Starting a home vegetable garden comes with many benefits – including saving you money. See this step-by-step guide on how to plant your garden this season.
Source: moneycrashers.com
How to Start a Home Vegetable Garden – Everything You Need
4 Questions to Ask Before Choosing a Checking Account
You’ve probably had a checking account for most of your life and never gave it much thought. It’s just there to store your everyday cash, right? Not necessarily.
If you’re considering questions about checking accounts as you take a closer look at your current setup and explore opening a new one, it’s important to note that checking accounts are designed with different and unique features. Some may even be more beneficial to you than you realize.
For starters, most checking accounts offer a host of conveniences, providing customers the ability to set up automatic payments for routine bills, schedule electronic transfers and make all deposits and transfers via a smartphone app. Some accounts even allow you to earn cash back on your debit card purchases.
âA checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out,” says Jeff Kreisler, money expert and author of the personal finance book “Dollars and Sense.”
At this point, you might be thinking, “What questions should I ask before opening a checking account?” To help you decide which account is right for you, here are four key questions to ask yourself:
1. What types of checking accounts should I consider?
Before you open a new checking account, do a little homework to learn about the different types of checking accounts offered by banks, Kreisler says. There’s the standard personal checking account that allows you to write checks and make payments with your debit card or electronically. But when thinking about questions to ask when opening a checking account, go beyond the basic features to find an account that best fits your lifestyle and financial goals. Here are some examples:
- Online checking account: Ready to bypass the teller lines with the benefits of an online bank? Then this is the checking account for you. Doing your banking from any computer or mobile device is sweetâand since online banks don’t have brick-and-mortar locations, they can often pass their savings from overhead down to you. Just verify that the online bank or credit union supplying the checking account is backed by the FDIC or the National Credit Union Administration.
- Rewards checking account: One question to ask before choosing a checking account is if you can earn rewards or incentives for certain activity. Discover Cashback Debit, for example, lets you earn 1% cash back on up to $3,000 in debit card purchases each month.1 That means your monthly cashback earnings could yield $360 in total rewards each year (finally, dinner and drinks at that new French bistro in town!). Some banks may also offer a checking account bonus just for opening a new account, while others have a variety of reward options based on certain qualifying purchases. A rewards checking account works for almost anyone looking to maximize their debit spend or a balance they regularly hold in their checking account.
Say hello to
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No monthly fees.
No balance requirements.
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- Joint checking account: Most checking accounts can be opened as a joint checking account, which is an account held by two or more people. This can be a convenient solution for couples, minors and their parents and even seniors and their caregivers who are trying to manage a household budget. It does require good record keeping and communication, so make sure you understand the ins and outs of joint accounts before choosing this option.
The above checking accounts are the most standard and usually have appealing benefits. But if you have more questions about checking accounts, there are options that can cater to more specific needs. However, they often have less flexibility. For instance:
- Interest-bearing checking accounts are available for those who want to earn some money while their cash is parked in the account. The rate of return is usually low and minimum balance requirements high.
- Student checking accounts are often low-cost, but they could come with limitations. Whether or not a student account is available may be a good question to ask before choosing a checking account if you’re looking for a starter account for yourself or your child.
- Second-chance checking accounts could be a fit for those who may not be able to get a standard checking account due to their banking or credit history; however, they often have higher fees.
.block-quote_5back background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/5back-730×500.jpg); @media (min-width: 730px) .block-quote_5back background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/5back-1600×600.jpg);
“A checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out.”
2. Are there fees associated with the checking account?
This is one of the most commonly asked questions about checking accounts. Before choosing a checking account, be sure to research its fees, says Marc Bernstein, financial planner and strategist for MWealth Advisors. Types of fees and fee amounts can vary greatly from bank to bank, and even among accounts at the same bank.
A question to ask when opening a checking account is if the account charges fees for ATM use, automatic bill pay, monthly maintenance, ordering checks, replacing a debit card or ordering official bank checks. Banks may charge any combination of these feesâor none. Discover Cashback Debit comes with no fees. Period.2 That means you won’t be charged a fee for any of these services.
Along with including the fee topic on your list of questions to ask before choosing a checking account, you should also consider obtaining “a document outlining the fees you’ll be paying, in case you have any questions, and check the fine print,” Bernstein says. You can also typically find a list of fees (if any) on the bank’s website or in the account agreement.
3. Is there a minimum balance requirement?
According to Bernstein, among the questions to ask when opening a checking account is if it requires an initial minimum balance to open. You’ll also want to know if a minimum balance needs to be maintained to avoid a fee.
Bernstein suggests looking for an account with no minimum balance requirement if you tend to keep less than $1,000 in your account or like to have flexibility when making large withdrawals.
If you’ve asked this question about checking accounts and are still comparing accounts that have a minimum balance requirement, realistically determine how much you can keep in your account per month and what you will be charged if you can’t keep that balance.
Even if your account falls below a minimum requirement, there could be a way to save on fees. If you have multiple accounts at one bank, the bank may allow you to combine the balances to waive checking fees.
.block-quote_1back background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/1back-730×500.jpg); @media (min-width: 730px) .block-quote_1back background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/1back-1600×600.jpg);
The total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.
4. What ATM fees could I incur?
If you frequent the ATM to take out cash, a good question to ask before choosing a checking account is: Where are the bank’s ATMs located in relation to your home and work?
Availability of ATMs is an important question to ask when opening a checking account that can really affect your wallet. For instance, if you decide to withdraw money from an ATM that’s not in your bank’s network, you can get hit with two separate charges: a surcharge from the ATM owner (since you’re not a customer) and a fee from your own bank.
And those fees can really add up. According to Bankrate’s 2018 checking account and ATM fee study, the total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.
.post__breaker–7862 background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/07/4-Questions-to-Ask-Before-Choosing-a-Checking-Account_05_FULL-BLEED-450×200.jpg);@media (min-width: 450px) .post__breaker–7862 background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/07/4-Questions-to-Ask-Before-Choosing-a-Checking-Account_05_FULL-BLEED-730×215.jpg); @media (min-width: 730px) .post__breaker–7862 background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/07/4-Questions-to-Ask-Before-Choosing-a-Checking-Account_05_FULL-BLEED-992×400.jpg); @media (min-width: 992px) .post__breaker–7862 background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/07/4-Questions-to-Ask-Before-Choosing-a-Checking-Account_05_FULL-BLEED-1200×400.jpg); @media (min-width: 1200px) .post__breaker–7862 background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/07/4-Questions-to-Ask-Before-Choosing-a-Checking-Account_05_FULL-BLEED-1600×400.jpg);
One way to get cash without paying an ATM fee is to use your own bank’s ATMs. The more ATM locations that your bank offers that are conveniently located, the less likely you are to use one that’s out-of-network and rack up unnecessary charges. If you can’t always use your own bank’s ATM, one of the questions to ask when opening a checking account is whether your bank allows you to use a broader ATM network for no-fee transactions.
Find the best checking account for you
Opening a new checking account is an important step toward establishing, or rebuilding, your financial foundation.
Now that you can ask the right questions about checking accounts, you’re one step closer to choosing an account that fits your individual needs. And that feels like money in the bank.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal
, which also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
2 Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.
The post 4 Questions to Ask Before Choosing a Checking Account appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
9 Best Prepaid Debit Cards for 2021 (Plus 1 Alternative)
Looking for the best prepaid debit card of ? These 9 banks offer the best deals with the most features and benefits.
Source: crediful.com
What Is “Accessible Income” on a Credit Card Application?
If you’re applying for a credit card, you might stumble upon this term “accessible income.” In fact, that’s the only situation in which you will come across the term: on a credit card application. So, you need to know what it is.
Accessible income is not just income you earn from your regular job. Rather, it includes much more than that. It includes income from a wide variety of sources, like retirement savings accounts, social security payments, trust funds, just to name a few.
Accessible income can work in your favor because not only you can list income from your job, but also all types of other money you receive in a given year. This in turn will increase your chance of getting approved for the credit card, simply because you can list a higher income.
It also can get you approved for a higher credit limit, which in turn can help your credit score and allow you more spending freedom. In this article, I will explain what accessible income is and the types of income you need to include in your credit card application. Before you start applying for too many credit cards, consult with a financial advisor who can help you develop a plan.
What is accessible income?
Accessible income means all of the money that you have accessed to if you are 21 years old or older. According to the Credit Card Accountability Responsibility and Disclosure Act, lenders are required to offer you credit if you are able to pay your bill. If you do not make enough money and do not receive enough income from other sources and cannot make payments, they can reject your application. That is why they ask for your accessible income.
If you are between the age of 18 and 20, your accessible income is limited to income for your job, scholarships, grants and money from your parents or other people.
However, if you are 21 and older, your accessible income involves way more than that. It includes income from the following sources:
- Income paychecks
- Tips
- Bank checking accounts
- Savings accounts
- Income of a spouse
- Grants, scholarships, and other forms of financial aid
- Investments income
- Retirement funds
- Trust funds
- Passive income
- Checks from child support and spousal maintenance
- Allowances from your parents or grandparents
- Social security payments or SSI Disability payments
To report that accessible income, just add them all up to arrive at a total and submit it. The credit card companies will not ask you to provide the specific source of each income
What does not count as accessible income
Loans including personal loans, mortgage, auto loans do not count as accessible income simply because they are borrowed money. So, do not list them when submitting your credit card application.
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Accessible income on the credit card application
Accessible income is only associated with credit card applications. In other words, you’re only asked that when you’re applying for credit cards. When applying for a credit card, you should take advantage of all sources of income and not just the income from your job.
So, you should make sure to gather all of the money you have accessed to that year. Not doing so means that you’re leaving other income that is just as important. As mentioned above, you should not include loans or any borrowed money.
When reporting your accessible income, be as accurate and truthful as possible. While some credit card companies may take your word for it, others may ask you to verify your income. In that case, you will need to provide hard proof like pay stubs, bank statements, statement from your investments accounts, etc…
Why providing accessible income important?
Your credit score is the most important factor credit card companies rely on to decide whether to offer you a credit card. However, your income is also important. The higher your income, the better.
A high income means that you’re able to cover debt that you may accumulate on your credit card. And the higher your chance is that they will approve you. The opposite is true. If you have a low income, some credit card companies may not approve you even if you have a good credit score. So, in order to increase your chance, you should take advantage of accessible income.
The bottom line
The only situation where you will find “accessible income” is on a credit card application. Accessible income is all income you have access to in any given year. That includes much more than your paychecks from your regular jobs.
But it also includes all types of money including checks from child support or alimony, allowances from your parents or grandparents, money in your retirement and investment accounts, etc. So, you should take advantage of it when applying for a credit card.
Speak with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post What Is “Accessible Income” on a Credit Card Application? appeared first on GrowthRapidly.
Source: growthrapidly.com
Discover Bank CD Rates – The Simple Dollar
Discover CD rates are some of the highest at any bank and come with plenty of flexible term options and high rates regardless of your investment size.
Source: thesimpledollar.com
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Source: wisebread.com
How to Make a Side Income Running a Vending Machine Business
While owning vending machines does not require any special skills, it is a business.
One of the first steps in starting a vending machine business is finding your niche and deciding what to sell. That takes a bit of research and knowing who your customer is.
To put yourself in the best position to be profitable means finding the right location.
As we continue to make our way through COVID-19, many people are still looking for ways to get items they need without physical contact with another person.
The Vending Machine Business During COVID-19
The startup costs are relatively low, sometimes around ,000. The work is flexible and often doesnât require much day-to-day involvement. The risk is comparatively low and there is growth potential.
âThen you only work probably three days a month, basically on the whole gig,â said Ausmus. âThree four days a month can make somebody a good little extra income.â
Different types of machines have different capabilities. Some take only cash while others will process credit or debit cards. Some models have touch screens or voice capabilities.
- Manufacturing areas
- Offices
- Retail spaces
- Hotels/motels
- Schools
- Hospitals and nursing homes
- Universities/colleges
- Correctional facilities
- Military bases
- Restaurants, bars and clubs
âIf (your machine location has) a big break room and a lot of employees, you would have to be there once a day to fill your machines up because thatâs how busy they are,â Ausmus said. Other machines like toys and candy donât require as much restocking.
Think about where people need to wait. While waiting, they may get hungry or thirsty. Ausmusâ novelty machines need kids around.
Revenue for the vending machine industry was .2 billion in 2019, up 3% from the year before.
Many factors make owning a vending machine an attractive business venture.
Some machines have:
That data came from the Automatic Merchandiserâs Annual State of the Industry Survey â before the full impact of COVID-19 hit.
Owning and operating vending machines is big business, providing passive income without any specialized skills. Itâs also called automatic merchandising.
âWeâre in a tough, tough industry right now with COVID-19. A lot of stores donât want the machines there, they donât want the kids congregating, they donât want people touching them,â said Scott Ausmus, director of manufacturing for National Entertainment Network, Inc. and president of the National Bulk Vendors Association.
Source: thepennyhoarder.com
Starting a Vending Machine Business
When looking for locations, be prepared to approach the owner or landlord with a business plan for the machine.
The more perishable the product and the busier the area, the more of your time the machine will take.
There are also machines for bulk vending like gumballs, stickers, toys, novelties and more. During COVID-19, machines popped up selling masks and hand sanitizer.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
There is the cost of the machine, the cost of inventory, personnel to keep it stocked, maintenance and more.
Cold beverages were the top-selling product category. A majority of vending machines involve food and beverage products including sodas, coffee, snacks and candy.
âYou gotta buy the right product. If you buy the wrong product, it wonât move and you wonât make any money and you certainly donât want to throw [product] away,â Ausmus said. âYouâve got to have the variety for people and find out which ones they want and thatâs what you restock with, what sells.â
Location, Location, Location
At places like airports, vending machines often sell tech accessories and travel essentials like neck pillows, blankets and eye masks. Laundry rooms in residential buildings often have machines with detergent and fabric softener.
Basically, all you need to get started is some startup money to buy a machine, a good location and the right products.
âItâs really not a bad risk to put it in a location and find out that itâs not making enough money. ⦠You can remove it and move it to the next one until you find that right location,â Ausmus said.
Automatic merchandising isnât for everyone, but owning and operating a vending machine can be a good business. Being able to retrieve the money you make and restock your machines easily is the key.
With many offices, businesses and other public spaces closed or restricted due to the coronavirus pandemic, the vending industry is certainly taking a hit.
You will need inventory and someone to keep the machine stocked and maintained. This may require a van or truck.
Location can be about trial and error.
Then you will need an actual vending machine. There are several types, and prices vary depending on what is in the machine, whether it needs refrigeration or heating, and the interactivity.
- Pay a percentage of sales or other fee for having your machine in their location.
- Pay for the electricity the machine uses.
- Ensure the security of the machine. There is money inside a machine as well as inventory. Theft and vandalism are always possible.
- Research state and local laws and regulations.
- Pay sales tax on the revenue the machine generates.
Key Purchase: Your Vending Machine
âOne of the hardest things to do is to locate a location,â he said.
âMake sure that you have your phone number on the machine, and that the store location knows your phone number,â said Ausmus. âIf somebody didnât get what they wanted, make sure the store can give them a refund and you pay the refund back to that store. Then get out there as soon as you can to fix the machine so that you can continue to make money.â
Places with lots of foot traffic are good. Before COVID-19, that meant schools and universities, malls, office parks, etc.
Also be prepared to:
- Remote monitoring software: This helps keep track of how the machine is working and notifies the operator if something is wrong.
- Low stock alerts: Notify the operator when items needs replacing.
- Vending management systems (VMS): Tracks sales and other data to help owners make better business decisions.
Running a Vending Machine Business
Vending machines serve that purpose â and make money for the machineâs owner.
Vending machine businesses are scalable, meaning itâs possible to start small and expand. You donât have to wait for payments because customers pay when they purchase an item.
Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.
Perishables need to be stocked more often than other items. Learning some basic maintenance skills could keep you from having to hire someone if there is a problem with the machine.
Machines range from about ,500 for a used or refurbished machine to several thousands for a new, high-end machine with many technical features.
There were 2,175,756 vending machines in service in 2019 in a variety of locations including:
While the startup costs are low and the income is often passive, owning vending machines is not without risk. You must be able to understand your own financial situation and how much you can afford to invest.
He grew up in the vending business. The machines he sells and operates are the novelty kind, offering things like stuffed animals, toys and gumballs. Many are in restaurants and entertainment venues like bowling centers.
Buying directly from a manufacturer or supplier is one option, as is purchasing on a secondary market. Some companies also rent machines. Ausmus cautioned to make sure there are spare parts and support available for what you buy.
âThereâs a higher profit in the gumball then there is anything else,â Ausmus said. âThe cost of goods is low on the gumballs and everybody likes gum, so everybody still purchases a gumball and so that is a winner for a lot of people.â
2020 Financial Crisis Auto Loan Relief
Car manufacturers have been feeling the strain during the financial crisis. There are fewer cars on the road, workers in the factories, and consumers willing to spend, and as a result, the automobile industry has been devastated.
But manufacturers and showrooms are fighting back, finding ways to encourage consumers to buy and to make life easier for the ones that already have. In this guide, weâll look at the ways that auto lenders are helping consumers hit by the crisis and the ways that manufacturers are encouraging more drivers to purchase.
Financial Crisis Auto Relief: Manufacturers
Automobile manufacturers saw their profits free-fall in March 2020 and that followed into April, with suggestions that the chaos will progress as the year (and the pandemic that has gripped it so fiercely) continues. They are struggling and their customers are struggling as well.
Over 700,000 Americans lost their job in March and unemployment is set to rise to levels that havenât been seen for years. To make matters work, the countryâs 9.5 million+ self-employed workers have seen their incomes half.Â
As a result, many are struggling with their debts and finding it harder to meet auto loan payments. To lend a helping hand, many of the worldâs biggest manufacturers have established auto loan relief programs:
Ford
Ford announced its response to the crisis towards the end of March. Known as the Built to Lend a Hand program, it offers up to 6 months payments on a brand-new Ford and applies to all models from 2019 and 2020.
As soon as consumers sign up, they will be given 3 months of payments from Ford, while an additional 3 months can be deferred as per the customerâs request. The customer can choose to defer these payments as and when they want, but they must get their auto loan through the Ford Credit program to apply.
Hyundai
South Korean manufacturer, Hyundai, was one of the first to offer an auto loan relief program. South Korea was one of the hardest-hit countries in the early stages of the virus and this led to the major automobile brand offering a relief program in the middle of March.
Known as the Assurance Job Loss Protection, this program first appeared following the 2008 recession and has been revived for the recent pandemic.Â
As part of this auto loan relief program, consumers who bought or borrowed a car after March 14 can have up to 6 payments made by Hyundai. They can also request payment deferment that lasts for up to 90 days.
The Assurance Job Loss Protection program is set to run until April 30 and applies to everyone who purchases a Hyundai through eligible finance programs. It also extends to Genesis, the luxury division of Hyundai Motors that is responsible for new vehicles such as the 2020 Genesis G90.
If the pandemic continues to grow in scale and severity, the program may be prolonged, although only time will tell.
Nissan
Nissan is following in the footsteps of many major creditors and lenders by working with customers on a case by case basis. If youâre feeling the strain of the crisis, whether because youâve lost some or all of your income or your expenses have increased, you can contact them and request some relief.
For borrowers struggling to meet monthly payments, Nissan offers deferred payments, but only if hardship can be proved. You likely wonât be offered anything just because you ask for it and must show that your financial situation is worse now than it was before the financial crisis.
The same applies to all Infiniti car owners, which is Nissanâs luxury brand.
Kia
Kia announced that all 0% APR borrowers could defer payments for up to four months. Borrowers who donât qualify for this can still request deferment of up to 30 days on 3 different occasions.
However, as with Nissan and many other providers, borrowers need to prove that they are experiencing hardship to be offered this auto loan relief.
General Motors
GM has seen some pretty hefty losses during the financial crisis, and this is despite the fact that it began the year on a high note, making noticeable gains that were all but wiped out in the first couple weeks of March.
GM is offering a few different options to keep consumers happy and to ensure cars are still driven out of the showroom. If you already have a finance program with General Motors, and youâre experiencing hardship, you can contact GM directly, tell them what youâre going through, and get assistance.
The GM OnStar program has also been activated for all current owners. This program offers 24/7 emergency assistance and can help you get to a hospital in your time of need.
If you need a new car, you can get 0% APR for up to 84 months on most GM manufactured vehicles.
Fiat Chrysler
Fiat Chrysler is another brand that began 2020 with a bang and then quickly suffered a substantial slump. To counteract this, it has improved its online offerings, allowing all consumers to purchase a brand-new vehicle online and to benefit from improved financing offers when they do.
In addition, Fiat Chrysler is assisting current owners by making it easy for them to pay their bills.
If you have a car made by this leading manufacturer and youâre struggling to make payments, contact them directly, tell them about your financial hardship, and they may offer to help you with deferred payments and other solutions.
Financial Crisis Auto Relief: Alternative Options
Contrary to what you might think, lenders are not desperate to get their hands on your collateral. The best outcome for them is that you meet your payments and they get every penny of the vehicleâs value along with the interest.
If you default and they are forced to repossess, they need to pay for the repossession, deal with the extra paperwork and hassle, and eventually sell the car for much less than it is worth. They can still chase you for what you owe, but they know they probably wonât get it, making repossession something that lenders are keen to avoid.
When youâre struggling to make your payments, be honest with them, lay it all on the line, and find a compromise. They will probably be a lot more forgiving than you expect, especially during the crisis, when everyone is more understanding and willing to help.
Unfortunately, you donât have many other debt relief options when it comes to auto loans, as it doesnât make sense to do a balance transfer and debt settlement simply doesnât work here. But if you contact your lender, theyâll help you find a solution.
You can think about returning the vehicle, as well. When you lose your job and your income, and you no longer need to drive several miles to and from work every day, whatâs the point of owning a car that costs you tens of thousands of dollars and leaves you with a substantial debt?
2020 Financial Crisis Auto Loan Relief is a post from Pocket Your Dollars.
Source: pocketyourdollars.com
What Is Uninsured Motorist Insurance?
If you buy or lease a car, youâll need to arrange for insurance coverage. Not only is it the law in most states, it will also protect your bank account in the event of an accident. However, if youâre involved in an accident and the other driver doesnât have car insurance, you could run into problems. Thatâs the thinking behind uninsured motorist insurance.
Compare checking accounts here.
Uninsured Motorist Insurance Basics
If two people who both have car insurance get in a car crash, they exchange insurance information. The other driverâs insurance company generally pays your expenses if youâre in a crash. So what happens if the other driver doesnât have insurance? Thereâs no one to pay you, cover your car repair or replacement or foot your medical bills if youâre injured. Your own car insurance may cover those costs, but it depends on the plan.
Thatâs where uninsured motorist insurance comes in. Uninsured motorist insurance policies offer protection against property damage or personal injury resulting from a run-in with an uninsured driver. There are a lot of bad drivers out there, and plenty of people who drive regularly but canât afford car insurance. Have a run-in with one of them and you could end up covering your own medical and car repair bills.
In 22 states and the District of Columbia, drivers are required to have uninsured motorist insurance, so if you have vehicle insurance youâre covered in the event of a crash with an uninsured driver. But if you live in a state that doesnât require uninsured motorist coverage, your regular car insurance policy may not protect you from bills if youâre in a crash with a driver who doesnât have car insurance.
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Is Uninsured Motorist Insurance Necessary?
If you live in a state that requires uninsured motorist coverage as part of the minimum coverage requirement for all auto insurance policies, you have at least some protection from uninsured drivers. You can always call your insurance company to check on the kind of coverage you have and discuss your coverage options.
If you live in a state that doesnât require uninsured motorist coverage, the question becomes: Should you buy uninsured motorist insurance as an add-on policy to your regular car insurance? Before you decide, itâs worth pricing it out.
First, you can call your car insurance provider and check what level of coverage you already have against uninsured motorists. Your existing plan may provide some level of protection against medical bills and/or car repair bills resulting from a crash with an uninsured motorist.
If you donât have any coverage or if you think your coverage levels are insufficient, you can ask your insurance provider how much it would cost you to add uninsured motorist insurance to your coverage package. You can also get quotes from other car insurance companies and opt for the policy that provides the best coverage for the lowest price.
Uninsured motorist insurance can give you some extra protections, too, such as coverage in the event that a hit-and-run driver crashes into your car or in the event that youâre struck by a vehicle as a pedestrian. So even those with built-in protection against uninsured motorists through their regular car insurance may be tempted to add extra coverage.
Related Article: All About Car Loan Amortization
Bottom Line
Just because you have car insurance that youâre paying for every month doesnât mean youâre protected in all eventualities. If reading this article has made you nervous that you might not have enough â or any â protection against uninsured motorists, this could be a good time to get your insurance company on the phone, particularly if you live in a state with a high percentage of uninsured drivers.
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What Is Gap Insurance, and What Does It Cover?
When purchasing or leasing a new car, you have several insurance coverage options. When selecting coverage, you will likely know if you want to have collision coverage or not, but will you know what gap insurance and whether to select that option? If you are driving your owned vehicle or a leased one, and it is totaled, your collision coverage insurance will cover your vehicleâs cash value. The coverage will help you to purchase a another car. However, what if you owe more on your car than itâs worth? That is where gap insurance comes in. Hereâs what you need to know about this type of coverage.
What is Gap Insurance?
Gap insurance protects you from not having enough money to pay off your car loan or lease if its value has depreciated, and you owe more on your car than it is worth. It is optional insurance coverage and is used in addition to collision or comprehensive coverage. It helps you pay off an auto loan if a car has been totaled or stolen, and you owe more than its worth. Gap insurance might also be known as loan or lease gap coverage, and it is only available if you are the first owner or leaseholder on a new vehicle.
Some lenders require individuals to have gap insurance. In addition to collision and comprehensive coverage, gap insurance helps prevent owners and leasers from owing money on a car that no longer exists and protects lenders from not getting paid by a person in financial distress.
How Gap Insurance Works
If you buy or lease a new car, you may owe more on the vehicle than it is worth because of depreciation. For example, letâs say you purchase a new car for $35,000. However, a year later, the car has depreciated and is only worth $25,000, and you owe $30,000 on it. Then, you total the car. Comprehensive insurance coverage would give you $25,000, but you would still owe $5,000 on the vehicle. Gap insurance would cover the $5,000 still owed.
Without gap insurance, you would have had to pay $5,000 out-of-pocket to settle the auto loan. With gap insurance, you did not have to pay anything out of pocket and were likely to purchase a new car with financing.
What Gap Insurance Covers
Gap insurance covers several things and is meant to complement collision or comprehensive insurance. Gap insurance covers:
- Theft. If a car is stolen and unrecovered, gap insurance may cover theft.
- Negative equity. If there is a gap between a carâs value and the amount a person owes, gap insurance will cover the difference if a car is totaled.
Gap insurance also covers leased cars. When you drive a new, leased car off the lot, it depreciates. Therefore, the amount you owe on the lease is always more than the car is worth. If you total a leased car, youâre responsible for the fair market value of the vehicle. If you lease, you can purchase gap coverage part way through your lease term, although many dealerships require both comprehensive and collision coverage and strongly recommend gap coverage.
What Gap Insurance Doesnât Cover
Gap insurance is designed to be complementary, which means that it does not cover everything. Gap insurance does not cover:
- Repairs. If a car needs repairs, gap insurance will not cover them.
- Carry-over balance. If a person had a balance on a previous car loan rolled into a new car loan, gap insurance would not cover the rolled-over portion.
- Rental cars. If a totaled car is in the shop, gap insurance will not cover a rental carâs cost.
- Extended warranties. If a person chose to add an extended warranty to an auto loan, gap insurance would not cover any extended warranty payments.
- Deductibles. If someone leases a car, their insurance deductibles are not usually covered by gap insurance. Some policies have a deductible option, so it is wise to check with a provider before signing a gap insurance policy.
Reasons to Consider Gap Insurance
There are several situations you should consider gap insurance. The first is if you made less than a 20% down payment on a vehicle. If you make less than a 20% down payment, it is likely that you do not have cash reserves to cover them in case of an emergency and that they will be âupside downâ on the car payments.
Additionally, if an auto loan term is 60 months or longer, a person should consider gap insurance to ensure that he or she is not stuck with car payments if the vehicle is totaled.
Finally, if youâre leasing a car, you should consider gap insurance. Although many contracts require it, the vehicle costs more than itâs worth in almost every situation when you lease.
Is a Gap Insurance Worth It?
Gap insurance keeps the amount that a person owes after buying a car from increasing in case of an emergency. Therefore, if someone does not have debt on his car, thereâs no need for gap insurance. Additionally, if a person owes less on his car than it is worth, thereâs also no need for gap insurance. Finally, if a person does owe more on a vehicle than it is worth, he may still choose to put the money that would be spent on gap insurance every month toward the principal of his auto loan.
If a person owes more on his car than it is worth and would be financially debilitated by having to pay the remainder of his car payments if his vehicle was totaled or stolen, then gap insurance might be a saving grace.
If the extra cost of gap insurance strains your budget then consider ways to keep your vehicle insurance costs down without skipping gap insurance.
The Takeaway
Gap insurance covers the amount that a person would still owe on a vehicle after it is stolen or totaled, and after comprehensive insurance pays out. It prevents people from continuing to owe on a car that no longer exists. While it doesnât make sense for everyone to purchase gap insurance, it is often smart for people who have expensive vehicles that are worth far more than a person owes. It is also something to consider when you are leasing a vehicle.
Tips for Reducing Insurance Costs
- If you need a little additional help weighing your insurance options, you might want to consider working with an expert. Finding the right financial advisor that fits your needs can be simple. SmartAssetâs free tool will match you with financial advisors in your area in five minutes. If youâre ready to learn about local advisors to help you achieve your financial goals, get started now.
- You may want to consider all the insurance options available that are suitable for your unique situation. By doing so, you save money. A free comprehensive budget calculator can help you understand which option is best.
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The post What Is Gap Insurance, and What Does It Cover? appeared first on SmartAsset Blog.
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