The 20 Worst States for Filing an Auto Insurance Claim

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Are Fast Cars More Expensive to Insure?

Are fast cars more expensive to insure? Not quite, and here's why.

Even just a decade ago, cars weren’t nearly as fast as they are today. In fact, 300 horsepower was expected only from V-8 engines, writes Forbes. But because of “direct fuel injection, turbocharging and other advances in engine technology and design, power and speed can be bought in a range of body styles, vehicle sizes and powertrain configurations.”

Speed — as measured by quickness of acceleration and pure engine power, and not top speed, which only matters on race tracks — is now more accessible than ever, and as Tesla just proved, as cars move to electric power, we might see faster and faster cars on the road. Tesla’s Model S is now the third fastest car in the world, writes The Verge (behind just the Ferrari LaFerrari and the Porsche 918 Spyder — both million-dollar hypercars). Upgrades to the battery allow the Model S to go from 0 to 60 mph in 2.5 seconds, making us wonder: Do the fastest cars cost more to insure?

We looked at cars people might actually drive (we’ll save concept cars and supercars for another list and another day) and calculated insurance premiums based on a standard profile: a 30-year-old single man living in Austin, Texas (ZIP: 78702), who rents his home, owns his car, has a good driving history, a good credit score, and has had consistent insurance coverage for a basic level of insurance with a national carrier. (You can view two of your credit scores, with helpful updates every two weeks, for free on Credit.com.)

Keep in mind, the time it takes for a car to accelerate from 0 to 60 mph can vary widely based on each driver’s skill, so results may vary. In no particular order (because their specs and model years differ), here are 10 of the fastest cars on the road and their stats.

1. 2017 Chevrolet Camaro
MSRP: $37,900
Engine Details: 6.2-liter V8, 455 horsepower
Acceleration Speed: 0-60 in 4.0 seconds
Average Yearly Insurance Premium for a Chevy Camaro: $1,620

2. 2016 Jaguar XJR
MSRP: $118,000
Engine Details: 5.0 Liter V8 550 HP Supercharged
Acceleration Speed: 0-60 in 4.4 seconds
Average Insurance Premium: $2,148

3. 2017 Cadillac CTS-V
MSRP: $85,995
Engine Details: 6.2-liter V, 640 horsepower
Acceleration Speed: 0-60, 3.7 seconds
Average Yearly Insurance Premium: $2,112

4. 2016 BMW M5
MSRP: $94,100
Engine Details: 4.4-liter V8 TwinPower Turbo, 560 horsepower
Acceleration Speed: 0-60 in 4.2 seconds
Average Yearly Insurance Premium: $2,112

5. 2016 Dodge Charger SRT Hellcat
MSRP: $67,645
Engine Details: 6.2-liter supercharged Hemi V8, 707 horsepower
Acceleration Speed: 0-60 in 3.7 seconds
Average Yearly Insurance Premium: $1,512

6. 2017 Audi RS 7
Engine Details: 4.0-liter V8 with two turbochargers, 560 horsepower
MSRP: $110,700
Acceleration Speed: 0-60 in 3.7 seconds
Average Yearly Insurance Premium: $2,268

7. 2017 Volkswagen Golf R
MSRP: $39,375
Engine Details: 4-cylinder turbo, 292 horsepower
Acceleration Speed: 0-60 in 4.5 seconds
Average Yearly Insurance Premium: $1,560

8. 2017 Ford Mustang GT Fastback
MSRP: $33,195
Engine Details: 5.0-liter V8, 435 horsepower
Acceleration Speed: 0-60 in the mid-4 second range
Average Yearly Insurance Premium: $1,512

9. 2016 Dodge Challenger R/T Scat Pack
MSRP: $39,995
Engine Details: 6.4-liter V8, 485 horsepower
Acceleration Speed: 0-60 in the low-4 second range
Average Yearly Insurance Premium: $1,608

10) 2017 Volvo S60 Polestar
MSRP: $60,000
Engine Details: 3.0-liter Turbocharged inline 6-cylinder 345 horsepower
Acceleration Speed: 0-60 in 4.7 seconds
Average Yearly Insurance Premium: $1,428

Compare these insurance prices with the prices of the five most popular sedans for 2017, based on our new State of Auto Insurance Report, for the same insurance customer profile.

Chevrolet Cruze
MSRP: $16,975
Acceleration Speed: 0-60 in 7.6 seconds
Average Yearly Insurance Premium: $1,056

Honda Accord
MSRP: $22,455
Acceleration Speed: 0-60 in 6.1 seconds
Average Yearly Insurance Premium: $1,176

Hyundai Elantra SE
MSRP: $17,150
Acceleration Speed: 0-60 in 8 seconds
Average Yearly Insurance Premium: $1,344

Nissan Altima
MSRP: $22,500
Acceleration Speed: 0-60 in 7.7 seconds
Average Yearly Insurance Premium: $1,260

Toyota Camry
MSRP: $23,070
Acceleration Speed: 0-60 in 8 seconds
Average Yearly Insurance Premium: $1,236

Final Word: Do Fast Cars Cost More to Insure?

Our assessment: We can’t say for sure whether or not all cars with more powerful engines that can accelerate faster always cost more to insure than their slower counterparts, but all of the faster cars above come with more expensive insurance premiums than all of the slower cars we looked at.

Another potential insurance price factor: All of the faster cars also cost more (in some cases, a lot more) than all of the slower cars. We know that price has something – though not everything – to do with insurance pricing (which is still somewhat of a mystery, even to us).

As we’ve seen, equating insurance rates with one definable feature is tough: Insurance rates weren’t strictly correlated with safety rating, either. But while we might not be able to say with absolute certainty that faster cars will mean more on your monthly premium, we do have proof that using that speed illegally is practically guaranteed to cost you.

The Insurance Consequences of Speeding Convictions

If you drive a certifiably fast car, always remember to follow the rules of the road, not only because it’s safer for you and everyone driving near you, but because beyond any traffic citations you might receive for speeding, speeding also has some pretty detrimental effects on insurance rates.

In 2016, if you were convicted of speeding, your insurance rates went up by the following percentages (national U.S. averages from The Zebra’s State of Auto Insurance Report):

  • Speeding in a School Zone: 18%
  • Speeding 6-10 MPH over the limit: 17%
  • Speeding 11-15 MPH over the limit: 18%
  • Speeding 16-20 MPH over the limit: 19%
  • Speeding 21-25 MPH over the limit: 20%
  • Speeding In 65 MPH Zone: 23%

That means if we’re looking at the national average premium of $1,323, a single speeding ticket could raise your rates from $225 to $304. (And that continues for three years after the violation occurs.)

Fast cars with great handling make for excellent driving – but stay safe (and under the speed limit!) – or you could pay in more ways than one.

Image: mevans

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The Fed Just Teased a Rate Hike. Will Savings Rates Finally Improve?

If you want to make the most of rising interest rates, here's your game plan.

Interest rates are likely going up again, and soon, Federal Reserve Chair Janet Yellen told Congress Tuesday, sending up a clear flare for anyone paying attention.

“Waiting too long … would be unwise,” she said. This, after the Fed telegraphed in December that 2017 might bring three separate rate hikes.

That’s bad news for all kinds of borrowers because interest rates on many different credit vehicles will likely follow suit. It should be good news for savers with money in old-fashioned deposit accounts and those who like certificates of deposit (explained here), and money market account holders for the very same reason. But that remains to be seen.

When the Fed raised its key funds rate in December — for only the second time in 10 years— that triggered increases across the entire financial world. Auto loan rates went up. Mortgage rates went up. Credit card rates went up. So why didn’t savings rates follow suit?

Well, they did. A little. A very little.

The average savings account annual percentage rate increased from 0.180% in January to 0.181% in February. That’s up from 0.179% in December of last year, according to DepositAccounts.com. So, in two months, that’s an extra two pennies per year per $1,000 saved. Don’t spend it all in one place!

“The banks are being very cautious,” said Ken Tumin, DepositAccounts.com founder. “There has been no mass movement in deposit rates.”

Keep in mind, mortgage rates are — predictably— up about half a percent during the past year, according to Freddie Mac. So are auto loans, according to the Federal Reserve. So what gives? Why are consumers seemingly being punished on both sides of the equation?

Well, there’s plenty of speculation as to why. Recall the basic concept that banks accept deposits — and give depositors interest— so they can lend that money out at a higher rate to borrowers, and profit from the difference.

One possible reason is something known as “asynchronous price adjustment.” It’s the same phenomenon often observed when there are price shocks in the oil market. Gas prices go up quickly, but drop slowly when oil returns to its normal price. There are many mechanical market reasons for this, but suffice to say that corporations adjust more quickly than consumers to price movements, so they are good at making a little extra cash when big turnarounds take place. So, like gas prices, savings rates will bend pro-consumer eventually, but not before banks enjoy a bit of time with the extra “spread” between the savings rate they pay and the interest rates they charge.

Skepticism Remains About Rate Increases

A more direct reason, Tumin said, is that banks are still unconvinced that rates are going up more. Back in 2015, the Fed raised rates once and indicated that 2016 might include a series of hikes. Those never materialized, as questions about a sluggish economic recovery remained. So banks might be scared of a similar head fake this year, Tumin said. No bank wants to lead the pack with higher savings rates.

Also, like any business, banks only pay more for raw materials (money, in this case) when they have to— because of competition, or because they need cash because the lending business is going great guns.

“Rates are determined by banks needing to raise capital, to improve what’s called their loan-to-deposit ratio,” Tumin said. That’s not happening at the moment.

It wasn’t always this way. As recently as the housing bubble years, high-yield, Internet-based savings accounts paid 3-4%, and CD rates persisted into the 5% range. Today, the very best passbook rates hover around 1%, and CDs aren’t much better, though some banks offer teaser (temporary) rates that are a smidgen higher.

You Still Have Options … Though Not Great Ones

Consumers sitting on cash with a very low risk tolerance do have some options, though none of them are great. Tumin says savers should keep their eyes on CD rates: When banks have short-term needs to raise capital, they are more likely to temporarily offer higher CD rates. That’s because it’s much easier to lower CD rates after the capital is raised than to lower passbook savings rates.

One-year CD rates had the largest increase last month, DepositAccounts says, with the average annual percentage yield (APY) increasing from 0.496% in January to 0.505% in February. The average 1-year CD rate among the top 10% of the most competitive banks nationwide increased from 0.880% to 0.910%.

CD rates can fluctuate quickly. Capital One 360’s 60-month rates have vacillated between 1 and 2% during the past year, for example. (They sit at 2% right now).

CDs come with a big “but,” however.

“In a rising rate environment … no one wants to get stuck in a CD,” he said. A 2% rate that looks good today might look bad 18 months from now, when it’s possible the Fed will have raised its rate five or six times.

Recall that CDs require time commitments, and often have hefty penalties for early withdrawal. Consumers considering this route should carefully weigh the withdrawal penalties (Some are less onerous— 6 months’ interest, for example— which might make them a decent risk).

Of course, savers frustrated by low yields can consider more risky, non-guaranteed investments in the stock market. But who can blame a saver for thinking the market, and the economy, seems a bit volatile right now?

Your Best Bet? Pay Down Debt

The best course of action is to pay down debt, which is very nearly the same thing as earning interest on your money. Pay your highest APR credit card debt, of course. But making a few extra payments on a car loan or, better, a mortgage, is a good way to earn a “return” on cash that’s otherwise sitting idle.

Keeping your credit in good shape is also helpful. A good credit score can help you get the best terms and rates available. If you don’t know where your credit stands, you can check your two free credit scores, updated every 14 days, right here on Credit.com. You’ll also get personalized details about ways you can improve your credit scores in five key areas. (If you’re not sure where to start, you can check out these tips for how to quickly improve your credit score.)

Meanwhile, pay attention to what the Fed says in the coming weeks and months. Tumin is pretty sure Yellen isn’t crying wolf this time.

“A March increase is still on the table,” he said. “Most analysts think the Fed will probably skip March, and that the next (increase) comes in June. Unless the economy turns around and goes down I don’t think there will be a repeat of last year with only one hike. There should be at least two, and if savers are lucky maybe three.”

They’ll be lucky if banks pass along the higher rates to both mortgage borrowers and savers. Meanwhile, you can take luck out of the equation by continuing to watch published rates and consider switching to a bank when it raises rates. After all, someone’s got to be first.

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A Quick Guide to How Much Car You Can Really Afford

how-much-car

If you’re planning a car purchase, and even if you’re in the middle of financing your car, a few tips from financial experts can help you save money (and hopefully guard against becoming “underwater” on your loan).

Paying off a car is, of course, a highly individual process dependent on many different personal factors like credit score (you can view two of your credit scores, updated every 14 days, for free on Credit.com), financing rate, down payment, and how much you can afford to pay each month.

When budgeting, it’s also critical to consider expenses such as your auto insurance premium, gas, and maintenance into the total cost of ownership of your vehicle.

Still, there are some general guidelines that most people can follow:

  • Financing: Experts The Zebra spoke to said they recommend auto loans not exceed 10% (for just the loan) to 20% (for the loan plus related expenses like gas and insurance) of a consumer’s gross monthly income.
  • Timeline: You should take the shortest term you can afford for two reasons: Shorter terms come with lower interest rates and they allow vehicle equity to build faster, Bob Harwood, vice president of Carloan.com in Richmond, Virginia, said. Experts cited four or five years as the ideal balance of affordable monthly payments and reasonable total interest. If you have to spread your payments out over six years (72 months) or more to get monthly payments you can afford, you might want to consider a less expensive car.

“Your goal as a consumer is to decide what works best for your monthly budget so you can decrease the long-term expense,” banker Deric Poldberg from American National Bank in Omaha, Nebraska, said.

Hypothetical Financing

The Zebra asked three financial experts from around the country for their input about what type of loan over what time period a person living in Texas making $50,000 a year (the average statewide income) should expect to pay for a 2016 Honda CR-V LX (one of the most popular cars in the U.S.) for $23,000 (a little below the MSRP).

The Verdict(s): You’ll pay between $400 and $500 per month, depending on your credit and how quickly you can/wish to pay the vehicle back. Here are three ways of getting there:

  • Per Poldberg: “For this customer, the interest rate is going to be between 4.79% – 5.49% based on the U.S. average credit score (687). Because most people finance their vehicles for five years, that would lock our customer into a rate of 4.99% for 60 months, making the monthly payment $433.93. During the term of the loan the customer would end up paying an extra $3,035.97 in interest, bringing the total out-of-pocket expense to $26,035.97. Financing your vehicle for the least amount of time possible will save hundreds or even thousands of dollars in the long run, but often people just want a lower monthly payment and disregard the long-term cost of the loan. If you financed that same CR-V for the maximum 75-month term, you’d end up paying $3,820.11 in interest (quite a bit more). But most consumers just look at the low monthly payment of $357.60 and think it’s a better deal.
  • Per Rob Jupille, president of RTJ Financial in Santa Monica, California: “Assuming a relatively ‘normal’ level of other debt, when doing a budget, generally target your auto loan to be in the neighborhood of 10% of gross pay (excluding other auto-related costs like gas, maintenance, insurance, etc.) and put at least 20% down to reduce the likelihood of being ‘upside down’ on your loan. This way, you’d look for a monthly car payment not exceeding $400 and we’d recommend shopping for a combination of interest rate and term to stay within that number.”
  • Per Harwood: “Considering that your monthly car expense (including insurance, gas, etc.) should be no more than 20% of your take home pay, we can assume that an annual income of $50,000 translates to about $3,300 in take-home pay monthly after taxes. Budgeting around $250 for secondary auto expenses leaves room for a payment of around $450. For a consumer with decent credit, the $23,000 financed over 60 months at an interest rate of 6.9% lands the payment at $454 per month. (Of course, everyone should pay off their car loan as quickly as they can, but this is a realistically affordable scenario.)”

The bottom line: For a smart financing deal, pay the most you can for the shortest amount of time and after you’ve paid off your car loan, keep saving for your next car – or for a “rainy day.”

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27 Data-Based Tips for Saving on Car Insurance

tips-for-saving-on-car-insurance

The complexities of car insurance pricing, made even more complex by varying state coverage requirements, can make finding the right policy for you an incredibly frustrating ordeal for countless consumers. Oh yeah, and coverage can be pretty expensive.

As a licensed insurance agent, I know a few more tricks than the average consumer to help lower that auto insurance premium. So, in an attempt to help bring transparency to the world of car insurance, here are some data-verified savings tips, culled from The Zebra’s State of Auto Insurance Report.

1. Avoid Letting Your Insurance Coverage Lapse

Even after being insured for just one year, rates drop 7.7%. The discount for maintaining continuous insurance offered by most companies is also affected by the amount of liability coverage on your policy. The higher your limit of liability, the better your prior insurance discount will be.

2. Consider Bundling

Bundle your auto policy with homeowner’s insurance and you could save an average of $110 per year or bundle renter’s with auto to possibly save $72 per year.

3. Do Some Research

Take a few minutes to learn about which companies, minimum coverage requirements and other factors apply to your state.

4. Get Ahead of the Game

Purchase your policy at least 10 days before you need it activated for a better rate. This is especially helpful if you know your policy is coming up for renewal and you want to switch to a new company.

5. Pay in Full Up Front for Your Policy

Drivers save an average of $62 per year by paying in full rather than an installment plan.

6. Shop When You Move

If moving to a new state — or even a new ZIP code — make sure to shop for a new policy. The most expensive state for insurance (Michigan) is almost three times as expensive as the least (Ohio), so you could be in for huge savings depending on the state you’re leaving (or increases, so make sure you’re informed).

7. Boost Your Credit

Drivers who increase their credit score by one tier save an average of 17% off their annual premium. (You can see two of your credit scores for free, updated every 14 days, on Credit.com to find out where you stand.)

8. Buy an Older Car

A 5-year-old version of a certain model is nearly 13% less expensive to insure than its current model year version.

9. Provide Your VIN When Getting Quotes 

Most new vehicles come with factory alarms so giving your VIN might help you qualify for an anti-theft device discount.

10. Drive Safely

While this is a good idea for your own well-being and that of others around you, of course, you’ll also save yourself from a potential rate increase.

11. Remember: Not All Car Insurance Companies Are Created Equal

They have unique business models designed to serve certain types of drivers who pose different levels of risk. Make sure to find the right fit for your needs and behaviors.

12. Don’t Stop Looking

It’s a good idea to shop around every six months to see if a new insurance company or policy fits you better and compare car insurance quotes to make sure you’re considering all rating factors and companies applicable to your unique needs.

13. Go Paperless

Agreeing to go paperless and signing your policy documents electronically can lead to discounts with some providers, so consider opting in and providing your email address when buying a new policy.

14. Tout Your Education

Listing your highest level of education can lead to a lower rate because many companies use it as a rating factor and may even offer discounts for college grads. Check the answer to that question on your policy; you could be leaving money on the table.

15. Consider Usage-Based Insurance

If you live close to work and are a safe, low-mileage driver, you may want to consider adding a telematics device in your vehicle to share your driving behavior with your insurance company. Having this device on your car may be able to save you up to 30% on your coverage, based on your driving habits and other regulations.

16. Study Up On Insurance Lingo 

Spend some time researching and reading to help you understand what you’re buying and make sure it actually fits your needs. There is no one-size-fits-all car insurance policy.

17. Make it Automatic

Consider signing up for auto pay or electronic funds transfer (EFT) instead of receiving a bill. Many providers offer a discount for doing this, which can certainly add up over time.

18. Venture Out on Your Own

Have you been listed as a driver on someone else’s policy for at least six months? Most insurance companies will offer a discount on your own separate policy.

19. Share More Than Your Space

Do you share a residence with another driver? Consider combining policies to share the cost of your insurance for more savings.

20. Bump Up Your Deductible

Increasing your deductible from $500 to $1,000 could save you about $150 per year.

21. Budget for Auto Insurance

Always consider auto insurance as a significant portion of the total cost of ownership of your vehicle. In fact, in many cases, insurance can be the largest car-related expense after the car itself, so make sure you factor insurance into your budget and can afford your coverage.

22. Celebrate Your Age

Everyone knows that some birthdays are more monumental than others and it seems like car insurance companies feel the same. We found that drivers can see significantly lower rates after their 19th, 21st, and 25th birthdays, so consider shopping around at those times. It’s also important to note that, on the whole, rates drop each year drivers age until they turn 60 when rates typically level out.

23. Avoid Getting Left Out in the Rain

It’s a good idea to add coverage to your policy at least a week before a large storm hits your area (if you know it’s coming) to help you avoid being stuck paying for the damage yourself. Insurance companies may set binding restrictions that prohibit agents from selling policies for comprehensive and/or collision coverage as a storm nears — though you will still be able to get liability coverage (as it’s required by every state).

24. Be Aware of Local Traffic Laws

Tickets and violations can affect your insurance rate for three years from the date of the ticket. Accidents can affect your rates for up to five years from the date of the accident. In California, DUIs can hurt your rate for up to 10 years from the date of the incident.

25. Factor in More Than Just Price

It isn’t just about how much you’re paying. Getting the right coverage from a reliable insurance company can help keep you from paying big in the event of a collision or other incident.

26. Be Honest & Detailed

Insurance companies will run background checks on your driving record, address and (sometimes) your credit to price your rate, and any guessing could mean your quote and final premium differ substantially.

27. Baby Your Car

Filing an expensive claim not only costs you your deductible, it is one of the most surefire ways to raise your rates for several years to come. If possible, park your car in a garage to help keep it protected from potential damage caused by hail, windblown sand or debris, and other harmful objects. (You can find more ways to save on car insurance here.)

Image: Solovyova

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12 Ultimate Rides for Tailgate Parties

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Photo: Steve Debenport

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12 Cars That Depreciate Quickly (& Are Good to Buy Used)

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If you’re in the market for a new car, you may be tempted to drive a brand-new one off the lot. After all, many manufacturers are already releasing their feature-packed 2017 models, and the weather hasn’t even turned cold yet.

But, before you do, consider this: A new study by iSeeCars.com, an automotive data and research company, found that buying a new car is not always going to get you the best bang for your buck. In fact, the company discovered that purchasing some cars that are just a year old can provide consumers with substantial savings.

“Most people know new cars depreciate the most in the first year and that different cars have different depreciation rates, but we wanted to determine which used cars experienced the largest price drops compared to their new models,” Phong Ly, the CEO of iSeeCars.com, said in a press release.

To establish the savings, iSeeCars.com analyzed the more than 14 million cars sold from August 1, 2015 and July 31, 2016, excluding models with fewer than 250 new and 250 used cars sold. The average asking prices of year-old cars were compared to those of new cars from the same model, according to the release, with the difference in price expressed as a percentage of the new model average price. This percentage was then compared to the overall percentage difference across all models.

Using this data, iSeeCars.com researchers found that the average price difference between a new car and a lightly used car was 21.2%, ranging from $6,099 to $19,966 in savings. (Note: For this study, a lightly used car is defined as a vehicle from the 2014-2015 model years with mileage within 20% of 13,476, the average annual miles traveled in the U.S., according to the Department of Transportation.)

But it isn’t all cars — iSeeCars.com established a dozen cars that offer the best value when purchased lightly used instead of brand new, with price differences between 31.2% and 34.6% — at least 1.5 times more than the overall average. Below are those 12 cars.

1. FIAT 500L

Price Difference: $8,096 less
Percentage Price Difference: -34.6%

2. Lincoln MKS

Price Difference: $16,039 less
Percentage Price Difference: -34.5%

3. Volvo S60

Price Difference: $14,204 less
Percentage Price Difference: -34.4%

4. Kia Cadenza

Price Difference: $12,940 less
Percentage Price Difference: -34.3%

5. Mercedes C250

Price Difference: $15,247 less
Percentage Price Difference: -34.3%

6. Nissan Maxima

Price Difference: $12,469 less
Percentage Price Difference: -34.0%

7. Lincoln MKS + MKZ Hybrid

Price Difference: $14,177 less
Percentage Price Difference: -33.8%

8. Jaguar XF

Price Difference: $19,966 less
Percentage Price Difference: -32.3%

9. FIAT 500

Price Difference: $11,106 less
Percentage Price Difference: -31.9%

10. Cadillac ATS

Price Difference: $6,099 less
Percentage Price Difference: -31.8%

11. Chrysler 300

Price Difference: $13,351 less
Percentage Price: -31.7%

12. Buick Regal

Price Difference: $11,525 less
Percentage Price Difference: -31.2%

If you’re considering purchasing a new car — whether it’s straight from the manufacturer or simply new to you — it’s a good idea to make checking your credit part of your shopping process. Knowing where your credit stands can help you get an idea of what terms and conditions you may qualify for with your auto loan. You can see two of your credit scores for free, updated every 14 days, on Credit.com.

Image: AdrianHancu

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The Average New Car Loan Payment Is $499

new-car-loan-rates

New car loans continue to set all kinds of records — average monthly payments are now essentially $500 — and a long-feared subprime lending bubble has yet to show signs of popping. But suddenly slumping auto sales raise plenty of questions about the overall health of the car sales market.

The car loan market expansion has been remarkable. Total outstanding loans have jumped from $840 billion in 2014 to just over $1 trillion last quarter, according to Experian’s latest State of the Automotive Finance Market report. The average monthly payments on new car loans is now $499, up from $483 last year. And the average new car loan size is up, too — $29,880, up $1,356 from last year’s $28,524.

Car sales have been juiced partly by the continued embrace of buyers with less-than-perfect credit. The fastest-growing segment of buyers are deep-subprime borrowers, who have the lowest credit scores, Experian said. Deep subprime borrower loan volume grew nearly 12%, compared to about 8% among other credit segments. Late payments among subprime borrowers have grown slightly, Experian found. Still, they represent only a tiny fraction of total outstanding loans, lowering the systematic risk to the auto market, Experian said.

“Automotive lenders seem to be keeping cool heads when it comes to how much risk they are willing to take with subprime and deep-subprime customers,” said Melinda Zabritski, senior director of automotive finance for Experian, in a statement. “Yes, subprime and deep-subprime loans are growing, but the entire market is growing from a volume perspective across all risk tiers. In fact, the subprime loans have actually dropped as a percentage of the total market. That, combined with only a slight uptick in delinquencies, makes clear that the sky is not falling.”

The sky might be falling on the auto sales market, however. Record auto sales and the strength of the new car market have been a big success story in the otherwise lackluster economic recovery.

But August turned out to be a bummer of a month for auto makers, with sales falling 4.2%. Lower sales hit all major manufacturers; many started waving the white flag in stories on the bad news, conceding that the years of record-setting sales may be over.

“We had a period of several years coming out of the financial crisis when growth in auto sales outpaced broader economic growth, and that period is over,” Bryan Bezold, Ford’s senior U.S. economist, told Bloomberg News. “We’re no longer in a period where we have a lot of pent-up demand.”

Used Cars Are Popular 

Sluggish new car sales don’t necessarily indicate any additional risk of an auto loan bubble that might burst. It will be tempting for auto lenders to move even deeper into the subprime market to keep up transaction volume, however — particularly as buyers abandon the new car market for other alternatives.

Drivers are clearly returning to the used car market in response to high prices and other factors. The average used vehicle loan reached an all-time high of $19,101 in Q2 2016, up from $18,671 in Q2 2016, Experian said. The average used car loan payment was $364 a month.

In a bit of a surprise, customers with good credit scores are now hustling to the used car market. According to Experian, 43.3% of super-prime consumers selected a used vehicle, which represents a 10% increase over 2015. Among prime consumers, 59.9% chose used, a 6.6% increase over the previous year.

“One of the biggest trends we continue to see is the shift to used vehicles by customers with excellent credit,” Zabritski said. “As vehicle prices continue to rise, savvy consumers are looking for ways to control costs. That appears to be pushing more customers toward used vehicles.”

Overall, used vehicle loans also reached a new peak, accounting for 55.61% of all vehicle loans during Q2 2016.

Used car loan terms are also up, with the average loan term now lasting 63 months (the average new car loan is 68 months). Long-term used car loans are generally a bad idea, as drivers are often upside-down on the car loan throughout its life — meaning it has no value at trade-in. Also, used car loans have far higher interest rates — the average new rate is 4.82% versus 8.97% for used — so the costs of borrowing for five years or longer is much higher.

Drivers are looking for other ways to lower monthly payments, too, as vehicle leasing continues to surge — in both new and used car markets. New car leases jumped from 26.92% last year to 31.44% this year. Even used car leases, while still rare, are growing fast. Last year, they represented 3.26% of all leases; this year, that rose to 3.71%, Experian said.

Remember, having a good credit score can help you spend less on a vehicle since it will generally qualify you for the best interest rates. You can see where your credit currently stands by viewing two of your scores for free each month on Credit.com. And, if you’re credit is looking second-rate, you may be able raise your scores by paying down high credit card balances, limiting credit inquiries and disputing errors on your credit reports.

Image: Xavier Arnau

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The Cities With the Safest Drivers in America

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32,675.

That’s the number of traffic fatalities that occurred in the U.S. in 2014, according to the National Highway Traffic Safety Administration. And it isn’t surprising, not in the least. That’s because the average driver will experience a collision every 10 years, according to Allstate Insurance, and the majority of those accidents (94%) will be preventable.

With stats like these, what’s a good driver to do? Perhaps move to one of the cities that made Allstate’s America’s Best Driver’s Report, released this week.

Between 2013 and 2014, Allstate tabulated the property damage frequency of Allstate insured drivers by comparing the the 200 largest cities from the U.S. Census Bureau.  Suburban areas with less than 100 auto property claims reported between January 2013 and December 2014 were excluded.

To organize its data, Allstate scrutinized various details of customers’ claims, such as the average years between customers’ claims, the number of braking events per 1,000 miles, and its Best Drivers Report Ranking from last year. Some data was culled from AllState’s Drivewise app, which keeps track of a person’s driver behavior and rewards good practices.

Where the Safest Drivers Are 

Brownsville, Texas, topped the list, with an average 14.6 years between claims and the distinction of being the second-top city on Allstate’s Best Drivers Report Ranking in 2015. Here are the other U.S. cities that made the cut:

1. Brownsville, Texas

2. Kansas City, Kansas

3. Madison, Wisconsin

4. Cape Coral, Florida

5. Boise, Idaho

6. Huntsville, Alabama

7. Port St. Lucie, Florida

8. Wichita, Kansas

9. Olathe, Kansas

10. Reno, Nevada

Playing It Safe 

While it helps to live in one of the cities listed above where drivers are clearly more cautious, according to Allstate’s report, it doesn’t hurt to take some steps to play it safer yourself. For starters, you can invest in proper auto insurance, since driving around without coverage is against the law and could ravage your finances if you’re involved in a crash. Your credit plays a key role in determining your rate, so a good place to start would be to see where you stand. (You can view two of your scores, updated each month, for free on Credit.com.)

Also keep in mind the other factors that influence insurance, such as your history of car insurance — or lack thereof — why you drive and even whether you’re married. You can learn more about the factors that go into your insurance rate here.

Image: Sasa Dinic

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The ‘Leftover’ Cars You Can Buy for Less This Year

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Labor Day weekend has long been a big week for car sales, but according to Edmunds.com, you may be able to save really big if you look into leftovers — that is, outgoing 2016 models scheduled to be phased out or redesigned for 2017.

Per the car shopping site, dealers will be looking to get rid of these vehicles at steep discounts (think thousands of dollars) as they try to clear out their lots to make room for shiny, new 2017 models. And you don’t need to feel too behind the times for buying a car that’s last year’s news.

“Even though these vehicles are being redesigned or going away altogether, they still have the same great technology and performance that you’d find in most new cars, but at a much better value,” Ron Montoya, senior consumer advice editor for Edmunds.com, said in a press release. “Bargain hunters are strongly encouraged to consider these vehicles.”

Edmunds identified nine vehicles in particular that are going at a good price relative to their MSRP, based off of the Price Promise deals listed on its site. Note: Some of the discounts are regional, so it’s still a good idea to comparison shop for car deals in your area. And it’s best to avoid buying a car outside of your budget just because you can get a good discount.

With that in mind, here are the five most lucrative leftover vehicles.

1. 2016 Mercedes-Benz E-Class Sedan

Edmunds spotted a number of deals for $7,000 to $10,000 off the soon-to-redesigned luxury sedan’s $71,175 MSRP.

2. 2016 Hyundai Genesis Sedan

Up for rebranding as the Genesis G80, this sedan is going for $3,000 to $5,500 less than its $49,800 MSRP in certain areas.

3. 2016 Buick LaCrosse

Edmunds is seeing deals for as much as $6,200 off the $38,982 MSRP on the entry-level full-size sedan getting a redesign in 2017.

4. 2016 Cadillac SRX

The luxury SUV is going for $8,000 off its $56,380 MSRP, once the incentives are factored in. It’s being replaced by the 2017 Cadillac XT5.

5. 2016 Subaru Impreza Sedan

Scheduled for a 2017 redesign, the 2016 Impreza is going for $900 to $1,100 less than its $22,052 MSRP. But, according to Edmunds, San Franciscans can get the real deal — saving as much as $2,300.

Looking to Buy This Labor Day?

Of course, it can pay to do your research and comparison shop before hitting a dealership, no matter what area you’re in or what car you’re looking to buy. It’s a good idea to think about your monthly payments versus price, so you know exactly what the car is going to cost you over the life of the loan — and you don’t overextend yourself.

Also, it can help to check your credit, since a good score will help you qualify for the best financing opportunities and save you on interest. You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month at Credit.com.

Image: Ridofranz

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