Beating Broke

Personal Finance from the Broke Perspective

5 Ways Maintaining Your Car Saves You Money

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Maintaining your car is one of the easiest ways to save money for those that are strapped for cash. While you might think car maintenance is an unnecessary expense, this couldn’t be farther from the truth. Below are some of the best ways maintaining your car can help you save money in the long run.

1. Avoid Costly Medical Expenses

There were more than 138,000 car crash injuries due to hit-and-run drivers last year. Sadly, you can’t prevent accidents from other drivers. However, you can take measures to keep yourself as safe as possible while driving.

Wearing a seatbelt is one of the most effective ways to reduce injuries and fatalities in car accidents. In addition, maintaining your car to keep it in good working order can help you avoid accidents caused by mechanical failures.

You should also take care to drive defensively and be aware of your surroundings at all times. By taking these precautions, you can minimize your risk of getting into an accident.

2. Avoid At-Fault Accidents

If your brake pads are less than 1/4 inch thick, it’s a sign that your brake pads need to be replaced. Unfortunately, many people wait until their brake pads are completely worn out before they replace them.

This is a bad idea for several reasons. First, driving with worn-out brake pads is dangerous. Second, if you get into an accident while your brake pads are in poor condition, you may be held liable. Third, replacing your brake pads regularly can save you money in the long run. This is because you’ll avoid costly repairs that may be needed if you wait until your brake pads are completely worn out.

3. Prevent Engine Failure

You might not think that something as simple as an oil change can save you money, but it can. Getting regular oil changes is one of the best ways to ensure your car remains durable and ready for the road. In the U.S., 4 out of 5 auto repairs performed on cars are related to the vehicle’s durability. Because of this, it’s crucial to maintain your car to extend its lifespan. One of the best ways to do this is by getting regular oil changes.

While you might be tempted to put off getting an oil change, doing so can actually end up costing you more money in the long run. This is because not changing your oil regularly can lead to engine damage, which is expensive to repair. In addition, getting regular oil changes can help you avoid other costly repairs. This is because oil changes can help prevent buildup in your engine, which can lead to clogs and other problems.

4. Help Prevent Flat Tires

Flat tires are a nuisance, and they can be expensive to fix. Fortunately, there are several things you can do to help prevent flat tires. One of the best things you can do is to check your tire pressure regularly. You should also have your tires rotated every 5,000 miles. This helps ensure that your tires wear evenly, which can help prevent flats.

You should also inspect your tires regularly for signs of damage. If you see any cracks or punctures, it’s important to get them repaired as soon as possible. Ignoring damage to your tires can lead to flats and blowouts, which are both dangerous and expensive to fix.

5. Avoid Expensive Towing Fees

If your car breaks down, you may have to pay for a tow truck to take it to a mechanical garage. Towing fees can be expensive, and they vary depending on the distance you need to be towed.

Another way to avoid expensive towing fees is to have your car serviced regularly. This helps ensure that any potential problems are caught early before they become serious enough to require a tow.

Use these tips to save money by maintaining your car. Taking care of your car can help you avoid expensive repairs, and it can also keep you safe on the road.

Why Is Electric Vehicle Insurance So Expensive?

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Because of their increasing popularity and lower entry price, more and more people are opting to buy electric vehicles. Even though electric cars are becoming increasingly cost-effective, they remain more expensive to insure than their gasoline or diesel-powered counterparts. However, it seems strange that insurance costs are higher for electric automobiles than for gas-powered ones. 

Keep reading to learn why electric vehicles have such high insurance costs. Because they produce no exhaust, electric vehicles dramatically lessen urban air pollution. They are called “zero-emission vehicles” (ZEVs) because their motors don’t release harmful gases or exhaust into the atmosphere.

Do electric cars require a higher insurance premium?

Since they produce significantly less pollution, electric vehicles (EVs) are acceptable for the environment and economical to operate. More excellent value is provided in comparison to more traditional models. Nevertheless, insurance costs for such vehicles are typically higher than for gasoline or diesel vehicles. This is due to the greater initial investment, higher risk of damage, and greater expense of repairing EVs.

As technological advancements help automakers lower the price of electric vehicles, the cost to maintain them also decreases. Insurance premiums will go down as the cost of repairs and overall ownership goes down.

In addition, cutting-edge insurance firms are creating budget-friendly policies for electric vehicles. This is made possible by advanced digital infrastructure and the no-agent, no-commission model. In light of the low overhead associated with electric cars, a number of insurance providers have developed competitively priced policies for these vehicles.

Costly premiums 

Car insurance rates in California for EVs fluctuate based on several factors. These variables heavily influence the cost of insuring an electric vehicle. The following are the most critical factors contributing to EVs’ higher insurance costs.

The cost of electric vehicles is higher

Compared to gas- or diesel-powered cars, the price of an electric vehicle (EV) is significantly higher, contributing to the higher insurance premiums associated with EVs. Electric vehicles (EVs), including high-capacity batteries and sophisticated auto components, feature state-of-the-art hardware. Consequently, the IDV and premium go up in tandem with the price of a car.

Costly components for electric vehicles

Even though there are fewer parts in an electric vehicle than gasoline or diesel-powered cars, the lithium-ion battery is still the most expensive. They account for over 50% of the final sticker price. Batteries are expensive to repair or replace, contributing to higher insurance premiums.

Manufacturers of automobiles are working to lower the price of these batteries. With the price of batteries going down, insurance rates should go down, too.

It’s common to practice replacing the battery in an electric vehicle

All batteries, including those used in EVs, have a limited time before they begin to degrade in performance or stop functioning after use. Batteries may need to be replaced periodically. Replacement costs are higher due to the high price of lithium-ion batteries, which is reflected in the insurance cost. Battery replacement intervals can be shortened to save money and reduce premiums.

Mechanics for electric vehicles are becoming scarcer

Higher maintenance costs for electric vehicles can be attributed to the greater complexity and higher initial cost of its components. Mechanics who work on electric vehicles must have specialized training. The number of qualified individuals is currently lower than that of traditional auto mechanics. Due to the high cost of hiring a specialized mechanic, the labor cost associated with the repair or replacement may be higher.

Exactly what details should an EV owner give to their insurance company?

When it comes to insurance, battery-powered vehicles are treated the same as their gasoline and diesel-powered equivalents. The latter is the actual cash value of the vehicle, while the former is the Insured Declared Value (IDV). You can get instant cover for your EV by providing basic information about the car and the status of its current car insurance policy if any. Our online service (website/mobile app) makes this a reality.

Make and model of car: Vehicle make and model is a significant factor in determining insurance costs. When calculating the IDV, the vehicle’s fair market value plays an important role.

Location: Location is essential, with some areas being more dangerous than others. Therefore, the premium will be slightly greater in high-risk locations than in low-risk ones.

Year of manufacture: To better understand the depreciation value of the EV, the insurer needs to know the year of manufacture when calculating the IDV.

Contact number: The insurance company will need your contact number for various reasons, including sending One-Time Passwords (OTPs), providing status updates, sending reminders for payments and other administrative tasks, and communicating with you regarding claims and other important dates.

Usage of the vehicle: For your insurance company to provide an accurate quote, they need to know how often you will drive the vehicle and for what purposes.

 

Conclusion

More and more people want to buy electric cars, therefore several companies have started making them. People are starting to buy these cars because of their low impact on the planet. The price of these hybrid vehicles will inevitably decrease as demand increases, which will lead to lower insurance premiums in the future.

 

 

 

How We Used the Proceeds from the Sale of Our House

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We Used the Proceeds from the Sale of Our House

This summer has been a crazy one. We found out in May that my husband would likely get a new job 2,200 miles away from our home, and in June, he signed the contract for the new position. We sold our house, bought a new house, and drove four days across the country to settle in our new area. Thanks to the housing shortage due to the pandemic, we made a nice profit on our old home. Here’s how we used the proceeds from the sale of our house.

About Our Old House

Our old house had almost doubled in value from when we bought it eight years ago. When we listed it, the house sold in three days, and we had six offers, two of them for over asking. The couple we picked also waived their right to an inspection, which saved us money.

About Our New House

Our new house is slightly larger than our old house and cost 8% more than our old house sold for. Unfortunately, the property taxes are three times higher. (Yes, property taxes in Arizona, where we moved from, are affordable.)

We wanted to find a smaller house that cost less than our house in Arizona. However, we only had a week to look for a home in our new area. Unfortunately, many of the places on the market were less than desirable, with moldy tubs and awkward layouts. Or, a few were in highly desirable areas and went well over asking; we had no desire to pay that much.

How We Used the Proceeds from the Sale of Our House

I would have liked to have put all of the proceeds from our house into our new home so we would have a smaller monthly payment, which is especially important in this high-interest rate environment. However, both our financial planner and mortgage broker talked us out of this.

Instead, we used the proceeds from the sale of our house this way:

Seventy percent for a 20% down payment on our new house and to cover closing costs.

We Used the Proceeds from the Sale of Our House

Six percent to increase our emergency fund. This allowed us to grow our emergency fund from one month of expenses to 2.5 months.

Four and a half percent for home improvements. While we didn’t pay over asking for this house, we did pay the list price. The house has some issues like mold on the wood window in one of our kids’ bedrooms, which we will need to replace before winter comes. We also need to replace a leaky, cracked sink and a few other items.

Six percent to increase our car replacement fund. We’ll need a new car within the next year or two. (Our current vehicle is 18 years old.) So, we added to this fund.

Two and a half percent to cover moving costs. We had to pay for our hotel rooms and food as we journeyed across the country, as well as other miscellaneous expenses.

The rest is unassigned for now. We’ll see how we need to use the remaining money, whether for college tuition, increasing the emergency fund further, or buying other household needs like a snowblower.

Final Thoughts

We tried to use the proceeds from the sale of our house as responsibly as possible. As a result, we were able to put 20% down on our new house, and we were able to bulk up many budget categories that put us in a more secure financial position.

Read More

3 Lessons I Learned When Looking for a New House

Should You Create Sinking Funds Before You’re Debt Free?

When the More Expensive Option Is the Frugal Choice