Not all cars are created equal. There can be a very large cost difference between one car and another. If you are trying to buy  a new or used car that won’t break the bank on both the cost of the car and  auto insurance, there are some things you’ll need to consider.

Used or pre-owned cars are obviously the number one choice for those people wanting to save much more money on their total car investment. This is a smart choice because when you buy a brand new car, it loses a lot of value as soon as you drive it off the lot.

You don’t want to buy a very old car though. I consider a very old car, 1o years or older.  If the car is that old, the maintenance may cost you a lot of money. Also, car insurance companies don’t want to insure very old cars.  They are more likely to break down, not perform well, and become dangerous to drive.

You’ll want to look at cars that are only 5 to 8 years old. These have lost their initial new value, keeping the cost down, but are still in good shape. Take a look at the car’s history. A good rule of thumb is the fewer the owners the car has had, the better. You can tell this by the letter designation on the title.  Example A (1st owners) B (2nd owner) Make sure it hasn’t been in any major accidents either. You can order a car fax report which will provide you information regarding the car from Equiax/Clue.  These are the same companies which provide claims information to auto insurance companies when underwriting a new insurance policy.  Although the owner of the damaged car may offer you a better price,  be sure that the car was adequately restored from the accident.

When it comes to insuring a car, a general rule is that more expensive the car is the more expensive it is  to insure. This is because the higher the value of the car, the higher the cost to replace it should it  be stolen or damaged. Even older, less expensive cars are often less expensive to insure than some newer cars.

This is important to keep in mind, because you are trying to save money on the car itself as well as the insurance. It’s a win-win situation; cheaper car equals cheaper car insurance rates.

Another factor in keeping  insurance rates low is where the car is made. Typically a car manufactured in the US are cheaper than others made in another country. The reason for this is the cost of shipping and taxes for both the cars and parts.

Other thing to focus on are cars with four doors rather than two. Four door cars are statistically less likely to get into accidents and speeding tickets than sportier, two door cars. This may be especially important if you are looking for a car for your teenager. Because of the high incidents of teenage driving accidents, you’ll want to get a car that is known for safety. Not only may this help prevent accidents and injury, the car insurance rates will be lower.

The same goes for cars with four-cylinder motors versus those with six or eight. Statistically, the higher-powered cars are more likely to get into accidents.  The four cylinders seem to be viewed as safer, and therefore less expensive to be insured.

Minivans and other “family” cars are also less expensive. This is because auto insurance companies assume people drive much more carefully and cautiously in a vehicle that is transporting children and family.

If you are looking for an affordable car, you probably don’t care much for something flashy, sporty or particularly fast so hopefully these tips have helped you. Remember to invest in a slightly used, four-door, American made car to reduce your purchase and insurance cost.

The last thing to consider is your driving record and the insurance company you choose. Your driving record will certainly be a factor in determining the cost of insuring your car, so consider any tickets or accidents that you have had recently.

If you are insuring a new teen driver, be sure to explain to them the potential cost of traffic tickets. Many new drivers understand they will have to pay a fine, but don’t realize that it can also increase their insurance rates.

Insurance company rates will vary from company to company and state to state. To find a cheap auto insurance company, spend a little time searching online. You can often compare quotes to find a company that will give you the best rates possible.

One common misconception is truly an urban legend.  The color of your car determines your rate.  A red car is the worst color you could buy. The truth is;  “it’s not the truth”. Please feel free to buy any color car toy like.  As an insurance agent for 20 years, I have never once asked the color of a customers car.

– Mike

We all know that it is important (and law-abiding) to have our vehicles insured. Maintaining your auto insurance keeps you legal and makes good financial sense.

What some people don’t know is this. Even if you pay your monthly auto insurance premium, there are circumstances where your auto insurance company will not pay for your claim. Here are some of the reasons why auto insurance carriers would deny your auto insurance claim (and have every right to do so).

Modified Cars

Remember that television show “Pimp my Ride” where drivers were selected to have their cars modified and “tricked out?” As much fun as it can be to modify your car to make it just like you want it, it may not be the smartest move as far as you auto insurance company.

There are a lot of car modifications that can void the warranty on the car. This is a big no-no in the cheap car insurance world. Now adding some fuzzy dice and sheepskin seat covers isn’t going to cause any trouble, but changes to the function of your car like the engine, exhaust, and other major systems can cause your insurance company to deny a claim.

If you have major plans for your car, talk to you cheap car insurance provider first to make sure you will still be covered. In some cases, they may just make a note or may have to raise your rates a bit. In other situations they may drop you all together.

Failure to Pay

This may seem obvious, but many people have found out the hard way that not keeping up payments on your insurance premium can result in dropped coverage. If you know you can’t make your payments, talk to your insurance provider about any discounts or deals that you may be missing out on. At lease give them a head’s up that you can’t pay.

If you do get dropped, find some cheap auto insurance in NJ and try to get coverage back as soon as possible. If you can make semi-annual payments you may be able to get cheaper rates.

Fraud

Insurance fraud sounds like a complicated scheme that you only see in the movies right? It’s more common than you think. A lot of people try to stretch the truth with their insurance companies. They may think it’s a harmless way to save a few bucks, but when they are found out they’ll likely be dropped – and possibly sued.

Insurance fraud can range from very serious charges to simple lying. Both are wrong and not worth the risk.  The most serious would be faking an injury or damage to your car to get money. The lesser would be lying about your annual mileage or important concerns about your vehicle.

Not only can you get in serious trouble for lying or committing fraud, you’ll have a heck of a time finding a new insurance provider.

Driving on a Suspended License

Calling your insurance company might be the last thing on your mind after a DUI or other driving violation, but it should be one of the first things that you do. Insurance companies like to know what’s going on with your driving circumstances. In fact, they require that you keep them informed of things like “I’m not allowed to drive anymore.”

Should you get into an accident or have to file a claim for any reason while driving on a suspended license you may be out of luck getting that paid out. The best advice is to be open and honest about everything pertaining to your car and your driving to your insurance company.

Hopefully you are smarter than to defraud, lie to, cheat or just not pay your insurance company. The immediate and long-term consequences just aren’t worth it.

Remember that even just a little fib about the condition of your car, the mileage, or your driving record could be enough for your insurance to not pay out a claim and drop your coverage. Be smart and always be truthful with your insurance company.

– Mike

7/11/11 UPDATE  We experience a claims denial in the month of June.  A 15 year client whom had a legitimate claim  attempted to make more out of the claim than it originally was. She created more damage on her vehicle than was actually was suffered in the accident.  When the auto insurance carrier discovered the fraudulent act – the claim was immediately denied.   She got off easy, only losing a few hundred dollars. What most people don’t understand, insurance fraud is a legally punishable offence.  Beyond having the claim denied, the insurance carrier can turn you into the police and you will go to jail.  Fortunately; the insurance carrier in question felt the fraud was more a lapse in judgement than a complex plan to defraud the auto insurance carrier.

– Mike

Teenage drivers account for a large amount of accidents on the road. Unfortunately, many result in serious injury. There have been many studies looking into the reasons for high rates of teen car accidents. One is that they are simply new to driving and unprepared for many situations.

Another is that teenagers tend to be easily distracted by friends in the car or other cars nearby, car radios or other things that more experienced drivers have learned to tune out. No matter what the reasons, teenage drivers have a higher likelihood of accidents and it should be taken seriously.

So as a parent, what can you do to prepare your teen for the safe driving? First, start them out with strict guidelines for driving. Most states have a graduated licensing system where teens have to use restricted licenses before they can have a regular driver’s license.

As soon as your teen is old enough for a restricted license you can start teaching them to drive. If you wait too long, they may become nervous and apprehensive. Narrate your own driving with them in the front seat and explain the decisions you make. And follow the rules of the restricted license.

Always know when and where your teen is driving and how many people are in the car. Studies show that the more people in the car with a teen driver, the more distracted they can get. Some parents limit the number of people who can be in their teen driver’s car while they are still in their first year or so of learning.

It can be a nerve-wracking process to help teach your teen to drive, but don’t give up and don’t move too quickly. Make sure that they have adequate time on the road before you let them drive without you, drive far distances or move to their regular license.

Teen driving education usually takes a year or more, which is why you typically see the graduated licensing program. To give your child a well-rounded education when you are teaching them, put them in different driving situations and circumstances.

At first, you’ll probably want to start in a large parking lot just so they get the hang of it. But as they progress, make sure they spend time on the highway, in new areas that they haven’t driven before, in conditions such as snow and rain, early morning with the sun glare, etc.

By exposing them to the most diverse driving situations you can, you are better preparing them. Don’t send your teen to test for their license if they have only driven the same route to school and work for a year. Your teen has a better chance of passing their driving test and being a more prepared driver if they have driven more than just their own neighborhood.

There is a lot you can do to best prepare your teen driver to go out into the world with their license. Unfortunately, there isn’t a lot you can do about the cost of licensing them. It can be very costly to insure teen drivers because of their high risk of accidents.

Whether you as parents are paying for the insurance or your teen is paying it, you’ll want to do everything you can to keep the cost down.

Many car insurance companies have made efforts to help teens drive safer. Some companies that offer incentive programs for continued driving education, good driving records and for keeping grades up. Statistics have shown that good students with advanced driving education often have fewer accidents.

As a parent, you may want to look and see of your car insurance company offers incentives like these. Not only can you save money on the car insurance, you can feel more confident that your teen driver has taken more steps that may cut their chances of getting into an accident.

Even with these kinds of discounts your teen’s insurance will likely continue to be costly until they reach their twenties. To save costs, you can compare auto insurance quotes online to find the best rates. It may be less expensive than adding them onto your existing policy.

Once your teen is insured, tell them how important it is to keep their driving record clean. Obviously the number one reason to obey traffic laws is to be safe on the road. They should understand this by now. But carelessness while driving can also lead to tickets and increased insurance rates on already costly premiums.

Remind your teen to use their turn signal, pay extra attention to their speed in school zones and work zones, remember to check their head lights, tail lights and signal lights. Anything that could cost them a ticket or compromise their safety should be taken seriously.

– Mike

7/12/11  UPDATE

Texting is one of  a number of distractions our teens are creating for themselves while driving.  Traffic accidents are the #1 cause of death for our teens.   A  2010 study of teen driving behaviors released by the American Automobile Association and Seventeen magazine revealed some upsetting facts. Sixty percent have talked on a cell phone and 28 percent have sent a text message while driving. Teen drivers who have done texting while driving send on average twenty-three text messages while driving in a 30 day period. More than 1/3 of teens drivers  think they have been almost involved in an accident because of their texting.  Even with this knowledge, they are reluctant to stop texting behind the wheel.