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Auto Insurance

It’s required that most drivers carry auto insurance, but it can result in a high monthly or annual premium. Because many people are driving less these days, some auto insurance companies have announced reductions in premiums, or even rebates to customers. The amounts can vary from state to state, and from person to person, so you may need to contact the company or your agent in order to find out how much you might be able to save.

Those only represent temporary discounts, though. If you’re looking for a more long-lasting reduction, you can often find a lower premium by switching to a different insurance company, with the help of a site that compares rate quotes from a variety of carriers. It’s also a good idea to review your policy and make sure you’re not paying for coverage that you don’t need — your insurance agent, or an online tool, can help you with this.

Refinancing Your Auto Loan

Refinancing a loan isn’t just for mortgages. If your existing auto loan is at a high interest rate, it might make sense to refinance. Refinancing your loan could allow you to pay a lower interest rate, alter the length of your loan, or both. This may result in a lower monthly payment, or in being able to pay off your loan sooner. A qualified loan agent will be able to look at your current situation and discuss your refinancing options.

Auto Warranty

When your car breaks down, it’s often a major unexpected expense. Your car’s factory warranty doesn’t last forever, and once it expires, you’re on your own for the cost of most repairs. Extended auto warranties are available for most cars, even older models. For a fixed monthly fee, if you have a breakdown, the auto warranty company will refer you to a qualified mechanic, and you will usually have no out-of-pocket expense for the covered repair.

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Self-Check

Even if you’re somewhat inexperienced with cars and auto repairs, it’s important to do a basic inspection of the car. Some of the things you should check to make sure the vehicle is in good condition:

• Check the tire treads for excessive wear
• Check the headlights and floorboards for signs of moisture, which could indicate if the car has been in a flood
• Look closely at the paint job for signs someone may have painted over rust
• Drive the car with the radio off and listen for any strange sounds

If you proceed to buy the vehicle after your self-check, you could still protect against serious problems that may arise by getting an extended warranty.

Ask the Pros & Trusted Friends

To determine the quality of a used car, you should consider hiring a trusted mechanic who can conduct a thorough examination of the vehicle. Trusted mechanics may find things you didn’t notice such as structural issues or engine problems. They could raise questions you may not have thought to ask, and identify whether the car is driving the way it should. The cost of having a professional check the vehicle could end up saving you a great deal of money in the long run.

It’s also a good idea to bring a trusted friend or family member with you during the inspection and buying process. Someone who’s not invested in the outcome could be more objective than you under the circumstances, alerting you to an issue you may have missed or preventing you from making an impulsive decision.

Check the Records

All cars have a unique Vehicle Identification Number (VIN) that can help you determine the car’s history. Online services, such as Carfax, use the VIN to provide you with a detailed report of the car’s records. These records could tell you whether a vehicle has been totaled or how many times it has been in a collision. Only after checking the records, assuming your other inspections pass muster, should you then consider how you will finance the purchase.

When deciding whether to purchase an extended warranty for your vehicle, it’s helpful to understand the pros and cons. Being prepared for the unpredictable is usually the main reason to buy an extended warranty. Even newer vehicles can have mechanical problems in the future. If your car needs an expensive repair or replacement, a warranty could offer you some peace of mind that you are covered.

Purchasing an extended warranty, however, is not entirely without drawbacks. It could come with a high price tag and may not necessarily cover everything that could go wrong with a vehicle. Additionally, some warranties will not cover a repair unless the owner provides proof that recommended guidelines have been followed. It’s therefore important to read the fine print of a warranty before purchasing one.

One of the best ways to help decide whether or not an extended warranty is right for you is to research the car’s make and model. Do you see any system or part recalls on record? Ultimately, purchasing an extended warranty depends on the vehicle and your personal risk tolerance.

Are There Restrictions?

Typically, a standard warranty will cover you for three years or 36,000 miles, whichever comes first. An extended warranty will cover you for an agreed-upon mileage or period of time beyond the standard warranty. Aside from this main restriction, a warranty may also limit the kind of repairs or replacements for which you’re eligible. Make sure you’re aware of all the restrictions on an extended warranty so you can make an informed decision on its value.

Coverage Options

There are many options in choosing the best warranty for your needs. For example, depending on the climate where you live, a corrosion warranty may be useful. Another popular extended warranty option is roadside assistance; however, you should consider that companies like AAA may already include roadside assistance with their service, so not every driver needs this coverage. It’s a good idea to ask your car dealer what benefits are included with the extended warranty options they offer. Then weigh the benefits of having the protection versus what it may end up costing.