Monthly Archives: May 2018

Young Drivers, Marijuana and Car Insurance

Marijuana, young drivers and serious car accidents are on a collision course. Fatal crashes involving drivers whose systems showed evidence of THC, the active ingredient in marijuana, nearly tripled in 10 years, rising from 4.2 percent in 1999 to 12.2 percent in 2010, according to a study released earlier this year by Columbia University’s Mailman School of Public Health. In another four-year study, 43 percent of fatally injured drivers under 24 tested positive for cannabinoids. The percentage was lower for older age groups.

Now that marijuana is legal in Colorado and Washington and widely tolerated elsewhere in the U.S., parents may be on their own collision course with pot: They face steep car insurance hikes and even cancellation if young drivers on their policies are convicted of a DUI stemming from marijuana use. Here’s what parents need to know about drugged driving and the effect it can have on insurance coverage.

Drugged Driving: A Growing Concern
Pot use behind the wheel is a subset of a category that law enforcement and the traffic safety community call drugged driving. Every state has laws addressing it. In many, the laws say if a driver is stopped and authorities can prove the individual drove under the influence of any substance that impairs driving ability, he or she could be convicted of a DUI. Nearly one-third of states feature “per se” laws. These more strict laws say that any amount of a controlled substance found in the driver’s body is evidence of impaired driving.

The hazards of drunken driving are well known. A growing concern among researchers, law enforcement and those in the traffic safety community is the destruction wreaked by individuals driving under the influence of drugs including marijuana, cocaine and prescription and over-the-counter drugs. Conservative estimates put the cost of these accidents at 6,700 deaths and nearly $60 billion in costs each year.

The effects of marijuana use on driving vary from one person to the next. In the words of the National Highway Traffic Safety Administration (NHTSA), “It is difficult to establish a relationship between a person’s THC blood or plasma concentration and performance impairing effects.” Concentrations of the drug are “very dependent on patterns of use as well as dose.”

Insurance Follows the Car
Driving while stoned is a serious matter for teen and twenty-something drivers, who risk death, injury, criminal prosecution and civil lawsuits. In addition to those outcomes, drugged driving also can have financial impacts on parents, who often own and insure the cars their adult children drive.

“Insurance follows the car, not the driver,” says Loretta Worters, vice president of communications for the Insurance Information Institute, a national insurance trade association. A young person’s drugged-driving conviction is likely to be treated like a drunk driving conviction, whether the recreational use of pot is legal in that state, says Bob Passmore, personal lines policy senior director with the Property Casualty Insurers Association of America.

“As with any DUI conviction, your insurance company could cancel your policy, ask you to take the individual off the policy, or keep him or her on at a much higher rate, depending on the rules in the state,” Passmore says. “The individual with the conviction might need to get their own policy.” That would come at a much higher rate than if the driver is on his parents’ policy, he says.

Worters agrees. If a young person is convicted of driving under the influence, “insurance rates will jump astronomically, because driving under the influence is illegal,” she says. “DUI convictions can result in multi-year jail terms. You’re also putting the parents’ assets at risk” if there are civil lawsuits in connection with the accident, she warns.

Not every teen uses pot, of course. In 2012, less than 8 percent of youths ages 12-17 had used marijuana in the past month, according to the 2012 National Survey on Drug Use & Health. And about 80 percent of teens say they disapprove of their friends using pot. Pot use increases markedly for young adults, however. In 2012, 18.7 percent of 18-to-25-year-olds had used marijuana in the past month.

If your child does use pot, you may need to take a tough stance when it comes to his or her use of your cars.

“Parents may want to consider either taking the car privileges away until they’ve cleaned up their act, or taking them off your insurance policy,” Worters says. An insurance company may not be comfortable with a young driver continuing to be on the policy if they’re “living in the same house, having possible access to the keys, even if they aren’t driving,” she says, “because that risk is always there.”

Talk to Your Insurance Agent
Parents should consider contacting their insurance agent to assess their coverage, preferably before a teen drives under their car insurance policy, experts says. Parents also might want to review their liability limits and consider an umbrella liability policy. This will provide protection in case their child causes a serious injury and is sued.

“You want to make sure you and your child are protected,” Passmore says.

Car Insurance for Teenage Drivers

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The statistics about teenage drivers aren’t good. According to the Insurance Institute for Highway Safety (IIHS), 16-year-olds get into accidents almost six times more often than drivers between the age of 30 and 59. No wonder car insurance premiums are so high for this age group.

However, not all car insurance companies take the same dim view of young drivers. And some discounts are available to help you cut costs. Remember, the higher the risk, the higher the cost of insurance premiums. Let this be your guiding principle as you shop for insurance.

Here are 10 suggestions to help lower premiums and keep your teenager’s license free of violations:

1. Help your teen learn the laws and follow them to the letter. By far, the best way to lower car insurance costs for teens is for them to keep their driving record clean. Make safe driving a family project. In some states, restrictions apply to new drivers. Parents should know what the laws are and insist that their sons and daughters follow them.

2. Set a good example. Do you break the speed limit and tailgate? Do you yell at other drivers when you’re behind the wheel? If you do these things, how can you expect your children to act differently? Start watching your own driving long before they get their license and you’ll have a much easier time convincing them to be safe drivers. Remember, actions speak louder than words.

3. Put your teenager on your policy. Rather than setting up an independent policy for your teen driver, put them on your auto insurance policy as an additional driver. In this way, all the discounts applied to your policies will be passed on to them.

4. Pay your teenager to get good grades. Here’s a creative tip — find out how much you save if your teenager gets a good grade point average and pass it on to them. Usually, having a 3.0 or higher GPA will reduce your car insurance premium by 10 percent. Figure out exactly how much this saves you and give that money to your teenager. This accomplishes two things. First, it provides a direct reward for academic performance. Secondly, it motivates them to continue getting good grades.

5. Enroll them in driver education courses. Discounts are available for teens who take recognized driving classes. But call your car insurance company to find out which schools are covered before paying big bucks.

6. Steer clear of sports cars. Don’t try to live vicariously through your teenager by giving them the hot car you couldn’t get in high school. Getting your teenager a safe car to drive, with the latest safety equipment, will lower your premiums. Not only will you save money on car insurance, but fast driving will be less of a temptation.

7. Get their support. Don’t assume that your teenager wants to vacuum clean your wallet. Ask them for help cutting costs and point out that you will share in the savings (see rule #4). Tell them how much car insurance costs and show them how this fits into the family budget. If nothing else, you will score points for treating them as adults.

8. Talk to your kids about drugs and alcohol. This is a tough subject to broach with teenagers, who think they have everything under control. But the consequences of saying nothing can be catastrophic. Take the time to lay down some guidelines in this important area.

9. Take traffic school to beat tickets. Once a ticket is on your teen’s license, it takes months to get the violation removed. Instead, encourage them to take traffic school if the judge allows it. A day spent thinking about the consequences of unsafe driving can bring rewards for years to come.

10. Ride with your teenager. Your teenager was a safe driver last year when he or she got a license. But what’s happened since then? Let your son or daughter take the wheel while you sit back and relax in the passenger seat. If you see them doing something that breaks rules or seems unsafe, point this out in a diplomatic way. If they are doing a good job driving, praise them for their efforts.

If you follow the above suggestions, you will find that you can make it through the teenage years safely — and without paying an arm and a leg for car insurance. It just takes cooperation and understanding from both sides of the generation gap.


How To Fix Your Car’s Oxygen Sensor

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If your car’s “Check Engine” light is glaring at you, it’s probably because the oxygen sensor is malfunctioning. That’s right, the oxygen sensor. It’s a little device that’s a mystery for most drivers but its misbehavior is the problem that most commonly triggers a Check Engine light, according to CarMD.com, which sells an automotive diagnostic tool and provides repair information. The oxygen sensor unseats the formerly most common Check Engine light culprit: a loose gas cap. There are fewer reports of that problem because savvy motorists have learned to fix it themselves and consumers now buy new cars with capless gas tanks.

But don’t despair. Replacing your car oxygen sensor will keep you from wasting money by burning extra gas, and the repair isn’t horribly expensive. We know this firsthand. We had to replace the O2 sensor on our 1996 Lexus ES 300, the subject of our Debt-Free Car project, and it wasn’t as much of a hassle or expense as we had feared.

After the dreaded Check Engine light appeared in our Lexus, we plugged the CarMD device into the car’s computer to read the error code. In our case, the code was P0135, which meant that the oxygen sensor in “bank 1” was malfunctioning. It was surprising to learn that something was wrong with the car, since it still seemed to be running fine.

Even though a car seems to be behaving normally, a faulty oxygen sensor will cause the engine to start “gulping down gas,” says Kristin Brocoff, director of corporate communications for CarMD.com. She says this problem can cause up to a 40 percent reduction in fuel economy. Sure enough, when we checked our fuel record for the driving we did while the Check Engine light was on, our mpg had taken a hit.

The oxygen sensor, developed in the early 1980s, is an essential part of the car’s emissions control system, says John Nielsen, director of engineering and repair for the American Automobile Association (AAA). The sensor is about the size and shape of a spark plug and protrudes into the car engine’s exhaust stream. It determines if there is a lot or a little oxygen in the exhaust, so the engine can make adjustments to the amount of fuel being used in the engine to run at maximum efficiency.

Oxygen sensors in older cars fail for a variety of reasons, according to Bosch, a leading manufacturer of auto components. In some cases, sensors are fouled by gasoline additives or oil from worn engines. Newer oxygen sensors can last 100,000 miles if conditions are right, but often problems occur sooner.

After we plugged CarMD’s diagnostic device into the Lexus’ onboard computer port, we connected it to our desktop computer. It accessed a database of information about this engine code and how to have it repaired. Among other things, the report included an average estimate just to buy a new oxygen sensor: $168.82.

At the first sight of a Check Engine light, most owners of new cars that are still under the factory warranty would simply make a beeline for the dealership’s service bay. But car owners on a budget might want to go the do-it-yourself diagnosis route to save money. By using the CarMD device, or any engine code reader, drivers can learn what the problem is, and the skill level required to fix it, before attempting the task.

Modern cars have two to four oxygen sensors, Nielsen says. A V6 engine, such as the one in our Lexus, has one sensor in each exhaust manifold and one after the catalytic converter. The sensors simply screw into place, but reaching them can be a problem for do-it-yourselfers. Additionally, since the exhaust subjects the sensor to extreme heat, it can “seize” (become frozen in place) and be tough to unscrew. A new sensor comes with anti-seize compound to apply to the threads, but the compound should never be put on the sensor itself.

Nielsen says that while a code reader might indicate that the problem is the car oxygen sensor, there are other problems that can trigger the identical code — a disconnected vacuum hose will do it, for example.

As a first step, a car owner can look under the hood to see if there are any wires or hoses disconnected, Nielsen says. In some cases, a wire leading to the oxygen sensor could be broken or burned out. If nothing obvious is visibly awry, it’s time to go to what Nielsen calls “a trusted mechanic.” Reputable garages use an expensive diagnostic machine called a scan tool — not to be confused with an inexpensive code reader — that can watch the operation of the engine in real time and see if the oxygen sensor is actually the problem.

“Most motorists would be well served to find a shop that they trust and take their car there for all oil changes and tire rotations,” Nielsen suggests. “Then, when they have a problem with something like an oxygen sensor, they trust what the mechanic is saying rather than thinking that they’re trying to rip you off.”

In our case, we learned that the faulty O2 sensor was in the rear of the engine and difficult to reach, so the fix seemed above our skill level. Instead, we took the Lexus to Overseas Garage, in Long Beach, California. There, the mechanic told us that the new sensor would cost $117, plus $144 in labor for a total of $261. This was close to the $246 average cost cited by CarMD’s Brocoff.

While many people opt to simply ignore “Check Engine” lights, Brocoff says this can cause bigger, more costly problems later. “So the problem you could have fixed for a few hundred dollars turns into a repair of the catalytic converter, which would be over a thousand.”

Driving back from the garage, it was a relief not to stare at the glowing check engine light. This made us realize that fixing such a problem provides another benefit: peace of mind.

Should You Get Credit Insurance When You Buy a Car?

For most of us, buying a car is the second largest financial transaction we’ll make, next to buying a home. And we’re likely to get loans to finance our car purchase. In the fourth quarter of 2014, 84 percent of new cars purchased were financed, according to Experian Automotive.

If you’re financing your car purchase through a dealership, it’s also likely that the finance and insurance manager will offer you warranty and insurance products, such as an extended warranty, gap insurance or tire-and-wheel protection. The F&I manager might also offer credit protection, which is meant to cover your car payments should you be unable to pay them yourself because of layoff, injury, illness or death.

The most venerable of these products, with an almost 100-year history, is credit insurance. Consumer groups have long been leery of credit insurance products, which are offered not just for cars, but also for credit cards and other consumer loans. Often, the consumer groups contend, the products are expensive and unnecessary. Further, there have been instances of lenders forcing the credit insurance on consumers.

Payout rates (the premium dollars paid compared with the amount paid out in claims) are typically low. That’s because the money is going to commissions, he says.

There are some decent providers of credit insurance, such as credit unions, Kukla says, but it’s tough for consumers to know which products are worthwhile and which ones are rip-offs. To protect themselves, potential buyers should look for coverage they can afford that specifically addresses their financial concerns and which comes from a reputable insurer. The insurance department in your state is the place to check in order to see that the company is licensed and legitimate, says automotive expert Lauren Fix.

The three most common types of credit insurance coverage are:

Credit life: This pays off all or some of your loan if you die during the time you’re covered.
Credit disability: Pays on the loan if you become ill or injured and can’t work during the time you’re covered. It’s also sometimes called credit accident and health insurance.
Credit involuntary unemployment: Pays a specified number of monthly loan payments if you lose your job through no fault of your own, such as in a layoff, during the coverage term. It’s also known as “involuntary loss of income” insurance.

None of these coverages is required with a car loan. You can’t be denied credit if you say no to a credit insurance offer, Kukla says.

Payment Protection: A Newer Product
A more recent type of credit protection is called debt protection, which might also go by such names as debt cancellation, debt suspension or payment protection. Federal law allows national banks, most state-chartered banks and credit unions to offer this benefit without involving an insurer. The bank or credit union fills that role.

Debt protection provides benefits that are similar to credit insurance. It’s typically offered when you sign your loan papers.

A New Approach: The Walkaway Program
The Great Recession of 2007-’09 had a devastating impact on consumers and brought car purchasing to a near standstill. Who could feel comfortable buying a new car if there was a good chance you’d lose your job tomorrow? The recession has had “a major impact on the psyche of the car buying public,” says Steve Klees, senior vice president at EFG Companies in Irving, Texas.

In the midst of the recession, EFG partnered with Hyundai to offer the Hyundai Assurance program, introduced to consumers during the 2009 Super Bowl. It offered people the peace of mind to buy that new car. If you lost your job within a year of buying your new Hyundai, the automaker promised, it would take the car back. By the time that program ended in 2011, 350 people had returned their vehicles.

While Hyundai Assurance is gone, EFG makes available a similar product, called Walkaway, which is available through 350-400 dealerships, banks and credit unions across the country. When an involuntary job loss or other triggering event happens, the program releases customers from a car lease or loan obligation. Typically, the dealership, credit union or bank pays for the first year of coverage. After that, customers have the option of purchasing the coverage package for $395. There are no underwriting guidelines or restrictions except that the purchase price of the vehicle must be less than $75,000. “That’s probably 99.9 percent of all cars,” Klees says.

Klees says the “sweet spot” for Walkaway is with customers ages 25-40 — not surprising given that this group is least secure in their job situation, compared with other groups. Klees, a 35-year veteran of selling credit insurance and other add-on products, says purchasers of traditional credit insurance tend to be older.

What To Ask Yourself and the Lender
The popularity of debt protection products has been on the wane over the decades. In a long-term study for the Federal Reserve, the percent of people who said they purchased debt protection coverage in 1977 was 63.9 percent. In 2012, that dropped to 22.7 percent.

If you are interested in a debt protection product, the Center for Responsible Lending suggests that you purchase the products through a credit union or bank, where the rates may be lower. Compare any dealership price quote and terms to ensure you’re getting the best deal for comparable coverage. Also, the National Association of Insurance Commissioners advises you to ask these questions before you buy:

  • What’s the premium? Will it be financed as part of the loan? And will that increase your loan amount so you’ll have to pay additional interest?
  • Can you pay the premium monthly instead of financing the entire premium as part of your loan?
  • What’s the loan payment minus the credit insurance?
  • Will the insurance cover the loan’s full length and amount?
  • What are the limits and exclusions on payment of benefits?
  • Is there a waiting period before the coverage becomes effective? If so, how long?
  • With a co-borrower, what coverage does he or she have? What’s the cost for that coverage?
  • Can you cancel the policy? What kind of refund is available? Are there any penalties?

It’s also wise to see if you have other insurance that might eliminate the need for a credit insurance contract in association with your car purchase. A term life insurance policy would provide benefits in the event of your death. Your employer may make disability coverage available. Check with your insurance agent to see what your current coverage would provide before you buy credit protection.

If at any point you feel pressured to buy credit insurance, it’s best to simply walk away and consider your options in a pressure-free environment. In the words of the National Automobile Dealers Association, “once you sign the contract, you are legally obligated.”

The High Cost of Losing Your Keys

Our car keys have an uncanny ability to get lost inside coat pockets or underneath couch cushions — or to disappear altogether. Prior to the 1990s, this wasn’t a big deal. You could get a spare key at any hardware store or locksmith shop, not to mention at the car dealership, of course. But because it was easy to copy a key, it was also easy for a thief to steal your car. These days, advances in key technology have made vehicles more difficult to steal, but the price has been costlier key replacements.

Here’s a rundown of what you’ll face in the way of cost if you have to replace your key, along with some alternatives that could lower the bill. The prices quoted here are for Santa Monica, California, and West Los Angeles, an area where an hour of labor at an auto dealership can cost more than $100. Labor costs in your region may vary.

Basic Keys and Fob
A basic car key, which was common up until the mid-to late-1990s, has no security feature other than its unique cut. The shank, which is the long metal part of the key, has cuts and grooves like a house key. It’s easy to copy these keys. A locksmith doesn’t need any extra equipment: He can use the same machine he uses to cut other keys.

A basic key will cost about $3 at a locksmith. The only benefit of having the job done at the dealership would be to get the automaker’s branding on the head of the key. A Honda dealership near the Edmunds office charges about $12 for a basic key.

On most modern cars, an electronic key fob (also known as a remote or transmitter) is an integral part of the key set. At the dealership, the cost of replacing an electronic fob can range from $50-$90, depending on the automaker or complexity of the design. All fobs need to be programmed. Some dealerships will do it for free, while others will charge a half hour to an hour of labor.

There is a way around this fee, however. Most fobs can be programmed with a specific combination of button presses on the remote and key turns in the ignition. Some owner’s manuals will show you how to do it, and you can also find this information online.

Finally, there are aftermarket fobs that you can purchase online or from a locksmith. Like most aftermarket products, the quality will vary, but they are a less expensive alternative if you’ve lost your fob.

Transponder Keys
After the mid- to late-1990s, manufacturers began placing a transponder chip in the plastic head of the key. The chip emits a signal to a receiver in the ignition. If this “immobilizer” detects the wrong signal — meaning that the wrong key is in the ignition — the vehicle will not start.

A transponder key’s shank is either a basic key or a laser-cut key (more on laser-cut keys later). The major difference between a basic key and a transponder key is that the chip in the transponder key must be programmed before it can start the vehicle. All dealerships have the machines necessary to program the key. Some might program it for free, but others will charge up to an hour of labor. Most auto locksmiths should also have these machines.

In some vehicles, the transponder key and the fob are an all-in-one unit. This adds to the price of the key and makes it more difficult to get a spare anywhere but at the dealership.

We checked the price of a basic transponder key on a late-model Ford F-150. The dealership quoted $160 for the key and an additional $75 for the fob. If you go to a locksmith, expect to pay roughly $20-$30 less.

A potential low-cost alternative for access to your car is to order a basic key without the transmitter. This key will do everything but start the engine and can come in handy if you ever leave your keys inside the vehicle.

If you’re the type who frequently loses keys, you might be able to save money on the programming by creating a third key to have as a spare. If you already have two keys, a number of vehicle brands will allow you to program a third key on your own. You can have a locksmith cut this “emergency” key and then you follow the procedure for programming, which can frequently be found in your owner’s manual. If the manual doesn’t show you how, try searching online for the procedure. Try “How to program a (insert your year, make, model) key” as your search terms.

Our searches found a method that is said to work on many domestic vehicles. Insert one of your two working keys and turn the ignition to the “on” position for at least three seconds (the car does not need to be started), then repeat the process with the second key.

Now insert the new third key and again turn it to the “on” position for another few seconds. This should program the extra key. Before you try this method and spend money on a key, however, we suggest you check with the dealership or your local automotive locksmith to see if the process is one that will reliably work with your car.

Laser-Cut Keys
You can tell a laser-cut key apart from a basic key because the shank is slightly thicker and has fewer carved-out grooves. Laser-cut keys are often referred to as sidewinder keys, due to the distinctive winding cut on the shank. The machines needed to cut these keys are significantly more expensive than a standard key-cutting machine and are not as likely to be found at every locksmith or hardware store.

Laser-cut keys also have built-in transponder chips and they need to be programmed at the dealership or by a locksmith, preferably one who is a member of the Associated Locksmiths of America (ALOA). You can search for a certified locksmith near you by visiting the AOLA Web site.

All-in-one laser-cut keys are becoming more popular, but as we mentioned, these keys are more expensive and typically need to be replaced at the dealership. Including labor, these can range from $150-$250, which is the price of a laser-cut key for a Honda Insight, for example.

Switchblade Key
Switchblade keys have shanks that fold into the fob when they’re not in use and pop out with the press of a button. They can have a basic cut or a laser cut. One small advantage of the switchblade key is that its components can be purchased separately. If for some reason your key is damaged and no longer works, you can buy the shank separately for roughly $60-$80. But the more likely scenario is that you’ve lost your key, in which case you’ll need both it and the fob into which it folds. This can cost between $200 and $300, once you factor in programming of both components.

Smart Keys
Smart keys aren’t keys in the traditional sense. They are fobs that are either inserted in the dash or, in the more advanced systems, they stay in your pocket or purse. The driver turns the car on and off with the press of a button.

A smart key’s main form of security is its ability to use rolling security codes. The system randomizes the correct code and prevents thieves from hacking it through the use of a device called a code grabber. The vehicle’s computer recognizes the code emitted by the smart key and verifies it before starting the engine. Mercedes-Benz was one of the first automakers to utilize this technology, and even coined the term “SmartKey.” Every vehicle in its lineup now uses the SmartKey. And only dealers can replace them.

“The German brands use proprietary technology,” says Mike Howell, owner of Santa Monica Lock & Safe Co. “We’re not able to copy those.”

Smart keys aren’t just limited to German automakers. Nearly every car brand has a smart key bundled in its high-tech packages. Nissan, for example, makes it available on a number of models ranging from the Altima to the 370Z.

With a smart key, there’s no avoiding the dealership for a replacement. And while it’s handy to carry smart keys in your purse or pocket, these are the very places you will feel the pain when you lose them. The cost of replacing and reprogramming a smart key can range from $220 on a Nissan Altima up to $400 on an Acura RL.

Better Safe Than Sorry
There’s no denying that modern keys are expensive. And so the best defense against losing them is a good offense. It is better to get a spare key now, on your terms, than to stress out and spend the money in what might be an emergency. You can take advantage of the cost-cutting methods here and avoid the labor charges by programming the key yourself.

Finally, if you are someone who is tempting fate by only having one set of keys, consider this: If you lose all the keys to your car, you will need to get it towed to a dealership and it can potentially cost you close to $1,000 to replace the locks on your car.

Do You Have the Right Car Insurance?

Car insurance is inherently tricky to navigate because you don’t find out just how well it works (or doesn’t) until you have an accident. And if you’re lucky, that doesn’t happen too often. So how do you know if you have the right kind of car insurance for your budget and lifestyle?

U.S. News interviewed a handful of car insurance experts to find out what you should do before making a final decision on your policy in order to get a good deal and decrease the chance of being surprised by unexpected costs after an incident. Here’s their best advice:

When choosing a policy, start by asking friends for recommendations. “It always makes sense to first ask people who you respect who they have auto insurance with, and if they were happy when they had a claim,” says Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry group.

[See: 10 Unexpected Costs of Driving.]

Strangers can also offer useful advice. People often take their complaints about car insurance to social media, blogs and other websites. Search for posts on Twitter using the hashtag for the company you are considering. The National Association of Insurance Commissioners and the Center for Insurance Policy and Research makes it easy to find formal complaints that have been lodged against companies as well.

State buyer’s guides are another resource. States release detailed guides for purchasing auto insurance that explain the ins and out of property damage as well as collision and comprehensive coverage. “Get the buyer’s guide – don’t just go to some agent,” recommends Bob Hunter, director of insurance at the Consumer Federation of America. Those buyer’s guides also outline the minimum required coverage and what factors influence your insurance rates, from driving records to how you use the vehicle.

When comparing policy prices, be sure to compare similar policies, cautions Phil Reed, senior consumer advice editor at Edmunds.com. Auto policies vary by length of time, level of service and an array of add-ons, he says. Instead of just searching the Internet to compare quotes, Reed recommends getting on the phone with companies and asking questions, too. Certain car safety features, such as alarm systems or anti-lock breaks, can help lower your rate.

[Read: Blue-Collar Workers Pay More for Car Insurance.]

At the same time, there’s no need to obsess about constantly chasing a better deal. Jeff Blyskal, senior writer at Consumer Reports, says when the magazine asked readers to try to get a better deal with a competing insurance provider, only 12 percent of respondents were able to do so. That’s despite the slew of auto insurance advertisements that would have you think a better deal is always just around the corner.

Once you’ve settled on an insurance provider, you’ll have the chance to consider various add-ons to your policy. In general, the more you pay upfront, the greater the coverage you’ll have. For example, you can opt for a higher deductible in order to minimize your rates – probably a good move for anyone who considers themselves a careful driver and can afford the higher deductible in the event of an accident.

You might also want to consider rental coverage. Auto insurance policies often allow you to add on coverage for renting a vehicle while your car is getting fixed after an accident, and if you only have one car, that kind of coverage can pay off. “Every customer who didn’t have rental coverage wished they had it,” says Richard Arca, senior manager of pricing at Edmunds.com and a former insurance adjuster. It typically adds about $20 for six months to a policy, he says.

On new and leased cars, GAP insurance can also make sense. You’ve might have heard that when you buy a new car, it loses value as soon as you drive it out of the lot. Leased vehicles also often carry a lower fair market value than what you owe on the vehicle. That means in either of those cases, if you total the car, the insurance company will only reimburse you for the car’s fair market value – and you could be out a lot of cash. GAP coverage, which stands for “guaranteed auto protection,” safeguards people from that problem. “It’s highly recommended for people who lease vehicles,” Arca says.

How To Tell if Your Body Shop Did the Job Correctly

When you last saw your car, it was a twisted mess being towed away from the scene of the accident. Now it’s weeks later and the car is parked in the driveway of a body shop. All you have to do is write a check and the car is yours again. But how do you know that everything under the surface has really been fixed correctly?

One key to getting your car fixed right is choosing a reliable shop in the first place. But you should still inspect the work performed before you drive away. To better understand what to look for, here are some insider tips from several knowledgeable veterans of the body shop business.

Have a Clear Understanding Up Front
The process of having your car fixed right starts when you drop it off, says Aaron Schulenburg, executive director of the Society of Collision Repair Specialists. Be clear on what the shop is going to fix and how it will do the repair. Get everything in writing. Ask about the shop’s warranty on its work. When you return, review the paperwork to confirm that the shop did the repairs correctly.

“A reputable repair facility will go through everything with you, walk you through all the steps they took,” Schulenburg says. “Good shops will even touch up bolts under the hood that have been scratched while being repaired.”

Clean Car Is a Must
Appearances matter. When you pick up your car, it should have been washed, cleaned and vacuumed, says John Mallette, owner of Burke Auto Body and Paint, in Long Beach, California. There should be no dirt or dust in the car and definitely no old parts in the trunk. Mallette says he even tries to wash down the engine compartment before he hands over the keys.

It can be a challenge to return a clean car to a customer, says Mike O’Connell, owner of Golden Hammer Auto Body in Los Angeles. With all the dust from sanding, he says, “body shops are the dirtiest places on earth.” He says his workers take precautions to keep the cars clean by using paper and masking tape to protect different areas. And then they carefully wash the car before the customer comes to pick it up.

Closer Inspection
If the car’s general appearance passes muster, take a close look at the area that was repaired. Mallette recommends looking for gaps between body panels first. If the gaps are obviously uneven, that’s a telltale sign of panels not being aligned correctly. Schulenburg says owners should make sure the doors open and close properly with good alignment.

If there was extensive front-end damage to the car, it can be difficult for a body shop to repair perfectly, Mallette says. One way to spot a problem is to look at the distance between the tire and fender. If it is wide on one side and narrow on the other, something wasn’t fixed properly. Another test is to turn on the headlights to ensure that the light beams are aligned.

When a car is hit in the front, the frame may have been bent and required straightening on what the body shop calls “the rack.” The shop workers use it to pull the frame rails until the frame is straight. Mallette says he can look under a car and see “butcher marks” from poor repair jobs.

But visual inspections might be difficult for the average consumer, Schulenburg explains. He says owners should take a look at the automated printout of the frame specifications. A good body shop will measure the damaged area of the car and then measure the frame again after it does the repair. The frame specs should be the same post-repair as they were before the accident. The frame spec printout is a good reference document to make sure the job has been done right.

If you are concerned that a major repair wasn’t done correctly and want someone other than the original body shop to size it up, you can get a second opinion. O’Connell tells us that many people bring cars to him for just this kind of assessment, and he can immediately spot problems that the ordinary consumer can’t.

Paint Jobs: Matching Colors and Consistency
One of the most challenging jobs in a body shop is paint matching. “Punching in the factory paint codes gets you 95 percent of the way to matching the color,” O’Connell says. But the remaining 5 percent has to be done by people who really know what they’re doing. “If we didn’t do this extra step there would always be a little variance,” he explains. “That’s why you see cars on the road that look like they are three different colors.”

Most factory paint jobs have an “orange peel” texture to the finish to a greater or lesser degree. Whether you like that effect or not, most factory paint jobs have this texture, and it can be tricky for body shops to duplicate. Mallette advises that you arrange to pick up a car from the body shop during the day. If possible, look at the car in the sunlight to make sure that the new paint matches the car’s original shade and finish. Also, if the shop repainted several panels, sight along the side of the car to look for color consistency. And finally, examine the paint for runs or imperfections such as hair or specks of dirt trapped in the finish.

When It Isn’t Fixed Right
In some cases, a problem with the repair develops months later. A common scenario is that you notice the car’s front tires are wearing unevenly. This could be a sign that the front suspension hasn’t been straightened and repaired correctly. Find your paperwork and receipt, bring the car back and show the manager the tire’s wear pattern. The shop should fix the problem under the warranty, Mallette says.

Schulenburg agrees that improper tire wear on a car is a bad sign. “Take it back to the body shop,” he says. “There are a whole lot of things that can lead to tire wear. Let them assess what is causing it.”

Many body shops are “fly-by-night,” O’Connell notes, and if you’re dealing with one of them, it can be tough to get satisfaction if the job wasn’t done right. A legitimate shop should stand by its work. He recommends that you make sure you are within the warranty period, which is usually one year or 12,000 miles. Then, with your paperwork in hand, ask to speak with an owner or manager.

“And be courteous, not demanding,” O’Connell says. “If you start making accusations, things can go downhill fast.”

5 Tips for Choosing the Right Auto Body Shop

It’s not uncommon for estimates from different body shops to vary wildly. One shop might give you an estimate for $500 while another wants $2,000 for the work. What’s the difference? And when is it OK to choose the cheaper shop?

John Mallette, owner of Burke Auto Body & Paint, in Long Beach, California, knows better than most people how to choose a reliable shop. Mallette started working on cars when he was 12 years old and has been in the body shop business for 24 years. Here are some of his tips for choosing the right shop to work on your car — particularly when you’re the one paying the bills.

1) Pay Attention to Word-of-Mouth
Any business can advertise, but you’ll do better with a shop that friends, family or acquaintances recommend. It’s a business that has proven it can satisfy customers. And it might not be the biggest or best-known shop in your area.

Mallette went to a shop years ago on such recommendations and found that the owner was a “real stand-up guy…. He doesn’t advertise on the Internet; it’s a family-owned shop,” Mallette says. “But, golly, if you take your car there, you’ll get a fair price.”

In some cases, you might get a recommendation for a small shop where the owner works on the cars himself. “That’s how I like doing business,” Mallette says. “To me it seems so much more personal and then you can understand what’s really going on with your car.”

2) Consider the Operation’s Location and Overhead
“Where you get screwed in our business is labor hours,” Mallette explains. His shop charges $40 per hour for labor. But in ritzy parts of West Los Angeles, the per-hour labor charge is $60-$65. In wealthy Newport Beach, California, Mallette has heard of $90-per-hour labor charges.

Large body shops with a lot of front-office workers probably have to charge higher rates to pay their staff. While service delivered by front-desk folks, managers and foremen gives some people a feeling of confidence in the business, it can result in estimates that are padded with non-essential work. When they’re charging more labor hours at a higher rate, your bill can add up quickly.

In his shop, Mallette says he does things by the book — literally. Body shops and garages use reference guides that estimate the number of hours required to perform common repairs.

“Let’s say somebody has damage to their fender, bumper and headlight,” Mallette tells us. “I go to my book, I write an estimate and I basically go by the hours mandated by the book.”

By contrast, the higher-end shops might decide to charge for everything in “the gray area,” meaning those things that they might have to do to fix the problem. In Mallette’s example, high-end estimates might include a charge for time spent removing the hood and the door, while his judgment call is not to perform this additional work.

3) Get Several Estimates
Taking your car to several auto body shops for repair quotes is the best way to avoid overcharges, Mallette notes. “I’ll tell people to go get some estimates and bring ’em back to me. I’ll match estimates if I can.”

And while it’s important to protect against being overcharged, you shouldn’t simply take the lowest quote. “You might get some kind of midnight guy who will say he can do it really cheap,” he says. “Stay away from those guys, because there is something they’re not doing. You could have major problems down the road.”

4) Ask the Right Questions
When choosing a body shop, “you don’t go in with your pocketbook open,” Mallette explains. “You go in smart,” and ask some key questions. Does the shop provide a written warranty? And if so, for how long? What does the warranty cover?

A one-year warranty is a minimum, Mallette says. His shop offers a two-year warranty for body work and a three-year warranty for complete paint jobs. Some shops offer lifetime warranties as a selling point, but that isn’t realistic, he says.

“Most of the stipulations and conditions those warranties require are more restrictive than the majority of people can adhere to,” he says. “So basically, the warranty becomes useless.”

Another key question is whether the shop carries fire and theft insurance. You want to be sure you’re covered if your car is destroyed, stolen or burglarized. Don’t forget to ask how long the shop has been in business. Make sure it has a business license.

You will also want to know about the materials the shop intends to use. Are new, used or aftermarket body parts going to be used? New parts are obviously the best and used parts are fine, though they don’t offer the savings people imagine. Depending on the damage to your vehicle, aftermarket parts can save a lot of money and can be just as good as the ones that come from the original manufacturer. If paint work is involved, ask how many coats of paint and clear coat the shop intends to use.

5) Follow Your Intuition
Finally, it’s important to trust your intuition about the shop you’re considering. If a shop isn’t busy, maybe that’s because customers are avoiding it because of shoddy repairs. If the place is really dirty, cluttered or disorganized, this might reflect the kind of work you could expect the shop to do with your car. Is the shop owner or manager a grouch who seems to resent answering your questions? You’ll be happier with a shop where the owner communicates well and is straightforward with customers.

“Trust your gut,” Mallette says. “If your gut tells you the guy’s shady I wouldn’t even go there.”