Do you want to save money when you buy a car? Don’t go out to a dealer, at least not right away. First do some homework, get the information you need–then head out looking for cars.

You’ve heard it said, “knowledge is power”, and no where is that more true than when it comes to buying a car. Here’s the main point: you’ll be going into a car dealership that not only has the cars you’re interested in, but it’s also a place that’s filled with people who generally have more knowledge about their vehicles than you do. From a financial standpoint, that’s a disaster waiting to happen. The greater the knowledge gap, the more likely it is that you will pay too much for what ever you buy.

How do you get the information on the car you want to buy? In the old days, you probably had to hook up with a “car guy”—one of those people who seems to possess an almost supernatural understanding of all things automotive. But today we have the internet, and that’s really leveled the playing field. There are websites dedicated to providing not only free information about all kinds of cars, but even the best car dealers to buy from!

That last point shouldn’t be taken lightly either. There are different kinds of dealers—independent or franchised—and there are also car supermarkets. Which one you work with will have an impact on the deal you get on the car you buy.

Finding the best deals on new cars

Here’s where you really want to get the most detailed information. You need to get the very best new car deals, if only because prices—and therefore the financial stakes—are higher than they are for used vehicles.

There might be a temptation to think that car prices are fairly standard, that the price at one dealership is roughly the same as it is at all others. Not true! The only way to know just how wide the spread can be from one car to the next, and from one dealer to the next, is through thorough research on new and used car websites.

A good car website will show you what the price of any given make or model will be, as well as the add-on price of various options. When you have such information, you’re in a better to position to negotiate, or even to know if the car you’re interested in is worth buying at all.

You’ll also save time and wear and tear on your current vehicle, since you’ll be “shopping” from the comfort of your own home rather than driving from dealer to dealer. Minimizing contact with aggressive sales people is still another advantage. The more you can research and work the numbers in a non-sales environment, the better the deal you’re likely to get on your next car.

Getting the scoop on used cars

In a real way, researching used cars is even more important than it is if you want to buy a new one. Used cars not only come in hundreds of different makes and models—just as new cars do—but they also come with different ages, condition and mileage. That’s a lot of variables, and all have a strong influence on the true value of used car. Each of those variables will impact the price you should pay for your car.

Used car review sites are the best way to conduct your research. A good site will allow you not only to find the cars you’re looking for, but will also provide valuation tools that help you to consider the value of certain options, as well as the effect of age and mileage on the car you want to buy. If you’ve ever tried to do this using used card guide books, you know how difficult it can be. There can quite literally be dozens of calculations involved in the process of coming up with the value of just one car. And if you want to compare several, it can be a true nightmare.

Used car review sites can do this automatically, saving you time and aggravation, as well as the cost of potential math errors.

Don’t buy a new or used car alone—take advantage of quality websites that can both make the car buying experience much more pleasant—and much less expensive!

This is a featured post for Auto Trader.

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Guest Post

In reason # 10 of 11 Ways to Cut Your Car Insurance on this site, the suggestion was made to “Shop, shop, shop!”—but you need a way to do that quickly and efficiently. Car insurance comparison websites enable you to gather information and rate quotes from the largest number of carriers in the shortest possible amount of time.

The goal should be to get cheap car insurance, and not just cheap, but sufficient coverage to make certain you’re adequately protected and in compliance with legal requirements. After all, that’s the whole point of car insurance, isn’t it?

Car insurance comparison web sites as a source of information

One of the often overlooked benefits of car insurance comparison websites is that they can be a source of information—the good sites can at any rate. Most of us don’t know all that we need to know not only to get the best rates, but also the best coverage for our particular circumstances.

When it comes to car insurance, “ballpark” prices are of little use. Since each driver is unique, any quotes supplied must make allowance for your personal profile. Car insurance rates depend heavily on such factors as age, driving record, claim history and even credit rating. Any deviation in any of these categories can result in a radically different rate quote.

Another critical knowledge factor when it comes to car insurance is discounts. Just as drivers can be penalized for poor driving records and credit histories, they can also get rate reductions based on certain factors. A good driving record, for example, can result in a substantial reduction in premium—that’s an obvious one. But there are other discounts available that we may not even think to ask about. Insurance companies often offer discounts for certain car models and even specific safety equipment, such as anti-lock breaks, that we might never think to inquire about. Insurance companies may not ask us about all of the factors that would result in reduced rates, which means we need to ask. The only way we can do that is by expanding our own knowledge base.

The idea isn’t just to shop for rates, but also to gather the information that will make us better informed consumers so we can press the insurance companies to give us the best rates that our circumstances will allow. A good car insurance comparison website will help with this.

How do you tell the good comparison sites from the bad ones?

All websites are trying to sell us something—that’s a given. The bad ones do just that—they sell without offering anything useful. The best evidence of a good site is in how much information they give away. Put another way, do they offer the type and depth of information that will make you a better consumer of what it is they’re selling?

A good comparison site is an effort to match informed consumers with reputable insurance providers. If the site accomplishes both, you’ve found a winner. A strong site will provide you with answers to all of your general questions, and at least point you in the right direction as far as the questions that are specific to your own situation. As a result of the information provided on the web site, you should be able to ask an insurance agent the kind of questions that will lead the agent to provide you with the best coverage for the least amount of money.

Still another factor is site security. You’ll be entering personal information when you go to a comparison site–how secure will that information be? Comparison sites should include the latest internet security standards (such as VeriSign) that will ensure that the site is doing all that is necessary to protect your information. If it doesn’t, you’re in the wrong place!

This is a guest post sponsored by MoneySupermarket, a UK based car insurance comparison website, offering comprehensive information to enable you to be an informed consumer, complete site security, and rate quotes from the finest car insurance providers in the UK.

Have you used car insurance comparison websites? What has your experience been?

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Guest Post

How might tickets and accidents affect your car insurance premiums? One speeding ticket in the last three years will likely not have a significant impact on your car insurance rates, unless it is a teenage driver. However, multiple tickets and accidents most certainly will impact your rates.

If you have experienced a large increase in car insurance premiums your best bet is to take time to receive comparison auto insurance quotes from competing insurance companies.

All insurance companies are not equal

The reason why it is important to request comparison car insurance quotes is because insurance companies charge differing amounts of money when tickets and accidents accumulate. Some insurance companies essentially want you to take your business elsewhere by increasing your rates substantially, while other companies will make your rate increase more reasonable.

Depending upon the company, the rate increase for multiple tickets or accidents can be most severe. Some companies may increase your individual rate two to three times the normal rate meaning that your car insurance premiums could double or triple! Or worse, you could be dropped by your insurance company altogether, being labeled as a high risk driver.

As the owner of an independent insurance agency in Cincinnati we witness the frustration of drivers who are penalized excessively by insurance companies for tickets and accidents.

Multiple tickets and accidents

If you have had multiple tickets or accidents what can you do to lower your car insurance rates?

Some may conclude that taking remedial drivers’ training courses would be the best option. Taking such a course may remove points from your driver’s license for the state in which you live and are licensed, but it will not help your insurance record with your insurance company!

The underlying reason is that remedial driver’s training does not necessarily change the behavior of the driver. It may remove the points from the license, but not necessarily the behavior that led to the tickets or accidents in the first place.

I distinctly recall as I was sitting in a class room for driver’s education many years ago, watching a gruesome video of car accidents and the victims being pulled from the wreckage, with the purpose of “scaring” teenage drivers into considering the seriousness of speeding.

Did it work for me? Absolutely not! My parents made the mistake of allowing me to drive a sports car they had purchased. On many occasions, I pushed the ‘pedal to the metal,’ one time exceeding 140 miles per hour with a few of my school buddies egging me on.

Remedial drivers training may remove the points from your driver’s license, but insurance companies will likely not remove the surcharge for tickets or accidents.

Changing your driving behavior is the best way to lower your insurance rates over the long term.

If you are in the unfortunate position to have a number of tickets or accidents on your driving record currently, contacting an independent insurance agency is your best bet to find the lowest rates on car insurance. The reason why is because only an independent insurance agent can truly shop the market for their clients.

Jack Thomas is an insurance writer and author with more than 23 years of experience in the insurance industry. Jack manages an independent insurance agency in Cincinnati, Ohio.

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11 Ways to Cut Your Car Insurance

Distractions draw your attention away from the road whenever you’re behind the wheel. On any given day, you might confront thousands of things that cause you to divert your attention or take your mind off traffic. Some are necessary. Stop signs, merging vehicles, traffic lights, and construction crews all must be acknowledged. On the other hand, cell phones, texting, reading, and putting on makeup should be avoided while driving. These and countless other distractions dramatically increase the risk of causing an accident. That will cause your car insurance rates to climb.

Below, we’ll share a few statistics that will demonstrate the extent to which talking on the phone impairs your ability to drive safely. We’ll then take a look at other activities that can pull your attention away from the road. You’ll also learn how a single mistake due to distracted driving can influence your auto insurance rates for years to come.

Talking On The Phone While Driving

It should not come as a surprise that using a phone while driving diverts your attention from the road. The U.S. National Highway Traffic Safety Administration (NHTSA) found that 18 percent of accidents involving fatalities, and attributable to driver distraction, involved the use of cell phones. Additionally, the Insurance Institute for Highway Safety (IIHS) reported that drivers are up to four times as likely to cause accidents when using handheld devices, including phones.

Many drivers think their experience behind the wheel reduces the risk. That is, they assume most of the accidents are caused by younger drivers, or those who have not driven for long. But this is inaccurate. The Insurance Bureau Of Canada (IBC) commissioned a study (published in 2007) that found novice and experienced drivers were equally distracted by cell phones.

Over the last several years, there has been a transition from using handheld phones to hands-free devices. This was based on the assumption that people are distracted by phone usage because they are forced to hold their phones while talking on them. But a study conducted by researchers at the University of Utah found this assumption to be untrue – or at least questionable. Findings from the study revealed that a driver’s reactions while using a phone are similar to those of a drunk driver, regardless of whether the device is physically held.

These studies demonstrate that using a phone while driving is a bad idea. But it is important to realize that many other seemingly benign activities may prove equally disastrous on the road.

Distractions Beyond Talking On The Phone

Researchers categorize distractions into three types: manual, visual, and cognitive. Manual distractions force you to remove your hands from your steering wheel; visual distractions cause you to look away from the road; and cognitive distractions affect your focus. With this in mind, consider the myriad things you might do that pull your attention away from the road.

Do you read while driving, including looking at maps or directions? Do you attend to your car’s stereo system (i.e. changing CDs, lowering the volume, etc.)? Do you shave or brush your hair in traffic? Many people eat meals while driving. Not only is doing so distracting, but some foods can drip, spill, or leave your hands greasy.

These activities may seem harmless, but will impair your decision-making ability on the road. In doing so, they expose you to an increased risk of causing an accident.

How Distracted Driving Affects Your Rates

If you’re caught driving while distracted, you may receive a ticket and be required to pay a fine. Although both are inconvenient, the financial cost of distracted driving can be far more severe. Your auto insurance rates are calculated based on numerous criteria. One of the most influential factors is your driving record.

If you have a clean record devoid of accidents and tickets, you’ll enjoy lower rates than otherwise (shop around to find the lowest rates possible). But a single at-fault accident on your driving record can cause your rates to rise by up to 40 percent. The reason is because your insurer will reevaluate the risk of loss associated with insuring you, and adjust your premiums accordingly. If you cause an accident due to being distracted, you’ll pay higher premiums for several years. That will amount to much more than a one-time fine.

Clearly, it pays to avoid distractions while you’re on the road. However, if you cause a collision that sends your rates skyward, shop around for another insurer. You may find that comparing quotes from several insurance companies uncovers a less-costly alternative.

This post is brought to you by Kanetix, which offers both Canadians and Americans an opportunity to comparison shop their insurance needs.

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By Kevin M

It’s often said that the only two things that are certain in life are death and taxes, and while that’s true enough, if you own a car you can add car insurance to that short list. Car insurance is virtually mandated in most of the Western world, and since you have to pay it, it helps to keep it is inexpensive as possible.

How do you do that? There may be 100 ways, but I’ve identified at least eleven.

1) Carefully chose the car you buy. Much of the cost of car insurance is set when you purchase your vehicle. Higher priced vehicles, certain model types as well as newer cars generally cost more to insure. Before buying your next car, you might want to get insurance quotes to see what it is you’re setting yourself up for. Once you own the car, it will be too late.

2) Keep your mileage down. Some insurance companies may offer discounts for lower mileage. Reduce your driving as much as is practical, keeping in mind that not only will lower mileage save on insurance premiums, but it will also lower your auto expenses across the board. This can also be a real incentive to set up a work-at-home arrangement; just removing a daily commute can have a major positive affect on premiums.

3) Raise your deductible. We’re often tempted to keep our insurance deductibles to a minimum so that we don’t see large, unpleasant bills when it comes time to file a claim. But if you have a good driving record, raising the deductible can lower your premium substantially. One way to do this without increasing your exposure is to add the increase in your deductible to your emergency savings, that way you’ll have the funds available in case of an accident. For example, if you increase your deductible from $500 to $1,000, add $500 to your emergency fund to have it ready if necessary. If you never have a claim, you’ll be $500 richer.

4) Keep your driving record clean. This is the single best step toward keeping your insurance premiums down. The premium penalties for accident claims and traffic citations is substantial, so make a habit of driving conservatively. If you have some driving events in your recent past, it’s crucial that you stay clean from now on. Most jurisdictions will clear your record after three years, and the insurance savings for doing so will make it well worth it.

5) Keep your credit rating clean. There is apparently some correlation between driving habits and credit ratings! Keep your credit as clean as possible, especially if your driving record isn’t. Be sure to pay all of your bills on time, and if you’re credit report reveals any discrepancies, collections or charge-offs, do what you can to clean those up. Many old creditors will accept pennies on the dollar to settle old debts, and cleaning them out can have as substantial affect on your credit rating—and your insurance premiums.

6) Take defensive driving courses. Many insurance companies offer discounts if you’ve recently completed a defensive driving course. But before you rush out and sign up to take a course, make sure that the cost of the course won’t exceed the discount you’ll receive on your car insurance premium for taking it.

7) Look for discounts. There are all kinds of discounts available depending on the insurance company. Discounts are often available if you have a college degree or for certain employment affiliations, such as unions, government jobs, affiliate companies or the military. Some offer discounts if you have a garage, if you’re a member of AAA or even for multiple discounts. Never assume that an insurance company will automatically disclose what discounts they offer—be bold and ask.

8 ) Safety equipment. Having certain equipment in a vehicle can have a positive affect on insurance premiums. Security systems, passenger and back seat air bags, anti-lock brakes, and automatic seat belts can all lower your premium. Check with the insurance company to see which systems and equipment will lower the premium and see how your vehicle stacks up.

9) Bundle with other insurance policies. This is a time honored insurance saving technique but it’s worth re-emphasizing. You can often get a break on your car insurance premium by adding homeowner’s coverage or some other type of policy to your package. Insurance companies do this as a way of both attracting and retaining customers.

10) Shop, shop, shop! Shopping for car insurance can be a bit of a pain so you may be tempted to avoid it, but don’t! Rates are moving all the time, and if you stay with the same carrier for many years you may miss out on lower premiums. An insurance carrier may cut their premiums in order to attract business from their competitors, and by actively shopping you’ll be in a position to take advantage of the cost savings.

11) If all else fails, relocate… I’m not suggesting that you relocate to take advantage of lower insurance rates, but depending on which country you live in, car insurance can vary significantly based on geographic location. In the U.S. for example, car insurance rates can vary substantially from one state to another. And what you typically find is that the same areas that have high car insurance rates often have higher than normal rates for health insurance, property taxes, rents, property values and a host of other expenses and fees. So if you’re planning to relocate to lower your cost of living, lower car insurance rates may be another factor weighing in favor of the move.

What are you doing to keep your car insurance expense under control?

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By Kevin M

One of the biggest line items in a typical household budget is car expense, and one of the reasons it’s so large is because of car loans. After decades of easy credit, we’ve been conditioned to think of car loans as a normal part of the car buying process. I have a car, therefore I have a loan.

But is that the way we should be thinking? Are there deeper risks to having a car loan that we tend to gloss over? I think so. The loan you sign on for when you’re safely employed can quickly become unsustainable after just a few months of unemployment. And with job losses and extended periods of unemployment becoming the “new normal” we should be changing our assumptions about car loans.

What are some of the reasons you should avoid a loan and pay cash for your next car?

A loan puts your car at risk

Unlike credit cards—where the lender has no specific claim on your assets—it you fall behind on your car loan, your car can be repossessed. This reason alone should remove any casual notions we have about car loans. They’re higher risk than almost any other loan type! Even if your house is foreclosed on, there is an extended period of due process that can take a year or more in many states, giving you valuable time to maneuver. No such protections exist for a car loan; stop paying and the repossession process is pretty swift.

A car is a survival asset for most people

For most people, a car is critical to their ability to earn a living, if only for commuting. If the car is lost—which is much more likely during a period of extended unemployment—your ability to earn a living will be greatly impaired. You can lose your wide screen TV, your $3,000 deluxe treadmill or even your home and still be able to earn a living. Not so with a car; lose it and your job prospects collapse immediately.

The double car payment trap

One car loan is bad enough, but as a testament to the casual way people often see them, many households have two or more. All of the problems of one car loan are multiplied by the number of loans outstanding. In some households total car payments can exceed the monthly house payment.

High cash flow drain

A car is an expensive proposition to begin with; you already have insurance, gas, repairs and maintenance. A car payment magnifies all of this. In fact if you total up all the expenses you pay each year to own a car you’ll see why your money just seems to disappear into thin air. For most people, a car is the second most expensive budget item, after a home. By paying cash for a car, you cut this expense considerably.

Owing more on the car than the car is worth

This is also referred to as being “upside down”–for obvious reasons. Cars depreciate rapidly, so it’s possible to be upside down shortly after purchase, even after making a 20% down payment.

This situation creates at least two problems that I can think of. First, it limits your options if you want to sell the car or refinance the loan—you’re no longer talking about an 80% loan, but maybe a 110% or 120% loan. Or you could face a loss on sale.

Second is an insurance claim. In the event you’re involved in a crash and the insurance company totals your vehicle, they will only cover an amount up to the value of the car before the crash. That may mean a settlement that is not enough to payoff the loan, let alone provide for the down payment on a new car. Gap car insurance exists for this purpose, but few people purchase it unless the car is leased or the car is purchased with little or no money down.

Owing less on the car than it’s worth

On the surface I’ll admit that this one doesn’t seem to be a problem. But let’s imagine that you’ve been unemployed for about a year and you’ve fallen behind on your car payments. Your car is worth $15,000 but you still owe $5,000 on it, and the bank is repossessing it. You’ll lose a $15,000 car and the $10,000 equity you had in it will evaporate for the inability to pay a $5,000 loan.

Equity for your next car

The equity in the car you own today will probably make up most of the cash you pay on the next car you buy. By owning your car free and clear, not only do you maximize the amount of cash you have for the next purchase, but you also keep your options open to make the buy at any time. You won’t need to wait until the loan is paid, or worse, having to deal with the complications that come with selling an indebted car.

You don’t need a car loan if you work from home

Millions of people are now working from home, whether they’re self-employed or telecommuting. You don’t need to have a car loan if you work from home, in fact you don’t even need much of a car at all. A ten year old “beater” that works for short local hops is really all you need (you can rent a car for long trips if you don’t trust your beater to get you there). It makes no sense to borrow to pay for a car you’re hardly using.

 
What’s the alternative? Most obviously, don’t borrow to buy a car—paying cash is the way to go. Fortunately, there’s a car for every budget, especially if you can overcome the dreaded affliction newcaritus. And there are other ways to deal with car loans in the event you already have one.

1. Buy only as much car as you can afford to pay cash for; it that’s $2,000 for a 15 year old car, then that’s what you can afford.
2. Dedicate a savings account specifically to accumulate money for your next car.
3. If you have a car loan now, make paying it off a priority, even ahead of your credit cards.
4. If you have loans on two cars, make a priority of paying off the smallest as soon as possible—then go after the bigger one.
5. If you do use a loan to buy a car, make the largest down payment possible and the term as short as possible, then pay it off early.

Have you ever thought about the risks of financing a car? What do you think about paying cash, even if that means buying an older, less expensive one?

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Guest Post by Edward Pacheco

Getting a loan on a new car can be easier said than done. In short, lining up financing for that new ride of yours all depends on your credit score. If you have a perfect credit score then you will have no problem getting approved for financing, and getting a great rate.

But if your credit score is less than perfect you might have a tough time getting a loan at all. At best, you might get approved for a loan with a wildly high interest rate. Regardless of how your credit is there are some things that you can do to help ensure that it is steady and constantly rising.

By taking the time to follow a few simple steps you should be able to secure financing for that new car that you have had your eye on in no time at all!

Car loan advance preparation

The first thing that you need to do is review your credit history, obviously. This should be done well in advance of the point where you start visiting dealers. You can do this online, but you shouldn’t do it more than a few times a year, preferably only once a year.

Reviewing your credit history will give you an idea what your situation is. If you have somewhat poor credit you will be able to pin down why on the credit report. For example, maybe you have a student loan from 5 years ago that you forgot to pay off, or maybe you have more credit cards than you think. Whatever the case may be, knowing your credit history will allow you to identify and rectify any potential problems.

You should also check your credit history to see if there are any errors on it. Clerical and human errors can happen more often than you think! These mistakes can be costly if you do not know that they exist. Furthermore, since identify theft has become such a big problem it is smart to check your credit history in an effort to ensure yourself that your identity hasn’t been stolen and gotten hit with unidentified charges.

If you have some strange credit strikes on your report that you are unaware of you should speak with the credit bureaus right away in order to clarify the situation and hopefully rectify the potential problem.

Crunching the numbers

The next thing to do when applying for a car loan is to determine how much you can afford to pay. There is no sense in applying for a loan that is too large, as they are harder to get approved for since it’s technically harder for you to pay it off. In addition, a larger loan may have a higher interest rate attached to it.

Once you determine what you can afford you can start to track down loans that are offered by third parties. (You can find a free auto loan calculator at Automotive.com to pre-calculate some payment scenarios and find out how much you can afford.)

A credit union or a bank will give you the best chance of getting approved especially if you have less than perfect credit. Take the time to approach these places and build a relationship with the people that work there. If they see that you are a respectful person with an okay recent credit history they will be more likely to grant you the loan that you are in search of. Doing in-house dealer financing is easier and sometimes better, but not if you have a mediocre credit history.

Making the loan application

When you apply for loans with these third party lenders you will need to have documentation ready. Documentation should include recent pay stubs to prove that you are employed or have an income. Having this documentation with you when you apply for the loan will help to speed up the approval process. It will also help you seem organized and serious about the loan.

Of course, there is the chance that the bank or credit union may tell you that you do not qualify for a loan or that you qualify for a high interest loan simply based on credit score. If this is the case you can try another third party lender or even the finance department at a local car dealership.

Regardless of if you are in the market for a new car or not, one of the most important things to do to ensure that you will get the loan for whatever (be it a house) is that you want to keep a clean credit history. If you are unable to secure the loan that you are looking for on the first try you can always make another attempt in the future. However, the next attempt may yield the same result as the first attempt if you haven’t done anything to build your score. Make sure to pay all of your bills on time and make sure not to overextend yourself as a borrower.

Have you recently applied for an auto loan? What was your experience? Can you make any recommendations that might benefit other readers?

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Are You Upside Down on Your Car?

By Kevin M

With gasoline hovering ever so close to the $4 mark (premium is already there!) who doesn’t think fuel economy matters? After we’ve done all we can do to cut back on our gasoline consumption—consolidating trips, tuning up the car, maintaining proper tire pressure levels and even slowing down a bit when we drive—we’re still left with the inescapable fact we have to drive to work and survive. And that means we need gas, lots of it.

Long term the biggest factor affecting fuel economy is the type of car we drive. We can’t make a car that gets 15 miles per gallon suddenly get 30, so the ultimate solution is to replace the gas guzzler and go with a more fuel efficient vehicle.

Right now there are three options to reduce fuel consumption, electric cars, hybrids and tried and true high miles per gallon (MPG) gas powered cars. Which is the best vehicle type to attain maximum fuel efficiency?

Electric cars

Electric cars represent the ultimate solution. A car that runs 100% on electricity means freedom from gas prices, and even from disruptions in gas supplies. All you need to do to power them up is plug them into a wall socket at home, let them charge and you’re good to go.

Sounds perfect, right? Not exactly. Electric cars can go barely 100 miles between charges—and that’s when they’re brand new. The scuttlebutt is that the batteries quickly degrade, and actual mileage between charges is substantially less, like closer to 50 miles. There is no backup power system, so when the battery drains, you’re stuck where ever it happens.

If you work from home, are retired or work very close to home, an electric car may work for you. For everyone else, it won’t. And it will never do a long trip for anyone. Electric cars will have their day, but it looks like that won’t be for a while.

Hybrid cars

Hybrids are a step up. The can run on electricity, but switch to gas as a back up, or in driving conditions where electric power isn’t optimal. As good as that sounds, it’s not a perfect situation either. There are three problems with hybrids: 1) price, 2) continued reliance on gasoline, and 3) while hybrid MPG is substantially better than for the average car, it isn’t radically better than other less expensive alternatives.

The Toyota Prius is the current standard of hybrid cars. The 2011 version lists at a base price of about $29,000, and gets about 42 miles per gallon.

That’s a rich price for what is essentially an economy car and MPG that’s hardly a radical step up from the most fuel efficient gas-powered cars. Meanwhile, gasoline is still a critical component of it’s power. And it would seem that fuel efficiency would be degraded still further due by the weight of the batteries during times when the car is running on gasoline only.

High MPG gas-powered cars

The basic problem even with high MPG gas-powered cars is that they rely entirely on gas. Beyond that however, the advantages stack up favorably—not only on mileage efficiency, but more particularly with price.

An article on Yahoo Autos, For non-electric, non-hybrid cars, 40 is the new 30 (mpg) provides a list of six cars that are getting at least 40 miles per gallon:

2011 Ford Fiesta SE Sedan, 40/29 highway/city mpg, purchase price $16,290

2011 Ford Fiesta SE hatchback, 40/29, $17,300

2011 Chevrolet Cruze Eco (manual transmission), 42/28, $18,175

2011 Hyundai Elantra, 40/29, $14,830 base

2011 Smart ForTwo, 41/33, $12,490

2012 Ford Focus SE Sedan, 40/28, $18,790

The article lists five additional gas-powered vehicles that are not yet available, but coming soon and provide comparable fuel efficiency at similar vehicle cost.

Note that with each car, the MPG is comparable with that of the Prius, but the cost of the cars themselves is substantially less in each case. The Elantra is priced at less than half the Prius and virtually every one of the other cars is at least $10,000 less.

High MPG gas-powered cars are the best option—for now

It’s not hard for any of us to drive 50 miles or more in a single day, nor is 100 miles out of the question. Even if you only average 20-30 miles per day, a phone call can require us to double that, jeopardizing the ability to get home before the battery dies. For that reason electric cars will impose real restrictions on driving flexibility.

100% electric powered cars are definitely worth waiting for, but they aren’t for now, not for most people.

As to hybrid cars, while I can see the value in having an electric power source for a car—mostly for gas supply disruptions—I don’t see the advantage of paying an extra $10,000 (or more) to have it. As well, the wider variety of gas-powered economy cars means we have far greater choice in vehicle selection.

Love ‘em or hate ‘em, high MPG gas powered cars represent the fuel efficiency cutting edge. They may be the last of their generation before a new wave of high charge electrics come on the market, but at the moment they produce the greatest fuel efficiency for the price paid.

That may change in five or ten years, but by then you’ll probably be back in the new car market, this debate will be over and the all-electrics will be the way to go.

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By Kevin M

$55.12. That’s what I just paid to fill the tank of my Nissan Maxima—a mid-sized car. I generally view $50 fill-ups as the tipping point on gas prices. You can buy dinner for four at a moderately priced restaurant for that kind of money. That’s the kind of money that makes noticeable dents in a budget. And it’s ongoing; you’ll pay it every time you fill up.

Most of us seem to get seriously concerned only when gas prices set a new record. When prices pull back—even a little—we settle back into the comfort zone we call “normal”. Right now, with gas prices hovering in the $3.50 to $4.00 range—we seem to be right about on the border of the “serious concern zone”. We’re watchful, but not overly concerned.

Despite all of the rosy predictions of energy independence in the nearly 40 years since the 1973 OPEC Oil Embargo, we’re more tied to oil from unstable sources than at any time in history. The current rumblings in the Middle East and the gas price spikes they’re causing make our inability to deal with our energy problems on a collective basis painfully obvious.

That means we’re on our own folks!

Here’s my thought on a constructive long term energy outlook: assume the worst with gas prices and be prepared—even if they seem to be behaving, assume it will get worse.

The evidence of that assumption is playing out right now at a gas station near you! We aren’t powerless though, not if we if we have a plan or two. But just understand that options are harder to come by as gas prices move higher, and make a commitment to do something. Here are some ideas to get you started.

Saving Gas on Transportion

Get a bicycle. You did it as a kid, why not do it as an adult? A bicycle won’t replace a car, but depending on where you live it might enable you to eliminate a few short car trips each week. Get a bike with a large basket for local runs to the store, the bank, the pharmacy or any place within a couple of miles of home. Not only will this cut back on gas, but it’s also great exercise.

Invest in a moped. OK, let’s say that riding a bicycle even for local errands sounds like too much work—let’s put a motor on the bike. Also known as a moped! If you’re interested, Matt Jabs at Debt Free Adventure has a great post chronicling his moped purchase. If you think it might work for you, Matt says you can get over 100 miles per gallon, and you can buy a late model used version for well under $1000. By the way, if you think the weather in your area might be a problem, consider that Matt lives in Michigan!

Sell your gas guzzler now! I know, this sounds radical. But it’s a fact that a gas guzzler will be a liability without redemption if gas prices go much higher from here. You’ll pay through the preverbal nose every time you take it on the road and worse, no one will want to buy it from you. Conversely, the price of economy cars will soar. Bad trade off? Sure, but that’s why you want to do something about this before things get out of hand.

Saving Gas Getting to Work

Bring your lunch to work. Kay Akers came up with this brilliant idea in a post she wrote on the same topic at Couple Money a few days ago. Most of us are well aware of the amount of gas we use commuting to and from work, but few of us ever consider how much added fuel we use driving out for lunch every day. The trips may be short, but lunch hour traffic can be brutally heavy in and around many office parks, and that kind of driving is particularly hard on gas mileage.

Set up a work-at-home arrangement with your employer. High gas prices function like a pay cut at work. The only way to offset this is by cutting back on commuting. And the most effective way to do this is through work at home arrangements. As I see it, there are at least three ways to approach this and how far you go with it will depend on how high gas prices go.

1. Ask your employer to allow you to move your job to full time work at home. If they agree, higher gas prices will have only the slightest effect on your lifestyle. And even if they say no, it may open up the negotiations.
2. If your employer won’t agree to full time at home, ask for one or two days per week. Each day of work at home will reduce gas consumption from commuting by 20%. That’s worth negotiating for.
3. If your employer says no to work-at-home, and you’re sufficiently concerned with high gas prices, it may be time to start looking for new job that will.

One light at the end of the tunnel here is that even if you aren’t successful in getting a work at home concession during a period of low or stable gas prices, the arrangement may become more popular if gas prices take off. Still, I’d rather have that lined up before it gets to that point.

Start your own home business. One of the underappreciated aspects of gasoline spikes is the economic impact, and that has a way of translating to the job front. Everything in the economy is tied to the price of a gallon of gas, and when fuel prices rise, the economy usually weakens and layoffs follow. One of the best preparations for that possibility is having your own business, one you can operate from home. Even if you only do it part time for now, it may be something to expand in the event you lose your job—which if history is any indication, is far more likely the higher gas prices go. If nothing else, the extra income will help you handle higher fuel bills. Call it your Plan B.

What do you think? Can you come up with ways we can deal with higher gas prices? Simple ideas, radical ones—we’re looking for ideas here…

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By Edward Pacheco

Everybody who drives must have car insurance. After all, it’is required by law. The problem in some cases is that insurance can be quite expensive. In rare instances it can even be flat-out unaffordable. In order to find the best car insurance policy for you, or your family, it is important that you do your due diligence. By taking a systematic approach to car insurance you will be able to make sure you are getting the best deal available.

In a day and age where money is so tight it’s reassuring to know that you are not overpaying for these services. I don’t know about you, but I am able to sleep a little easier at night knowing that I am not leaving any money on the table. If you really dig deep, and look hard, there are car insurance policies out there that will fit just about everyone’s needs at a realistic price. The key is to know what you are shopping for and to not make any quick decisions.

It pays to shop until you find the right policy—and agent

Take the time to shop around. As you know, there is an insurance agent located on every street corner, in every town, across the country. These insurance agents want your business and will do anything that they can to ensure that you do not go with their competition.

Set up some meetings with a few agents so you can have a chance to meet them face to face. In your meetings try to get a feel for how they will respond when you need them. In other words, if you are in an accident how good will their customer service be.

There is nothing worse than getting into an accident and then not being serviced by your insurance agent. You need an agent that is going to be there for you in an instant. Finding a company that will provide you with this level of customer service is a must in my opinion even if it costs a few extra dollars per month.

Give each agent information about your car, the type of coverage that you want and the people that you would like to have covered on the policy. This will help them formulate a quote for you. As you are aware, if you have a teen driver that has a brand new Jeep Grand Cherokee then the insurance rate is going to be a higher.

The key is to ask each agent about available discounts. For example, if the young driver is a good student then you may be able to get a bit of a break on the total cost of the policy. Also, if you have a great driving record, that is free of tickets and accidents, you may be able to get a safe driver discount. Asking the agents questions like these can help to save you hundreds of dollars per year if you qualify.

If face to face meetings spook you, let your fingers do the walking—on the web

If you do not want to meet with agents face to face then you can always use the internet. Each insurance company has their own website. On the websites you can fill out a form for a quote. The good thing about using the internet is that you can get multiple quotes sent directly to your email right from the comfort of your own home.

The drawback is that you will not be able to get a feel for how you will be treated when you need to use your insurance. Make sure that all of the information that you put on the form is accurate. If you put that you have a Kia Optima but do not include the year then you may not be able to get a quote or, if you do, it may not be accurate. The last thing you want to do is be quoted a price for insurance on a new car when in fact the car that you drive is nine years old. The quote will come back too high and you will pay no mind to it. Who knows, you might be missing out.

Once you get all of your quotes from the agents, or their websites, it is time to sit down and compare them. Make sure that the quote is for the level of coverage that you requested and that the price is reasonable. At the end of the day, you do not want to be paying for full coverage on a older Ford F150 work truck when all you really need is collision.

Edward Pacheco is an auto enthusiast who shares his knowledge about new cars, auto loans, and insurance at Automotive.com.

Who have you found to be the best insurance company for the money?

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