Most of us at some stage look to take out car loans out to help us buy that special car we have always wanted.

Well, lenders (and that includes car manufacturers and dealerships) look to sell you Payment Protection Insurance alongside any unsecured loans. After all, it makes sense, they get commission, and why should you risk losing the car by defaulting on your loan payments due to illness or redundancy and give yourself a poor credit rating along the way. This default information will stay on your credit records for up to 6 years making it more difficult to obtain credit for something else in the future!

You still however need to be careful and ensure you know what you are buying. Five motor dealerships have recently been fined a total of £175,000 by the Financial Services Authority (FSA) for mis-selling payment protection insurance (PPI) for serious breaches of the rules.

Margaret Cole of the FSA stated:

“Motor retailers that sell PPI have to meet the same standards as the rest of the financial services industry. All firms selling PPI must treat their customers fairly, including taking proper steps to make sure sales are suitable and customers are eligible to claim on the policy,”

The FSA said the motor dealers failed to check whether the customers’ circumstances could have excluded them from claiming on a policy after it had been sold, and did not monitor the quality of advice being given by their sales staff.

The FSA has fined 11 firms and censured two motor dealerships since 2006 in an effort to stop people being sold policies when they are not necessary, benefits and conditions are not explained properly, or PPI is simply added to the cost of a loan without the customer’s knowledge.

So please, keep an eye out and ensure you are fully aware what is included in your car loans agreement repayments and ensure you actually need the cover offered and make sure you disclose any facts (medical or otherwise) that you think may affect your eligibility for cover.

There is nothing more frustrating than paying for cover to find your claim is refused when the time comes due to what is usually termed “non disclosure of a material fact”.

Insurance fraudsters are raking in millions and millions of pounds a year at the expense, and risk, of innocent road users.

A 2 year long investigation into a criminal syndicate that organised a ‘crash for cash’ car insurance scam by staging road traffic collisions and subsequently  submitting false insurance claims concluded at St Albans Crown Court on 4 August 2008 with 13 members of the gang receiving a total of 10 years’ imprisonment.

Breaking heavily without any warning and for no apparent reason appears to be one of the ways these fraudsters manage to stage these fraudulent accidents with other vehicles. Their timing and the close proximity of their vehicle at the time makes it virtually impossible to avoid hitting their vehicle.

They then claim for damage to their vehicle against the driver’s car insurance often boosting their payout by claiming injury such as whiplash.

This is alleged to be the most serious fraudulent claims problem currently faced by the car insurance industry at the moment costing them in excess of £200million each year, a cost which is of course passed on to the rest of us.

It is estimated that this sort of activity bumps up insurance premiums by 5% per annum.

Police have been issuing warnings for drivers to be vigilant as this pandemic like activity spreads throughout the UK.
The targeting of innocent motorists by fraudsters is a significant and growing risk to public safety and the Insurance Fraud Bureau (IFB) is working closely with regional police forces to expose and prosecute the criminal networks involved.

The IFB runs a free and confidential service for anyone with information on insurance fraud or who fears they may have been a victim of a staged accident.

Please call their confidential Cheatline on 0800 328 2550 or for further information visit  The Insurance Fraud Bureau website

If you have really set you heart on owning a high performance sports car, then you should not let the costs of running it stop you.

Just like the cars themselves, performance and sports car insurance are specialised areas. Good sports car insurance will cover the vehicle against a number of events such as property damage, medical costs, legal expenses and liability.

The principles for the insurance are pretty much the same as if you owner a more standard type vehcle i.e. premiums will be partially based on your personal driving record and your age etc.

Each vehicle will also have their insurance grouping based around its power to weight ratio and of course the cost of replacement parts.

Because any joyrider or car thief is likely to try and steal your sports car rather than say a standard vehicle parked next to it, make sure you have a good security system fitted. Your potential insurer may even demand a specialist system is fitted but don’t be put off by this, they may offer a discount for meeting this requirement.

Make sure you tell them exactly what the vehicle will be used for and when. You can expect to receive discount if you are only going to drive it for 2500 miles a year or at weekends. Make sure you disclose any modifications and store it in a garage when not in use.

With sports car insurance, finding a good broker able to deal with helping the customer choose an appropriate policy, paperwork and negotiations with the companies, and later with possible insurance claims can be a good move.

It would seem that “Pay-As-You-Go” (PAYG) isn’t just for mobile phones anymore. In America it turns out some car insurance companies are switching to these type of plans in order to offer better rates to their customers.

An interesting concept which is in it’s infancy, but slowly filtering across the water to the UK. There are only a limited number of insurers offering such a service in the UK at the moment and only time will tell whether the concept actually takes off.

The insurance model works in a very similar way to the ‘PAYG’ tariff model that was developed by Vodafone in the 1990s.

With PAYG car insurance, you can buy car insurance as and when you need it. So, if you don’t use your car much, or just fancy borrowing a car for a week, PAYG car insurance could be the ideal solution.

Although it is being argued by some that there should be a limit to how much premiums should be  “tailored” to individuals, the initial results of the ‘PAYG’ car insurance model look positive for infrequent drivers, particularly for those in the younger age-groups.

Some other car insurance companies have warned that mileage represents only a small element of what constitutes premiums - but initial results show that motorists who don’t use their car very often could save a significant amount of money on their insurance policies.

If you are a young driver under say 25 years old, don’t readily accept the 1st insurance quote you receive.

The way the market is at the moment, may leave you thinking, thank god, someone that will insure me, I’d better take them up on their offer quickly just in case they change their mind!

Don’t rush into it; even young drivers can avoid paying higher premiums for their car insurance if they shop around different providers.

A recent report by the Association of British Insurers’ revealed that car insurance can account for up to 50 per cent of a young person’s motoring costs - whereas motor insurance premiums for experienced drivers only account for six per cent of their total car-related outgoings.

Whether this is fair or not, it is what the insurance market feels is fair!

It is common knowledge and historically provable that young drivers under the age of 21 are statistically more likely to be involved in an accident and their associated claims cost in the region of four times more than accidents involving drivers over 30 years of age, it does not necessarily mean that that this is the case for all young drivers.

Don’t be afraid to shop around, look out for those special deals where insurers are offering 12 months cover for the price of 10 etc. and look out for introductory offers/discounts.

A useful tool but not necessarily offering the best rates.

Insurers are hitting consumers who buy policies through price-comparison websites with higher premiums.

Some costs are almost 50% more than they would be going to the insurer directly, figures from consumer group Which? show.

It means thousands of people who believe they have the best deal are paying over the odds for home and car-insurance policies.

Some car insurance policies were also more expensive via price-comparison sites.

Cathy Neal at “Which” said

“Consumers need to check different sites as they offer different deals”

Not all comparison sites operate on the same basis and while many may offer the same product through these sites, insurers will tend to charge each company slightly different prices and even offer slightly different policy benefits.

Insurance companies will not simply offer lowest premiums to those comparison sites offering the highest volumes. They are looking to make a profit and have a responsibility to their shareholders and other policyholders to ensure the business they take on is sound. They closely monitor income v expenditure (pay outs due to claims etc.) and will adjust premiums accordingly.

So it is not always “biggest is best”. It is always worth checking with specialist car insurance providers/brokers as believe it or not, if their client base offers the insurer better returns on the premiums generated, they may be able to negotiate a better deal for you.

Car owners can now expect to find the search for cheap insurance premiums more difficult as premiums resume their upward trend according to the latest release of the AA’s quarterly British Insurance Premium Index.

At a time when motorists are struggling to meet car running expenses, the rising cost of insurance is adding to the burden. The index, which tracks industry-wide car and home insurance premiums shows that more than £20 has been added to the average premium quoted for comprehensive car insurance during the last quarter.

Young drivers, who typically buy third-party, fire and theft insurance and already pay the highest car insurance premiums, and have been hardest hit. Since the last index in March 2008, they have seen their average premium increase by more than £45.

Be in no doubt, car insurance costs are increasing making it even more important to ensure you shop around. This is on the back of the fact that even though traffic accidents involving injury are reducing, the costs of dealing with those fewer injury claims continue to escalate and insurers will not hesitate to pass those increased injury claim and legal costs on to the consumer.

These findings are not good news for those with third-party, fire and theft insurance, particularly for younger drivers (under the age of 21 years) where the average insurance claim they make is nearly four times greater than claims made by drivers aged 30 or over.

We all think about it, but probably say, “ well, c’est la vie, there’s nothing we can do about it!” and you are right, there is nothing we can do about it. All transport has maintenance and running costs. For some, namely those running their own business, there is facility to offset these costs against income for tax purposes but for most of us, we simply have to pay them.

The following guide is aimed to outline and remind you not to ignore the financial burden that the average private user needs to think about to run a petrol or diesel car and help you decide which car is right for you.

Firstly, the costs of motoring should be considered under under two headings: Standing Charges’ which you have to pay whether you use the car or not, and ‘Running Costs’ which are the actual costs of using the car.

Standing charges

These are the basic costs incurred to ensure the vehicle available for use. Think about road tax, insurance, the cost of purchasing the vehicle, the loss in value of the vehicle (depreciation) plus any kind of breakdown cover.

Running costs

These are the costs that depend directly on the extent of use of the vehicle such as fuel, including parking and tolls, tyres, servicing and repair costs. These costs can be expected to increase the more the vehicle is used and of course year on year as the car gets older.

Vehicle groups

Cars are put into groups depending on their price when new and are partly dependent on levels of their carbon dioxide emissions meaning that the market share of lower emitting vehicles is expected to continue to grow. These emissions are now used to assess the  car tax band you are required the pay. As a rough guide, the lower your car’s emissions, the lower you can expect your car tax to be.

Car groupings also affect car insurance premiums, again, the lower the car grouping for insurance purposes, the lower you can expect your premium to be.

Finally, never forget, economy isn’t the be all and end all, you need to ensure the car you purchase is “fit for purpose”. It’s no good buying a small car with excellent low standing charges and running costs only to find that it isn’t big enough or have enough power to tow that beloved caravan!

Simply balance it all up!

Several factors determine the level of alcohol in a person’s blood such as their sex, weight, and age. This means, drivers who have a drink can never be certain that they are not over the legal limit which is currently 80 micogrammes per 100ml of blood.

With the ever increasing alcoholic strength of some beers, wines and spirits, it’s not surprising that we get confused about the amount we can safely drink.

Research shows that 29% of drivers take a gamble and will drive after having ‘just one drink’ at a BBQ or summer picnic.

The government, with the help of the media are quite adept at reminding us that drink-driving and speeding can have some severe consequences and not just for the driver themselves.

There are more damaging, longer lasting consequences.

On average, 3,000 people are killed or seriously injured every year in drink driving collisions with nearly one in six road deaths involving drivers who are over the legal alcohol limit.

Speeding is not really any better with almost 7,300 accidents caused by speeding motorists. Over 16,000 are caused by people travelling too fast for the prevailing weather conditions.
 
We are all probably guilty of relaxing our concentration and soaking in the rare good weather feelings we get when out on the open road in the sunshine but we should remember that we are not only risking our own lives, but those of our passengers and fellow motorists. All too often, we read about innocent motorist being killed as a result of some other driver failing to maintain control of their vehicle.

The best way to keep your insurance premium down is to be a safe and responsible driver.

Alcohol related and dangerous driving convictions carry severe financial penalties. Driving or attempting to drive whilst above the legal limit currently carries a maximum penalty of 6 months’ imprisonment, a fine of up to £5,000 and a minimum 12 months driving ban.

An endorsement for a drink-driving offence remains on a driving licence for 11 years, so it will take over a decade before a convicted driver will have a “clean” licence again and can expect to pay the same sort of insurance premiums as the more responsible drivers. £000’s of wasted, all for the sake of a single drink!

Now if you had to pay £1,000 for a pint of beer, you wouldn’t would you? No of course you wouldn’t yet a lot of people seem to be willing to risk having to pay that amount for that pint afterwards.

And those of you who think “it will never happen to me” – remember, every person in those statistics mentioned above, probably thought the same!”

Doesn’t really make sense does it?

It’s time; the new 58 plates are due on the roads from today, 1 September.

If you haven’t already made that decision to replace your car just yet, you may be seriously thinking about whether to bother.

After all, it’s a major expense, the current economic climate is uncertain to say the least with inflation, house prices, interest rates all looking unfavourable making you think carefully this year!!

Compound this with a mixture of astronomical and ever increasing fuel costs, insurance premiums and the new road tax regime seeing many road tax demands increase substantially could be deciding factors in making you call a halt to purchasing that lovely new car just yet.

But is this the right decision?

There is no doubt that the cost of new cars will need to fall this year to attract consumer interest.
 
When you consider that many new cars will come with up to 1 years free insurance, free servicing and extremely long warranties, it may be a false economy to delay your decision. However, you will still need to be very selective and negotiate hard to secure that exceptional deal.

Those who are interested in a new car and are able to pay cash are in a very strong position. You can literally bargain with the garages for a host of add-ons and extras which may not normally be available. Now is the time to grab a bargain and get as much as you can from the struggling car industry.

After all, they will not hesitate to take advantage of you when the market improves and remember, what you don’t ask for, you don’t get!

It costs nothing to ask!