

● Provides a fairly manageable process to eventually own a car

● Relatively easy to get approved for– provided you have a pretty good credit rating

● You’ll eventually become the legal owner of a car, to do what you want with

Cons

● Depreciation means that your car will probably be worth significantly less at the end of a HP agreement than it was when you first started paying for it.

● If you have a bad credit history, getting a HP agreement can be pretty difficult

● The finance company can repossess the car without a court order until you’ve paid a third of its value off

Personal Contract Purchase

This type of car finance is pretty much what would happen if hire purchase and personal contract hire were to have a baby. MoneysavingExpert.com, a pretty good, independent authority when it comes to finance matters, describes PCP as “..one of the more complex financial products available to help you buy a car, but it can be broken down into three main parts: 1. The deposit (usually around 10% of the car's price); 2. The amount your borrow; 3. The balloon payment (a balancing payment you pay IF you want to own the car).”

A cross between buying and leasing, this type of finance gives you the best of both worlds but it comes with a sting in the tail– the huge balloon payment you need to make at the end if you want to buy the car. This is notoriously big, so if you plan on buying the car at the end of the contract, you better start saving now.

Pros

● It combines the best parts of buying with the best parts of leasing

● It gives you the possibility of becoming an owner of a car

● Fixed monthly payments

Cons

● It can work out significantly more expensive than traditional types of leasing

● The balloon payment can be pretty hefty at the end of the agreement if you want to buy

● You’ll have to agree to a mileage restriction. If you go over this, you’ll be charged for each mile you exceed.

Personal Contract Hire

You’ve probably come across a personal contract hire in some form and you don’t even realise. Put simply, personal contract hire is the main type of leasing contract available in the UK. It’s a type of lease that’s aimed at people who use a car solely for their own, personal use – as opposed to business use.

Confused.com describe PCH says that: “PCH effectively involves renting a vehicle from a car finance company. With personal contract hire, you lease the car over the agreed contract period, and pay an initial deposit - normally the equivalent of three, six, nine, or 12 months worth of payments.”

A personal contract hire lease gives you the benefit of not having to worry about the crippling depreciation that affects all new cars, as well as giving you much lower monthly payments than if you were leasing.

It’s essentially because with a contract hire lease, you’re only paying off the value that the car is expected to lose whilst you’re leasing it – not the entire amount like you would with a hire purchase contract.

Pros

● Lower monthly repayments compared to hire purchase and other forms of car finance

● Fixed payments for the entire lease

● You won’t have to worry about how much the car might depreciate in value whilst you’ve got it.

Cons

● Expensive to get out of early

● If you don’t keep up on repayments your car can be repossessed

● You won’t actually be the owner of the car – just the registered keeper

Business Contract Hire

This type of leasing is essentially the same as personal contract hire, except for one seemingly small, but in reality, pretty big, difference – this type of contract hire is designed specifically for businesses! It’s available to any type of business in the UK– whether you’re a small sole trader or partnership, or a massive limited company.

Will Craig, CEO of LeaseFetcher, a car lease comparison site that lets you compare millions of leasing deals, told me: “You’ll often find that the majority of business contract hire agreements have slightly more competitive terms than personal contract hire agreements. This is because the BCH market tends to be more of a lucrative cash-cow for finance companies. For example, you’ll probably get a slightly lower monthly rate on a specific car on BHC than PCH– but we’re talking about savings in the tens of pounds, as opposed to savings in the hundreds or thousands.”

In its own right though, business contract hire, and leasing in general, has some major benefits for companies though – the major one being that with leasing, companies don’t need to expend any capital. The fact that monthly repayments are fixed means that businesses can also benefit from an improved cash flow.

Pros

● Your business won’t face the risk of losing money through depreciation, because you’ll never own the car

● You won’t have any capital expenditure

● Fixed, monthly payments improve the cash flow of your business

Cons

● You’ll still have to face those pesky mileage limits, as well as maintenance schedules

● Getting out of the contract early can be expensive

● You’ll need to get fully comprehensive insurance out on the car

About the Author: Tom Butcher is a freelance writer who recently escaped the world of print journalism. He covers a wide range of topics, including finance, business and motoring.

Car Buying VS Car Leasing: Which one is the best for you?

One of the best ways to acquire a vehicle is through paying for it upfront in cash. Except, very few people can actually afford to do this. So, when we mere mortals can't afford to pay for a car in cold hard cash, the first people we turn to are reputable dealers for a car loan. But this isn't the only way. Some of us simply cannot use a big chunk of our savings or monthly expenses for a big down payment, because of priorities. When life happens and you just can't cough up the dollars upfront, there is another option: car leasing.

Buying Pros and Cons

One big pro about buying a vehicle is the flexibility to keeps or sell the vehicle. You also don't have to worry about keeping it in tip top shape or going over the annual mileage limit since it's yours. Of course, this is provided that you've paid for it in full or are religiously paying for it week by week. Speaking of paying in full, you also get the benefit of completely eliminating the fixed weekly/fortnightly/monthly repayments once you've paid off your auto loan. All you have to worry about from then on will be petrol, maintenance, and insurance.

This isn't to say that buying a vehicle doesn't have its downsides. The first problem when you purchase a vehicle, whether outright or as a loan, is the fact that you need to have such a large deposit. And because there are car loan terms wherein you only have two years to pay, sometimes your weekly repayments are larger as well. While this may be cheaper as an expense in the long term, this wouldn't matter so much if your cash flow wouldn't allow for such a large weekly expense. The second problem with buying a car is that it's a depreciating asset. This means that from the moment you start driving that brand-new car, its value will drop by about 20% which means you'll never be able to get back the worth you paid for it even if you sell.

Car Leasing Pros and Cons

One of the best things about a car lease is the fact that it costs much less upfront. This means you can actually drive a better can than you can normally afford if you were to purchase outright. Of course, one of the biggest reasons for this is because you're essentially paying for a vehicle that costs less than its actual value. Remember how we were talking about how a vehicle depreciates in value once it's been driven? That's why.

If your cash flow is on the fluid side because of a higher weekly income then you might just be able to get that luxury car that was a little out of price range for an outright purchase. Even if you can't get a luxury car through lease, if your income is even just 20% higher compared to the minimum for bad credit card finance, you can get a pretty decent family sedan or even SUV with a relatively fluid cashflow -- and that is after weekly and lease expenses. Speaking of bad credit finance, you can actually help get your credit rating up if you're able to sustain good payments in your car lease. It's also much easier to acquire a lease than a loan when you're part of the credit challenged market. When your term is over, most companies will allow you the options of swapping the vehicle for a better model, returning it, or even paying for the residual value if you're on a lease to buy.

PRO TIP: If you own a business, leasing may just be the better option as you can actually have leased cars deducted from your taxes if you use them for business.

Of course, like anything else, car leasing has its own cons. Remember that, because you paid less upfront, you will end up paying more in the long run compared to buying a car. Since the vehicle isn't really under your name, you cannot return it with an excess of your contractual annual mileage allowance or in anything less than impeccable condition unless you want to be hit with fees. Also, if you fall in love with the car, you're going to have to pay for residual fees (see residual value above) to have the vehicle transferred to your name at the end of your lease term.

So, should I buy or lease?

Both car buying and car leasing have their ups and downs. But if you have some money saved up or if you can actually afford a higher upfront and (possibly) monthly repayments, buying a car outright or getting a car loan is definitely the smarter choice. Simply put, you end up saving more in the long run even if you have to shell out more during the initial stages.

If your responsibilities won't allow you to prioritize higher deposits or repayments, or your cash flow might end up a little tight, or if you're part of the credit challenged market, then a car lease is your best bet. Although you'll end up paying more by the end of it, your finances during the car acquisition stage won't be as restrictive.

Great Ways To Help You Deal With Unexpected Driving Costs

As drivers already know, there are many costs involved when it comes to owning a car. From fuel costs to breakdown charges, your bank balance is going to suffer. Should you rely on your car on a daily basis, not being able to drive for a few days because you can’t afford the upkeep is going to make your life difficult.

To avoid unexpected costs, here are a few tips that might help you now and in the future.

Buy a roadworthy vehicle

Not many of us can afford a brand new car, so going second-hand may be the way to go. However, you need to make sure the car is safe to drive before purchasing it, and you should check for any underlying issues. If you don’t feel able to make those checks yourself, or you aren’t sure of the right questions to ask the seller, bring along somebody who can. A trusted friend or a qualified motor technician will be able to advise you if the car is an advisable buy or a potential deathtrap.

Perform regular maintenance

You should get your car serviced at least once a year to offset any potential problems down the line. However, there are ways you can maintain your car without having a lot of technical experience. For example, you should check your tyre pressure on a regular basis to avoid the possibility of a blowout on the road. Make sure you top up your oil to the required level to keep your engine running smoothly. Check your lights and replace the bulbs when they die. These small jobs don’t take long and will alleviate the possibility of an accident and further expenses.

Many people take a class in car maintenance, so despite the added costs to you, having a little knowhow in taking care of your vehicle will save you money, avoiding the need to hire an expensive mechanic with all their added (and confusing) charges.

Protect your vehicle

You need to take out insurance to legally be able to drive. However, you should shop around and find a better deal if you are currently paying a lot on your premium. Don’t be faithful to the same company every year, as they are only interested in your money and not your friendship. When it comes time to renew, compare their new prices with other companies and make the switch if it suits your motoring needs, as well as your wallet.

Breakdown cover

While insurance is compulsory, breakdown cover isn’t, but it is still a worthwhile investment. You never know when your car might break down, so you don’t want to be left stranded in the middle of nowhere. Having cover in place will give you peace of mind and reduce the cost of repairs. So while you may resent the monthly expense when everything's going fine, you never know when disaster might strike. 

Legal cover

We all make mistakes, and there will be a time when you are involved in a road accident. This may be through no fault of your own, so you will want to reclaim any compensation owed for damages to you and your vehicle. Unfortunately, you may be the cause of the accident, and you are liable for any court costs if the third party takes legal action against you. In any case, you need a good attorney to help you, so consider a firm such as Priale & Racine who will fight your corner. Being involved in an accident is stressful enough without the expensive implications, so the right legal cover will alleviate many of your anxieties.

Fuel costs

Don’t rely on your regular gas station for your fuel, but shop around for anywhere with a cheaper option. Obviously, you don’t want to drive miles out of your way for only a small saving, so use your common sense.

One of the best ways to save money is to not use your car at all. When driving around town, you are wasting more fuel by stopping at regular intervals for traffic lights and pedestrians. You might want to do your bank balance a favor, and your health, by leaving the car at home once in awhile and taking a walk if you only need to travel a short distance. It may be that public transport is also a less expensive option when making the daily commute to work, so do a little research and save yourself some money.

Buy a new car

We have already advocated the benefits of a second-hand car, but despite the initial outlay, a new car may be the better option. With advances in technology, many new cars are more fuel efficient and will cost less to tax because of low carbon emissions. They will also come with a lengthy warranty, so any unexpected repair costs can be covered if the fault is with the manufacturer.

You don’t need to pay for the car in one go, as there are finance deals available. Of course, you need to factor the cost of interest into the equation, so find an affordable option that suits you. Buying a used car is cheaper in the short-term but there is a higher risk of things going wrong, and you may need to replace your car sooner than you like. A new model, despite the higher price tag, should keep you going for a long time to come.

Be a better driver

Quite simply, the way you drive can determine how much money you need to pay out in the future. Being a safe driver is going to alleviate the risk of accidents. This means taking care on the road, not driving under the influence of drugs and alcohol, and avoiding unnecessary distractions such as your smartphone.

The way you handle your car is also important. You waste fuel through hard braking and rapid acceleration. Take it easy on sharp corners, avoiding the urge to skid, no matter how much of a daredevil you are. Your tyres and your handbrake will thank you for your care.

Easy Ways You Can Slash Fuel Costs While Driving

Owning a car is expensive, but the ability to be able to get around easily generally makes it worth the cost. However, even if you’ve found a fantastic deal on a car and shopped around for the cheapest car insurance, you still have fuel costs to consider. You might think the money you spend on fuel is avoidable, but actually, there are things you can do to reduce what you’re paying dramatically. Here are a few ways to go about it. 

Ditch The Unnecessary Weight

Maybe you have a big selection of tools in the trunk which you use for work? Once you’re done for the day, removing them rather than leaving them in the car or van and driving round will save you money on fuel. If you have a roof box or roof rack, take this down when you’re not using it. Not only will it contribute weight, but the wind resistance will also slow the car forcing it to work harder and use more fuel.

Avoid Rush Hour

Sitting in traffic with the engine running is bad for your health, bad for the environment and bad for your wallet too. For some people, it might be unavoidable, but if you can, try and stay off the roads during the busiest times. Perhaps you could walk to a coffee shop after work and spend an hour answering emails and tackling general ‘life admin’ before driving home. Your journey will be much faster, smoother and you’ll save money.

Stay Topped Up

Thousands of cars break down every day simply because they have run out of fuel. Stopping off at the gas station can be an annoying inconvenience, but you will save yourself a lot of hassle. Thankfully there are companies out there such as New Era Fuels who will deliver emergency and out of hours fuel if you get stuck, but prevention is better than cure. You’ll save yourself the cost of calling someone out in the first place if you plan your journeys and don’t let fuel drop below a certain amount. A quarter of a tank is a good baseline.

Combine Shorter Trips Into One

Once your car has been parked for a while, and the engine has gone cold, it will use more fuel than usual while it warms back up again. You can avoid this from happening by running your errands in one go rather than spreading them out through the day. Lots of shorter journeys are actually worse for fuel consumption, so if you need to pop out, you could even consider walking shorter trips. Great for extra exercise and you’ll cut down fuel bills too.

Drive Economically

Finally, the way you drive can impact the amount of fuel you’re using on the average journey. Accelerate and brake smoothly, don’t rev the car or hold it on the clutch when you’re stopped. Stopping with the brake is far more economical. Sometimes overtaking and speeding up is unavoidable, but doing so to overtake one car or get one place ahead is pointless and will cost you additional fuel.

The Frugal Approach to Owning a Vehicle

Many of us long to own a vehicle but dread the prices. We first need to think about a loan or financing options, then it’s on to insurance payments and maybe even road tax. What comes next? Parking fees, maintenance, repairs… the list goes on! However, there is a frugal way to approach owning a vehicle and it consists of many small steps. If you want to own a vehicle but you’re worried about the amount of money you’re paying, then a couple of these tips could perhaps change your mind and help you lower the costs of owning a car.

Look for budget cars

A budget car doesn’t mean something that just costs less. A budget car is something that is readily available as both new and pre-owned, has low repair costs, low insurance fees, low emissions which result in lower road tax, and also great fuel efficiency. All of these features add up together to become a budget car that is not only cheap to run, but also comes with a low price tag. Not every car is born even and there are some vehicles that have excellent fuel efficiency at a low price, and other cars that are even cheaper but don’t offer a good deal on everything else.

Request a loan

Loans are seen as an evil in our lives but they really aren’t that bad. Loans are designed to give us money during an emergency or a period of time when we need a little boost, and if owning a vehicle is a priority then taking out a loan is the preferred way to do it. As long as you can repay it, then you should be fine taking out a loan. Keep in mind that your credit rating will affect your chances, so you can find out how to get a car loan with bad credit before you decide to pick this option. Just remember that you eventually have to pay it back, so don’t take out a loan if you aren’t financially stable.

Lower insurance costs

There are many tricks that will enable you to lower your insurance costs. For starters, if you have a garage then clear it out and use it as a way to store your vehicle instead of keeping it parked outside. Security is a huge concern for insurance companies and the safer your car is, the less likely you are to pay extra for insurance. You can also reduce insurance costs by simply driving less. It sounds counterintuitive to drive less, but keep in mind that you’ve got a higher chance of getting into an accident if you drive for longer periods of time and insurance companies keep that in mind.

Second-hand dealerships

If all you need is a vehicle to carry you from point A to B, then there’s nothing wrong with having a cheap car that you bought from a second-hand dealership. Most pre-owned vehicles are refurbished to a working standard and also come with a lot of additional support. You can get some fantastic prices on cars that are close to being scrapped, and although they may not be the prettiest thing to look at, they definitely work.

Beating The Salesmen When You Buy A Car

Talking to someone who wants to sell you something can be very difficult. You know that they will say whatever they can to make a sale. And, this may involve not being entirely truthful with you. But, like most things sales is just a game. And, if you know how to play it, it gets much easier to control these sorts of situations. Which is exactly what needs to be done if you want to save money on your next car. To help you out, this post will be helping you to beat the salesmen. And, get a better deal on your next car.

Salesmen will use a host of different tactics to get their job done. But, ultimately, they will usually be willing to settle on less if it gets them a sale. Most customers won’t question the first price that they are given for an item. But, with something as large as a car; it’s alright to make an offer or ask for some reductions. The very first place to look is the car itself. If it has any imperfections which haven’t been disclosed or it has something wrong with it; you can try to get a lower price. But, you need to do more.

One of the best ways to get a good price on a car is to simply wait. The salesmen will be unwilling to go low straight away. Instead, they will be trying to get as much out of you as possible. But, the longer they have to wait; the more eager they will be to get rid of the car. Going to other garages and seeing other cars is a great way to make a salesmen lower their prices. It can also help if you talk about other deals that you’ve seen at local garages. But, only do this if you’ve actually seen a deal; the salesmen will know what other garages have.

In most places, sales staff are required to tell customers about any deals that hey have running. But, only if the customer actually asks for the information. If you are trying to buy a car, you should always ask about any promotions that are running. Doing this will give you a chance to hear about money you could save on the current car of interest. And, it may open up other options to you as well. Most garages will always have some sort of deal on. These deals can save you a large amount of the car’s value. So, they’re worth pursuing.

Once you know which car you want to buy, you can seal the deal. Usually, you will have to pay for the car before you can take it away. But, if you can’t do this, most garages will have their own system for no deposit car finance. This will allow you to drive the car away on the same day that you buy it. And, will negate the need to save money.

Hopefully, this will give you the inspiration you need to save some money on your next car. It can be hard to see through the tactics that salesmen use. But, it’s worth it. These sorts of methods can save you a lot of money. And, you’ll probably even be able to get a better car out of it.

Are You Needless Letting Your Finances Become Tighter? Find Out Here

Keeping your finances in great health is no easy feat in today’s economic climate. Therefore, the need to act with responsibility is arguably greater than ever. Otherwise, you could be opening yourself up to some hugely stressful situations further down the line.

Naturally, you should always aim to find the best-paid job possible. However, a competitive salary is only one crucial aspect for keeping your finances in the best position possible. Avoiding the other common pitfalls are just as important to your overall status. Here are five simple tricks to ensure you aren’t missing out.

• Stop thinking that your main job is the only way to earn money. Whether it’s learning to trade stocks in your free time, or starting a business on the side doesn’t matter. Opening up an additional source of revenue could be the key to improving your long-term financial prosperity. With a little bit of luck, it may eventually become your primary source of income too. If that happens, your financial future will look better than ever.

• Appreciate the importance of getting the best deals in life. This could mean using coupons to save money on groceries. Alternatively, you might be able to reduce your electricity of TV bill. Those small savings may not feel overly important on an individual basis. Collectively, though, they will make a huge impact. Moreover, you can start to see those rewards almost immediately also. What more incentive could you need?

• Don’t pay out more money than is needed to through a lack of education. You work hard for the money that you earn, and are entitled to live a comfortable life. Student loan tax deductions could save you hundreds of dollars each year. Moreover, professional accountants can often work wonders for your payments too. Meanwhile, if you have a young family or disability, you can probably seek financial help from the local governing bodies. Don’t feel guilty about it; that’s why you pay taxes in the first place.

• Likewise, you should never be too frightened to fight for your financial entitlement. If you’ve suffered an accident at work due to an employer’s negligence, you should fight for the compensation. Alternatively, if you’re going through a divorce, it’s vital that you get your fair share of the assets. Sadly, if you give others the chance to take advantage of you, they will.

• Avoid falling into the modern mentality of wanting to buy everything. Leasing a car, for example, is often a far better option than buying a new car. Meanwhile, there are plenty of other assets where hiring agreements simply make more sense. Learn to take a more thorough approach when making those vital decisions, and you won’t go far wrong. For the sake of your immediate financial status, as well as long-term aspirations, this should be considered essential.

Getting these elements right won’t make you a millionaire. But they will stop you from needlessly leaving your short each month. Even if those savings simply go towards your next holiday, that financial comfort is priceless.

5 Terrible And Costly Mistakes To Avoid With Car Rentals

When you are thinking about renting a car for your vacation or business trip, the first logical step implies browsing through the online listings of the companies servicing the area and selecting what you consider to be the most appropriate one. The criteria that enable you to dissociate between the available agencies include rates, fleet options, reputation, potential discounts, the inclusion of additional services, so on and so forth.

Basically, you choose the company with what appears to be the most agreeable "terms and conditions", sign the contract and leave their parking lot at the wheel of your new rental. The headache starts only when you return the car, as you notice there are several other unexpected fees that you need to pay. Let's review the top 5.

1. Early return fees

As the cautious and responsible customer that you are, you will of course do your best to avoid the late taxes which, let's be honest, are quite substantial nowadays. In order to do so, you might consider that taking the rental automobile back to the lot of the agency a day earlier constitutes the best option or even that you may get a discount. Wrong. Most rental companies will not compensate you for your punctuality, but will actually apply additional fees or increase the rates. For example, if the rates are lower when you rent the automobile for 7+ days and you bring it back on the 6th day, you lose the discount.

2. Location surcharges

Certain key locations where the rental vehicles are always in high demand – think airports, for instance – are often a great deal more expensive than the agencies in the downtown area. You can avoid paying extra without the inconvenience of taking public transportation to town by confirming the rental ahead of time and requesting that the car be there when you arrive. By using an online comparison service such as Compare Car Rentals, you can see the difference in price between rental companies near an airport and those situated further away.

3. Preexisting damage costs 

he biggest mistake you could possibly make is to rely exclusively on the goodwill and honesty of the rental agency representatives when it comes to preexisting damage. If your rental car presents dents, scratches, cigarette burns, etc. and you do not document them with dated pictures before you drive off, chances are you will be asked to pay for the damage. Never assume that your word will weigh heavier in court, should it come to that.

4. Taxes that were not included in the advertised rates

What you see on the websites that promote incredibly low rates is generally not the amount that adds up when you count taxes and other fees. Those rates are mainly there to sway the customers and if you look closely at the fine print, you will notice that they do not include all the fees. Bottom line is that you should always ensure you know how much you have to pay before putting your signature on the contract.

5. Overlapping insurance charges

In numerous cases, the insurance policy of your personal car and/or the credit card company has the rental covered. However, the job description of the rental agency representative clearly states that he should do his best to persuade you to purchase the most comprehensive insurance package, whether or not it overlaps your policy's coverage. Again, check this aspect beforehand in order to avoid signing under pressure. Be wise, folks! The Guardian Website has an entire section dedicated to credit cards and learning about the latest news surrounding them and what your provider should and should not cover as standard - click through to visit the site.

A Look At 10 Situations Where Your Insurance May Not Cover The Rental

You may have a clear idea regarding the extent and limitations of the coverage in your current insurance policy when it comes to your personal car, but these stipulations don't always apply for rentals. The situation is the same for the coverage provided by your credit card; that is typically the reason why it is so easy for rental agencies to "bully" clients into purchasing the most expensive insurance available. The problem is that even that contract has several exclusions and loopholes…

Therefore, you could very well end up spending a lot of cash in vain as you will still be requested to account for the damages/liability from your own pocket. Let's elaborate.

1. Covered, but only for a limited period of time

For instance, if you are relying on the coverage provided by your Visa card, then you should be aware you only have this safety net for a maximum of 15 days for the United States and 30 days for external rentals. Check for any mention of a time limit in your contract.

2. International exceptions to the coverage

Israel, Australia, Ireland, Italy, Jamaica and New Zealand are only a few examples of countries where the credit card's protection for the rental is voided. Verify your contract to determine other potential exclusions. If you visit eRentals online, you can check out rates for the above listed countries before you decide on a final travel destination.

3. Unauthorized driver

In the event that the person driving the car when the collision occurs is not listed among the authorized drivers, the collision waiver is null. Ask the rental agency to include all potential drivers of the rental in the contract before signing.

4. Categories of cars

Visa card owners should be aware that pickups, sports vehicles or vans do not benefit from coverage, whereas American Express has listed SUVs in the category of exclusions.

5. Road exclusions

Typically mentioned in the fine print section, most rental insurance policies are immediately voided if the car is driven off-road. Therefore, if you want to hire the car to go on a fishing trip for example, make sure that this exclusion is not in the contract.

6. Contract violations

Also part of the fine print, conditions regarding the usage of the car like commercial applications or DUI could nullify the insurance.

7. Traffic violations

It is estimated that on average every driver will – deliberately or unintentionally – break a traffic law at least once every day. If you get caught and your traffic violation results in damage to the rental car, the coverage is voided.

8. Stolen vehicles 

You are always held accountable for the theft when your rental car is stolen because you left the keys in the ignition or on the dashboard, in plain sight.

9. Loss of use

A controversial clause, the loss of use is essentially an exception to the coverage and it implies that you have to reimburse the agency for the profits lost while the car is being repaired/replaced.

10. Improper method of payment

In numerous cases, the credit card insurance will only apply IF you pay the full amount for the rental vehicle, which means that utilizing a coupon or the points to obtain a discount could leave you unprotected in case of an accident.

The Top 5 Hidden Costs Of Renting A Car

More often than not, people who are looking to rent a car take the time to compare prices and read customer reviews in order to find the right one to suit their purpose. However, it is necessary to mention that the overall costs of hiring a vehicle imply more than the actual price you pay for the pre-established period during which you rent the car. Unfortunately, irrespective of how much window shopping you are doing, you will end up paying for the following fees!

 1. Fuel

Unless you fill up the gas tank yourself, when returning the rented car, you will be charged extra for the fuel. While the great advantage of opting to prepay a full tank of gas consists of the fact that you will pay market price for the fuel, the downside is that you will not get any refunds for the gallons of unused fuel. In other words, you will wind up paying for what is left in the tank and since the gas prices are rather high, it means you will be taking quite a lot out of your own pocket for the sake of convenience. With regards to the option of filling the tank yourself too, you have to remember to do so as otherwise you will end up overpaying for gas.

2. Loss/damage waiver

When signing the contract with the car rental service, it is important to read the policy on the loss and damage waiver carefully. While it is true that you will be completely covered and most companies include the zero-deductible coverage, it all comes at a rather spicy price usually starting with 15 pounds of more per day. Therefore, it is advisable to review your individual car insurance and determine if you have the coverage included in the policy.

3. Other drivers

In the eventuality that the rented vehicle will be used by other drivers than the one stipulated in the contract, then you should expect the car hire company to charge you an additional price, usually around 5 pounds per day. Consequently, in order to avert overpaying, it is best to add the other potential drivers in the contract. Given the fact that including other drivers in the contract does not cost you anything if you are a member of a recognized automobile association, it is not worth the risk of voiding the car hire contract to risk this.

4. Partial days

Sadly, few people know that if you picked up the rented car at 11 am for instance, you have to return it at the exact same time or else you will be charged for another full day. In addition to respecting the time frame rule, it is necessary to mention that in many instances or unless arranged beforehand, the rented car must be dropped off on the exact agency bureau where you picked it up, or you will wind up paying another fee as well.

5. Mileage limitation

Even though not all car rental services apply this fee, some of them charge you extra if you exceed the number of miles stipulated in the contract. Sure, the price of an extra mile may not seem like much, but don't forget that fees tend to add up quite quickly as the miles go by! For this and all the other above reasons it’s vital to check out the terms and conditions of your contract before you hire. Carhiredirect.co.uk offer a comparison tool where you can compare prices across a number of car hire companies across the world and look at their various terms of contract with regards to these above costs.

How Will Driverless Cars Impact Insurance Rates?

Of the 10.8 million car accidents in 2009, 95 percent were caused by driver error. Accidents have declined slightly in the years since, but scientists are working on developing computer-operated cars that will literally drive themselves. In theory, these driverless cars would be safer, more economical, and more convenient than human-operated vehicles. They may also cause insurance rates to plummet, or even make insurance unnecessary.

Will Driverless Cars Really Reduce Accidents?

Car accidents happen when people either drive inappropriately or break the rules of driving. If all people drove the speed limit, yielded appropriately, and had perfect reaction times, auto accidents would be extremely rare. The vast majority of collisions occur when a driver either doesn't see a potential threat or is unable to react to it in time.
In this sense, driverless cars would limit the risk of auto accidents significantly. On the other hand, there's bound to be a rough transitional period between the release of the first legal computerized vehicles and a time when all cars are driven by machines. A mix of drivers and driver-free cars on the road may lead to complications, especially if the computers are not savvy enough to predict erratic driving behavior on roadways.
What Will Happen to Insurance?

Assuming that driverless cars will one day replace regular human-operated automobiles, traffic and insurance laws will need to change to keep up with the times. Right now, a car's driver is held liable for damages that the vehicle causes. If computerized vehicles become standardized, this liability may shift to the car's manufacturer or the software designer. In this changing world of technology, insurance companies may need to redefine their focus.

One thing that will certainly change is the way insurance rates are calculated. Right now, insurance prices are determined almost entirely by calculating a driver's risk. In a future where all cars are operated by computers, risk factors will decrease tremendously and become standardized between drivers. Insurance rates should plummet, since insurers won't need to pay as much for claims. There should also be no reason for some groups, like young people and the elderly, to pay more for insurance as they will no longer have higher risk.
Of course, drivers may not be free of all responsibility and new risk categories might be established for new perils. Computers can short out, get viruses, or miss important patch downloads. If a car's on-board computer were to fail due to poor maintenance, the driver might still be held liable for the damage. The driverless cars also have the ability for drivers to override the car's decisions; if an accident occurs, the driver may still be held liable for failing to prevent it. The way insurance companies calculate liability and rates will need to change to reflect the new technologies.
Technology is changing and developing faster than ever. In a few lifetimes, people have gone from traveling by horse and carriage to cars; now those cars are evolving in new and exciting ways. We're a long way from seeing our roads dominated by driverless cars and low insurance rates, but it is a possibility on the horizon.
Claire Zermeno is a freelance writer for www.carinsurance.org.uk, a website where you can compare insurance quotes to get the cheapest deal possible. Take advantage of their service and lower your car insurance rate.

Don't Let Your Car Sit Idle: Rent It Out

Rising gas prices have caused many Americans to cut back on the numbers of miles they typically drive. Longer road trips have been replaced by vacations in their own town. Carpooling has become popular as well. Some people have decided to stop driving altogether. Did you know you could rent out your car? It can be an easy and effective way to make some extra cash.
How It Works
The process is rather simple. You register your car at one of any peer-to-peer car sharing sites. Someone who needs a car will then make a bid for your vehicle. Your car can be rented out for as long as needed. Vehicle owners can even set their own rates. Rent out your car as many times as you would like.
The Benefits
One of the best benefits to renting your car is that you provide a ride to someone who needs it. Helping other people is always a good feeling even if you are profiting from it. Speaking of profit, you can actually make more than what your car is worth.
Renting your car can generate revenue just like renting a room in your home. Keep in mind that your car sits in the driveway more often that you are actually driving it. It makes sense to make some money from it while you are not using it.
The person renting your car benefits as well. Renting a car through a rental company can be expensive and confusing. Coming to an agreement is simple and fast. Anyone who needs to rent a car also has more variety to choose from. Not everyone needs a late model car. Having a car to get to a job interview may be enough for most people.
Is It Safe
Is my car safe while someone else is driving it? Yes, your car is covered by an insurance policy taken out by the site you list your car on. This means that you are not on the hook if your car is damaged while someone else is driving it. You may even be able to get a discount on your own policy because you won't be driving your car as much.
There are all kinds of background checks that are performed as well. Only good drivers will be allowed to get behind the wheel of your car. Measures are also taken to ensure that drivers have not committed insurance fraud in the past. You have absolutely nothing to worry about when you car is being driven by a stranger.
Can't I Just Trade It In Instead
Say you are driving a car that is worth $2,000. Over the course of a year, you could make much than $2,000 if you are renting your car out on a regular basis. If you are still making payments on your car, it could help you cover your payment. It will help you pay the insurance and maintenance costs at the very least.
The dealership is not going to give you very much for a trade on an older car. They won't even give you full market value for a newer car either. Trying to sell your car can be a hassle if you don't know what you are doing. Renting out your car is much easier because you are matched up with people who need what you have to offer.
Don't let your car just sit in the driveway. It makes more sense to rent it out instead. You can make a passive revenue stream simply by letting other people drive your car. The money you raise from renting out your car can pay for a new car or help you take care of some other bills. You may even be able to make a profit from your car in the long run. An insurance policy covers your car and all applicants are pre-screened. What do you have to lose?
Another easy way to cut down the costs of your car is to shop around for lower car insurance rates online at Kanetix.ca. By simply filling out a questionnaire on Kanetix's website, you could save hundreds of dollars on your car insurance every year. Do a comparison today to save time and money.

Get the cheapest insurance you can

If you are looking for a great way to save money on your auto insurance, you are not alone. By following a few key tips today, you can get the cheapest car insurance policy. Consider these points

1. Reduce Theft Cover

Many people who shop for car insurance have the desire to buy the most cover they can for the least amount of money people. However, with some types of coverage, such as theft cover, there is an upper limit to the benefits you can enjoy. For example, many car insurance companies will only pay out on theft cover up to certain dollar amount, but this is often only after your deductible is met. Consider your car insurance deductible as well as the value of the items you may leave in your car. After reviewing this information, many people will see that theft cover is simply not worth paying for.

2. Make Your Excess High, But Affordable

A common misconception about car insurance excess is that you don't have to pay it if the accident is not your fault. Safer drivers therefore often opt for a higher excess than is affordable for them to pay out-of-pocket. However, your excess may be due in some cases even when the accident is not your fault. Higher excess can make your premium lower, but make sure the excess is not so high that your insurance is unaffordable to use.

3. Drive Safely At All Times

Car insurance will become more expensive as you get more traffic citations and have more accidents. Your inclination may be to slow down when you see a police officer up ahead. However, there are now more traffic cameras than ever before that can record you cruising at high speeds. Driving safely at all times is your best option for lower car insurance.

4. Talk to Your Agent Before Filing a Claim

Car insurance rates can increase when you file a claim. This can include claims based on accidents that are not your fault, weather-related damage claims and more. When in doubt, it is best to talk to your agent before filing a claim. Your agent can help you to better determine if your insurance rates will be affected by filing a claim and if it's best to pay for minor claims out-of-pocket.

5. Consolidate Insurance Policies

Many insurance companies will offer you a discount if you purchase homeowner's insurance, life insurance or another type of policy along with your car insurance from the same company. This discount can make your car insurance more affordable.

Keep these tips in mind to purchase the most affordable car insurance policy.

Patrick is guest blogging for his no deposit car insurance blog.

Don`t Get Your Fingers Burnt When Taking Out Car Finance

Anyone wanting to buy a used car will no doubt do some online comparison shopping for auto loans before taking the dealer's finance option at face value. At least, that's what you should do if it's something you haven't considered yet.
Obtaining the best car financing is important because a better loan will help you save money on interest over the entire life of the loan. Comparison websites exist for this specific purpose. They allow you to compare auto loan rates instantly and at a glance. Some websites will require you to enter in data prior to getting a comparison listing. This is because auto loan rates can vary by location and according to the make, model and year of the car you will be purchasing. Because of this, you will most likely need to enter your zip code and the car information.
If you don't have a particular car in mind, choose something similar to what you are looking for, such as a small sedan, an SUV, minivan, or pickup. It's best if you have already chosen the car you want to buy because the car loan quotes will be more accurate during the preliminary comparison shopping. Certain websites even have the option to compare cars according to your budget. This can help you decide which vehicles you can make the monthly payments on.
Be aware that some dealerships offer financing that could be considered scams. Yo-yo financing is one of them. This happens when the dealer says that you are approved at a certain interest rate. You sign all of the documents at the dealership and drive away, thinking that you're free and clear. Soon after, the dealership calls to inform you that financing was denied and you have no choice but to accept the car loan at a higher interest rate. If you don't, your car will be repossessed.
To avoid this, ask to see the loan authorization number to make sure that you are approved and do this before signing anything. If any phrases like "spot delivery" or "temporary conditional" appear in the loan documents, do not sign them.
Dealers also make money from their financing department, sometimes even more than they make from selling cars and they make this money by offering extended warranties and other add-ons. This doesn't mean that you shouldn't consider the extended warranty because it may come in handy, but what is that going to mean for your monthly payment?
Stay on the lookout for other hidden fees like dealer markup fees. Otherwise known as "dealer reserve," this simply refers to when a dealer marks up the loan interest rate a couple of percentages. This means that a rate of 6% could be hit with a dealer markup of 2%, bringing your total to 8%. There is nothing in the loan documents that indicates this markup, but you can potentially negotiate your interest rate if you ask. The dealer will not be able to give you a rate below the base rate, which is based on your credit score, so knowing your credit score and your pre-approved interest rate comes in handy. It certainly gives you more negotiating power.

This article has been contributed by Louis Rix, finance expert at CarFinance247.co.uk

Pros, Cons, and Reasons for Leasing versus Purchasing a Car

Consumers looking to have a vehicle must know about the leasing and buying features. Leasing is an alternative to buying that must be considered. Leasing has become very popular as reports indicate that over half of all luxury cars are leased. Getting a car on a lease costs less since consumers usually only pay for the car's estimated depreciation over the course of the lease period instead of the car's total value. However, there is no car ownership involved since leasing only allows customers to use the vehicle. Here is a list of pros, cons, and reasons for leasing and purchasing of vehicles.
Pros of Leasing

1. Lower costs. Leasers are only charged for the car's depreciation instead of the full value. Leasing provides lower monthly payments in comparison with a purchase finance options.
   
2. Low or no down payment. Leasing requires lower or even no down payments. It is a viable option for consumers that do not have enough cash to purchase a vehicle.
   
3. Simple turn over. There is no selling hassle after the lease term is over. Consumers only need to turn the car in and lease a new car if desired.

Cons of Leasing

1. No equity. Consumers that lease cars get no equity value from the money spent to use the car. The car will never be owned, unless the lease contract allows for a purchase opt-in after the lease term is over.
   
2. Extra insurance costs. Lease insurance doesn't usually include full coverage on stolen or totaled cars. Extra insurance, called gap coverage, can be purchased to cover for these events at higher prices.
   
3. No flexibility. Lease car companies charge big fines to consumers who want to withdraw early from a lease term. Depending on the lease contract, fees can cover up to six months of lease payments.
   
4. Extra charges. Miles are a major factor to consider on lease vehicles. Most lease contracts allow up to 15,000 miles per year at no extra charge. Heavy car users would incur charges of 15 cents per extra mile. This can amount to hundreds of dollars more per year for heavy drivers.

Reasons to Buy a Car

1. Consumers should buy a car for the long-term ownership benefit, which would eventually require no monthly payments. The main aspect to consider would be the final amount spent versus the car's yearly or mileage depreciation.
   
2. Car buyers can drive their cars without any mileage restrictions. Drive without having to check on the odometer on a constant basis like lease drivers.
   
3. Car owners can customize their rides as they see fit. Add any features or details to the car as preferred.

There are many factors to consider on whether to lease or buy a car like available money, usage, and resale value. Check all options to know which one fits your finances and tastes. Experts suggest leasing as an option to financially capable consumers that like to drive new cars every couple of years that otherwise could not afford this alternative.

This article is provided courtesy of Auto Loan Experts, a consumer finance website providing information and tools on auto loans for people with bad credit.

Tips on renting a car overseas

Depending on what country you plan on traveling to, sometimes renting a car overseas can not only be cheaper, but more convenient as well.

Finding a company to rent a car from is incredibly easy when you’re traveling because most major airports usually have rental car companies that offer 24-hour assistance. Sometimes you can find a better deal renting from a local rental car provider; however, these companies tend to have inconvenient hours or even employees who don’t speak English, depending on what country you are traveling in.

Once you decide on a company, you will have to make a booking using your credit card, and you will also have to provide additional information regarding your insurance policies and possibly your past driving record and history as well. First off you must sit down with the car rental agency and force them to outline every single part of the contract. Some car rental companies will charge you if you don’t return the car at a certain time, while others will charge you if the gas tank isn’t full when the car is returned, and of course if there was any damage to the car as well.

Also, when you first pick up your rental car, be extra careful that you inspect every inch of the vehicle to make sure there is no damage, otherwise the company could charge you if they think that you were the one who caused the damage.

If you plan on crossing any borders with your car, you will need to make sure if the company will allow you to do so as well.

Be extra careful to read the fine print before you sign any documents as well, as some companies like to ding customers with various hidden charges. Furthermore, some companies add additional charges especially when they rent out vehicles at airports, such as a 20% surcharge fee for the rental rate (international car rental taxes are usually 10 to 30 percent above the estimated rate).

Furthermore, when renting a car in another country be sure to only sign a contract written in English, just to be on the safe side, and make sure the employee clarifies what type of fuel should be put in the car as well.

And last, but certainly not least, before you head out on your trip it may also be a good idea to register for an International Driving Permit (IDP) before you drive so your license can be translated in multiple languages.

Bio :
Chloe Trogden specializes in research involving all forms of college grants. She has compiled thousands of resources including Native American grants along with many others. She is currently attending UNC Chapel Hill and is entering her Junior year in the fall.