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 Posted: Mon Jan 26, 2009 8:13 pm Post subject: At what point should you |
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| At what point should you drop everything but liability on your car. |
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MikeCallahan
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| Posted: Mon Jan 26, 2009 10:42 pm Post subject: |
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My opinion...just based on math...would be when the premiums exceed about 1/3 of the value of the car.
I'd have a hard time justifying paying $1,000 per year ($83.34 per month more) for full coverage on an auto that at best is worth only $3,000.
We've all been in accidents, but I think most people would agree going three years without having an accident the probability is in your favor.
I'm speaking strictly as a consumer here.
The continued premium payment also represents diminishing returns even IF the auto maintained a perfect $3,000 value, go one year without an accident and you're only netting $2,000, go two years and you're only netting $1,000 and obviously by 3 years and thereafter you're throwing dollars away.
My:
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GarySpicuzza
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| Posted: Mon Jan 26, 2009 11:32 pm Post subject: |
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At the point that you feel financially secure that you can address the loss/damage to the vehicle should it be involved in a loss.
As the vehicle gets older, the value of the vehicle drops. This is why the age of the vehicle applies to the above. |
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tcope
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| Posted: Tue Jan 27, 2009 1:46 am Post subject: |
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When you can afford to (out of your own pocket) replace the vehicle.
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Lori
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| Posted: Tue Jan 27, 2009 4:53 am Post subject: |
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When your car is sufficiently old and may not worth much.
When you have repaid the loan on it or is about to complete paying in one or two more installments.
And, as the above posters have mentioned, when you can afford replacing the car out-of-pocket.
You can drop the coverage on the car.
Thanks,
Rupert |
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RupertWBradson
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| Posted: Tue Jan 27, 2009 9:00 am Post subject: |
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| Every year, I conduct an informal valuation on my wife's car to see if it makes sense to carry "full coverage", by looking up like kind quality vehicles in my area. I figure that I will keep the "full coverage" until the value of the vehicle is less then her yearly premium. |
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Dasfuk
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| Posted: Tue Jan 27, 2009 11:05 am Post subject: |
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I'd like to throw another penny on this thread because new automobiles are the worst, most money wasteful purchases in the USA.
A $30,000 dollar car financed at 10% for 60 months costs the owner $40,920 dollars for that car. Regardless of make or model (normal cars) that are 5 years old sell for $5,000 to $8,000 dollars.
Yet.... Americans do this all the time.
Nobody would sit down with a financial advisor and "THE deal is"..... deposit $682 per month for 60 months into this great brand new financial instrument investment thingy and after you've paid $40,920 dollars your investment thingy will be worth $5,000 to $8,000 AT BEST 5 years from now!
Americans are broke because they want to be. They suffer from, "What's my monthly payment disease?" AND they're not very good with multiplication!
Before the hate mail starts...I'm not saying never buy or finance a new car, they're fun, just understand the financial costs associated with that new car smell.
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Gary Spicuzza, *SAFE
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GarySpicuzza
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| Posted: Tue Jan 27, 2009 12:05 pm Post subject: |
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Dasfuk, great that you keep an eye on this yearly....my 2002 beater is (that i purchased new...for 48 months zero interest, only because i felt i HAD to, different story) paid for, and only worth about $4800.00 BUT because we are old, have everything ins. with one company (and i carry higher than state limits) the collision and comp cost us like 20 bucks a month...so I'll likely keep that on it till it either goes up in cost (premium) or value hits about 2k or so...you really have to do the math to see just how much you are paying premium wise, for the coll/comp... | Quote: | Americans are broke because they want to be. They suffer from, "What's my monthly payment disease?" AND they're not very good with multiplication!
Before the hate mail starts...I'm not saying never buy or finance a new car, they're fun, just understand the financial costs associated with that new car smell. |
I couldn't agree more with this, it makes me cringe when I hear young couple openly tell a carsales man, 'we figure we can afford 500 dollars a month''' holy moly before they leave that lot they will have a 30k vehicle financed for seven or eight years!!! In fact a friend that works at a dealership said the 'norm' is seven years on a new car note! i had no idea this was even possible!
If you are in the market for a 'new' car it is almost ALWAYS better to find a nice 1-2-3 year old vehicle with low miles that will satisfy you....
Rupert.. | Quote: | | When you have repaid the loan on it or is about to complete paying in one or two more installments |
it has to be COMPLETELY paid off one or two payments left likely won't get the lein holder to allow you to drop coll/comp and if they get wind of it (and they do from the ins carrier) they will slap that huge premium on the loan for ''their'' collision and comprehensive coverage...just something to be aware of.
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"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr. |
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Lori
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