Car | Well Heeled Blog

Talk Me Out of Getting More Car Than I Need

Written by WellHeeled on May 16, 2013 · 31 Comments

One of the best piece of advice for would-be car buyers is: do not buy more car than you need. Auto costs are a big part of many Americans’ budget, and if you purchase a car you can’t afford, you can drive yourself into the poorhouse (har har har, pun intended!) I thought I was pretty practical in that regard, but I can feel my heartstrings tugging me to something that’s just a wee bit outside of my budget.

After two days of car-shopping that resulted in no car purchased, CB and I are gearing up for more dealership visits this weekend. We are going back to a Honda dealership to test drive the 2013 Honda Civic sedan again, but I’ve been eyeing the 2013 Honda CR-V as well.

Guys, I need you to talk me OUT of the Honda CR-V.

Why Civic?

According to my research, the Civic sedan in the LX trim will probably cost me $19,500-$19,800 out the door. The CR-V, however, will cost in the neighborhood of $25,000 out the door. We’ve crunched the numbers – and CB and I have enough money in the bank to pay for the Civic in cash or to finance only $2,000-$3,000.
The Civic has a better gas mileage than the CR-V due to its smaller engine and lighter weight. That will really come in handy if I have to drive frequently and the gas prices go up.
The extra $5,000 for the CR-V could be pulled out of the money I’ve set aside for tuition next year, but that means I’ll have to take out student loans. There is also the option of an interest-free loan from my parents, although I’d prefer not to go that route.

Why (not) CR-V?

I’ve always loved CR-V (it’s the perfect size!), but have thought it’s too much car for what I need. We are not planning on adding kids and we don’t go camping… ever… so there is no need for the additional passenger room or the cargo space of a crossover/mini-SUV.
CB’s car is a 1995 Civic and is over 150,000 miles, so he may have to replace it in a few years. At that point, hopefully we’ll be in a stronger financial position and be able to buy a CR-V or a similar car with cash.
More expensive car = lower gas mileage and possibly more expensive to insure.
The only reason I’d buy the CR-V now would be for 1. comfort (I like to be able to sit up higher in a car), and 2. safety in crashes against bigger cars. The Civic is a top safety pick, but it’s still a compact. The laws of physics are not kind to small cars in small vs. big matchups.

Have you purchased more car than you needed? Talk me out of the CR-V!

My Tips to Having a Good Test Drive at Car Dealerships

Written by WellHeeled on May 13, 2013 · 13 Comments

This past weekend, aside from a lovely Mother’s Day dim sum trip with my parents, comprised of hopping from one car dealership to another, test-driving cars.

So far, CB and I have driven the following:

Honda Fit
Nissan Versa
Fiat 500
Honda Civic
Mazda3
Ford Fusion
Honda Accord

Here are some tips I’ve realized are great for a smooth test-drive process:

Go on a full stomach or bring a snack bar and plenty of water. Test-driving was a pretty tiring process for me, and we had to take a break to get lunch. If I had some snacks with me, it would’ve been easy to power through and get it down in one-go.
Go to the dealership closest to your house for casual test-driving. Seriously, there is no need to traipse all over the county for specific dealerships until you are ready to buy.
Have your driver’s license ready so the dealership can make a copy of it – they will need to do this before you test-drive. Remember to get your license back after the test drive (I know a few folks who have forgotten their licenses at the dealership).
Drive for a little bit with the windows up but without air conditioning on to get a sense of the road noise.
Adjust the seat and the steering wheel to your liking before setting off on a test drive. If you don’t know how to adjust, ask the dealer to help you. I didn’t do this for the Civic and felt really uncomfortable during the whole drive. Now we are planning on going back and doing another test-drive with the seats properly adjusted – this step would have been avoided if I had just remembered to ask!
Sit in the back seat and the shotgun seat to see how you like it.
Take note of the salesman’s customer service and how comfortable you feel – when you are ready to buy, customer service, along with price, will help you decide who should earn your business.

After the test drives, I ruled out the small cars – the Fit, Versa, and Fiat 500 – because I wanted just a little bit more room. The Civic was great on paper, but I felt a little underwhelmed on the first test drive. The Mazda3 was the most fun to drive but I can see the Civic being more comfortable for me on longer trips. The Fusion and the Accord were awesome cars, but probably too big and too expensive for my purposes.

Have you test driven any cars lately? What tips would you add?

Mega commutes: painful but (somewhat) avoidable?

Written by WellHeeled on March 25, 2013 · 32 Comments

Studies have long shown that a long commute is one of the most stressful experiences in a workers’ day. The unpredictability, the lack of control over the situation…it all contributes to deep unhappiness and/or severe road-rage that extreme commuters have all faced at one time or another. Slate just came out with an interactive graph that calculates average commute times by zip-code.

My most recent location is a mere 18 minutes in average commute time. My previous locations all clocked 20-30 minutes in average commute time, but I know from experience that I was – unfortunately – definitely above average in this aspect.

My longest commute was at my last job, where I drove 65 miles (more than 30 miles each way) to work every day. It was one of the most painful aspects of my job, as the commute would stretch from 40 minutes on a “good” traffic day to a mind-numbing hour-plus on a day with a few accidents or weather issues. Eventually I started working from home on Fridays, but the Monday to Thursday commute still took 7-8 hours of my life. (I couldn’t move closer to the office, because CB’s work was all the way at the other end of the county, and he had a 70 mile round-trip commute.)

Some commute, sometimes, is unavoidable, but I am hoping that I can structure my life to avoid the mega-commutes. At my next job, I hope to be able to live within a 15-20 minute drive of the office, maybe even closer. I do not know what kind of opportunity could make me a “megacommuter,” or someone who drives 90 minutes to work on a regular basis, but even if it’s an opportunity I can’t turn down, I would rather move than make a drive like that. A long commute is not just about the money you’d spend on transportation/increased housing prices, it’s about your quality of life.

What is the average commute time in your zip code? Is your own commute longer or shorter than that?

I NEED a Car… Now, New or Used?

Written by WellHeeled on July 30, 2012 · 66 Comments

When I first moved to School City, my intention was to NOT buy a car. I even canceled my auto insurance and AAA membership.

Now that I’ve been settling in for a week or so, I’ve realized that while going car-free is technically feasible, it’s not very fun. Or even practical. I don’t think there’s a problem going from home to school, but it’s all the other things (groceries, movies, dance classes, visiting nearby cities on the weekends) that are a big PITA. So even though I feel like a bit of a wimp – given how excited I was about the prospect of leading a car-free lifestyle – a car has jumped from “Nice to Have” into the “Need to Have” category. On a scale of 1 to 10, having a car is pretty much a 8.5 or higher in my area. Oh defeat, thy name rolls bitterly off my lips.

To buy new or used car?

I have around $18,000 to get a car out-the-door. This will obviously impact my graduate school cashflow, namely, I’d be out $18,000 that I can use to pay tuition. My monthly expenses would also rise thanks to insurance costs, AAA membership, etc.
Reliability is one of the most important criteria to me, as someone who is, ah, not very well acquaintedwith the inner workings of an automobile.
Cars I’m considering are: Honda Fit, Hyundai Elantra, Toyota Corolla, Toyota Matrix

So I’m leaning towards a new car, specifically a new Honda Fit. It’s reliable, I love the hatchback, and $18,000 will just about cover an automatic base model. Two years ago, I contemplated buying a new car vs. keeping my old Honda, and decided to stick with the Ol’ Faithful. Now, the equation has turned to buying a new car or buying a used car.

While I can get a used car for much cheaper, I’m hesitant. My family has had a stellar experience with Hondas (our cars were a 1993 Honda Civic – still running, a 1996 Honda Accord – 250,000 miles and going strong, and a 2006 Honda Pilot), and so I’d like to stick with that brand if possible. Used Hondas with lower mileage (say, fewer than 100,000 miles) are very expensive, so I wouldn’t be saving much on depreciation. And if I keep my Honda for 10 years or 250,000 miles, the depreciation hit of a new car wouldn’t be much higher…

What do you think? New car, used car, Honda Fit, something else?

Living Without A Car: Am I Crazy?

Written by WellHeeled on June 18, 2012 · 44 Comments

Living in Southern California and having a 35-mile commute means that I drive. A lot. So one of the things I am most looking forward to graduate school is to living close to campus and trying out the car-free lifestyle for a couple of years.

Until I got into the awesome school I am attending and I realized that not that many people go car-free.

There are rumors of cars bumping up against bicylists on purpose. The vast majority of folks who do go without cars are international students. And even though I only live 2.5 miles from school, the road from my apartment to the school doesn’t seem the most pedestrian-friendly: the street isn’t well-lit, Google Maps show missing chunks of sidewalk, etc. I still want to live without a car. Am I crazy?

Financial reasons to live without a car

My car is creeping up on the 260,000 mile mark, so there is no way it can survive the trip from California to the East Coast. I’m not the most handy around cars, so I want something reliable, which means an expensive used car or a brand new vehicle.
I have enough to buy a car with cash, but the more cash I can conserve, the fewer student loans I’d have to take out.
Even though not having a car would mean that I’d have to get more rides from friends (chip in for gas), pay for car-sharing, and take the bus more often, it’s still going to be much cheaper than buying a car. My school offers a free bus pass to students and not having a car means that I don’t have to pay for parking, repairs, insurance, etc. Also, no car = no risk of traffic tickets! That’s the way to live like a student.

Lifestyle reasons to go car-free

I’ve spent my entire adult life driving. I enjoy it and the freedom it brings me (especially on the days without traffic… which in SoCal doesn’t come that often!), but I am ready to try not having a car for once.
I have no idea where I will be after graduation, so I would like to defer the car decision until I know that for sure.
Living without a car is the BEST way to ensure I get some form of consistent exercise (i.e. walking or biking). 2.5 miles is a long way – would take me 45-50 minutes each way – but it’s walkable. At night, I can catch a ride with friends – I will live within 0.5 miles of most of my classmates.
I can also take a bus, and that would be a 30 minute trip including walking to and from the bus stop.

The pros of a having a car would be many, with convenience first and foremost among them. The pros of not having a car are also there, but I would definitely have to make adjustments in how I live my life.

What do you think? Should I try out this crazy thing called “car-free living?”

Dear Old Car: 250,000+ Miles and Going Strong

Written by WellHeeled on December 8, 2011 · 23 Comments

The picture says it all, no? In case you can’t tell, I am driving an old car with flaming Sweet Sixteen candles on top of it, crossing over the 250,000 miles banner. The car is also disproportionally big compared to the driver.

My 1996 Honda Accord sedan is running strong, running long after sixteen YEARS and 250,859 MILES. When my dad passed down his car to me when I left college, it was already 10+ years old. Now that it crossed over the quarter-million mark, it’s still doing well with no immediate problems. Can you believe it?

Here’s what I wrote in ode to old cars post back in 2009:

1. An Old Car is most likely to paid off. Which means… no car payment, which means… more money in your pocket. Of course, repairs can cost higher than a new car’s, but in many cases the math still works out in the Old Car’s favor. Even with periodic repairs to the tune of $1,000-$1,500 a year, my Old Car is still cheaper than a New Car would be.

2. Cheaper insurance. Old Cars are cheaper to insure (and you might not need comprehensive or collision insurance for an old car). Added up over the course of 5 years, you can save hundreds or thousands of dollars on insurance if you drive an Old Car instead of a New Car.

3. Less worry of damages. A bump on an 1997 Toyota Camry adds character (or so I’d like to believe), a scratch on a 2009 BMW 335i is a glaring blemish. I have little scratches on my car that I don’t worry about fixing. I don’t want my car to be scratched, of course, but if it happens it won’t break my heart. If I were driving a brand-new car, however, that would be a different story.

4. At this point, it’s become something of a “let’s see how many miles I can put on this car” game. I had one mechanic tell me he has a Honda that topped 400,000 miles. While I don’t know if my car can get that far, I’m hopeful that my car have a few more years in it.

I feel the same way today. I love my car so much. It is a faithful buddy that asks very little: regular oil changes, repairs when needed, and a wash now and then. And it has given me so much in return: ability to get around, freedom from monthly car payments, a reliable and comfortable ride, and 29-30 miles per gallon gas mileage. I would have never been able to save as much as I am for retirement or travel to all those places if I were not gifted with a car. For that, I am grateful. To the car (and my dad)!

How do you keep your car running to the quarter-million mark? According to an MSN Money column, the average car is about 13 years and has 145,000 miles when it’s scrapped. So if you can drive your car to 250,000 miles, your car will have given you 100,000+ more miles than an average ride. The column goes on to give you several tips to make the car lasts longer. I’d say that for me, it’s part luck and part maintenance. Regular oil checks (I do mine at 3,000 miles no matter what anyone says!), a trusted mechanic, and a solid build has helped my car go and go. The lack of serious accidents obviously is a factor as well. Can’t drive a car to 250K miles if it gets totaled earlier.

Do you think your car will make it to 250,000 miles and/or sweet sixteen mark? What’s the make, model, and year?

My First Car Accident

Written by WellHeeled on October 5, 2011 · 14 Comments

For the first time since I’ve gotten my license in 2003, I got into a car accident. Worse of all, I was at fault. Chalk it up to a case of stop-and-go traffic, a sudden braking by the cars in front of me, and my look down to change the radio station to country music… and I bumped into the Honda in front of me.

That was a real bummer. Fortunately, as far as accidents go, it was the best kind of accident to have.

I wasn’t hurt, and the driver in the other car wasn’t hurt.
He also drove an older Honda (i.e., no expensive import cars that cost $8,000 for a dent in the bumper).
The damage, at least to my eyes, was minor. There was a dent in the shape of one of the screws that held up my license plate.
My car was completely fine. Not a scratch (and as long as there was no structural damage, I wouldn’t have cared so much about scratches).
He was calm and reasonable when we exchanged information.
A few hours later, he left a message and said he wouldn’t be pursuing the claim.

I called my insurance and reported the accident as required, and apparently, if the other driver really doesn’t pursue a claim, my insurance premiums won’t increase. I am sad, though, that my previously blemish-free record is now one accident deep. In the state of California, an accident will stay on the record for 3 years and adds 1 point. If a driver gets too many points, he/she can be revoked of license. Aside from the immediate financial consequences of an accident – paying for repairs / damages – an accident also has long-term effect on car insurance rates.

Let that be a lesson to all out there… KEEP YOUR DISTANCE from the cars in front. I really wish I would have given myself more room. Eight years of a perfect driving record down the drain! It didn’t feel like I was tailing the car, but traffic can crunch up faster than you realize, and it’s better to be safe than sorry.

Do you remember your first car accident? What was the lesson you learned?

Red Light Camera Tickets: Don’t Pay if You are in LA

Written by WellHeeled on July 26, 2011 · 10 Comments

Want to really get drivers worked up? Just ask them about expensive tickets issued as a result of those ubiquotous cameras above traffic lights. THEN tell them that they didn’t actually have to pay the fine. Apparently, red light camera tickets, are really just… voluntary.

According to a Los Angeles Times article:

City officials this week spotlighted a surprising revelation involving red-light camera tickets: Authorities cannot force violators who simply don’t respond to pay them. For a variety of reasons, including the way the law was written, Los Angeles officials say the fines for ticketed motorists are essentially “voluntary” and there are virtually no tangible consequences for those who refuse to pay.

The disclosure comes as the city is considering whether to drop the controversial photo enforcement program, with the City Council scheduled to vote on the matter Wednesday.

I have never gotten a red light camera ticket before, although I did have a very big scare back in 2009. I understand that these cameras can provide a useful deterrent to dangerous driving, but most of the times they seem to be a way to wring extra money out of citizens who makes a quick right hand turn or something of that ilk. With the latest turn of events, however, if you get a red light citation… you’ll know what to do with it!

Carmageddon 2011

Written by WellHeeled on July 16, 2011 · 5 Comments

If you live in Southern California (or maybe if you even live outside of the area), you probably have heard about Carmageddon – a heavily trafficked stretch of the I-405 will be closed between the I-10 and I-101 for this weekend. The I-405 is the basic artery of north-south traffic on in West Los Angeles, so if you live in that part of town, stay put!

SoCal is such a car-based culture, really, if you don’t have a car here, you don’t have any way of getting around.

Giving Friend Money For Car Accident

Written by WellHeeled on May 10, 2011 · 16 Comments

This weekend I spent some wonderful time with a very good girl friend whom I haven’t seen since 2009. We had a blast eating, sight-seeing, eating, and eating some more. Through a series of unfortunate events, however, my friend’s car got damaged and she had to spend over $300 for a tow and two brand new tires.

Needlessly to say, I feel horrible about what happened. Although the car accident wasn’t my fault, my friend wouldn’t have been in that situation to damage her car had she not been doing me a favor. I offered to give her some money, but she declined. So, I am trying to think of what I can do to both say (1) thank you for hosting me that weekend and (2) I’m sorry about her car accident. Since my friend loves Sephora (like me!), I may send her a $50 Sephora gift card.

She won’t be expecting anything, she doesn’t blame me for what happened, and she took the whole thing in stride very calmly – much more calmly than I would had I been in her shoes! Still, I feel a little responsible for her car damage. Plus, she’s such a great, great friend that I just feel bad if I don’t do anything.

What do you think? What would you do in my situation? Do you think $50 is enough?

There’s a New Car Waiting For Me (If I Just Stop Being So Stubborn)

Written by WellHeeled on February 3, 2011 · Leave a Comment

There’s a new car smell in the blogosphere.

A few days ago, my mother raised the topic of a new car. She is worried about the long distance I drive and the mileage I already have on my car. She offered to put a down payment on my current car, and then I can buy a new car and she will take over my old car.

It was a very heart-warming gesture (she’s worried about my safety! Plus, she probably knows how cheap I am determined I am to drive my car to the 300K mile mark or at least until I go to graduate school). I told her I’d think about it (and have thought about it before), but really, I am crossing my fingers that my oldie but goodie Honda will continue traipsing over 60 miles of the concrete jungle a day until it’s time for me to pack up and head for my next destination.

Still, wouldn’t it be fun to hop into a zippy Honda Fit? CB loves the Honda Fits, but since he’s heading to school in a few years as well, it just doesn’t make sense for either of us to buy new cars. (Plus, not having a car payment is great).

The High Cost of Free Parking

Written by WellHeeled on August 16, 2010 · 17 Comments

Do you have a car? Do you pay under $100 a month to park your car? If so, chances are you are enjoying an effective subsidy. And by “you,” I am also talking about me. I have never thought much about the cost of parking (except when I had to valet my car in trendy parts of town). In fact, I have come to expect free parking as the norm, or heavily subsidized parking at public garages / meters for $1 or $2 per hour.

Why free parking exacts a heavy cost

New York Times’ Tyler Cowen argues that free parking exact a heavy environmental and financial cost: motorists are more likely to drive when they don’t have to shoulder the true cost of parking, cash-strapped cities and states cannot charge enough to increase their revenue, and perhaps most importantly, we do not feel the sense of urgency in developing adequate public transportation systems as we would if we had to pay the true cost of automobile usage.

According to this article,

Under a more sensible policy, a parking space that is currently free could cost at least $100 a month — and maybe much more — in many American cities and suburbs. At the bottom end of that estimate, if a commuter drives to work 20 days a month, current parking policy offers a subsidy of $5 a day — which is more than the gas and wear-and-tear costs of many round-trip commutes. In essence, the parking subsidy outweighs many of the other costs of driving, including the gasoline tax.

Gulp. This article hits home for me because ever since I started my job 30 miles away, I have been a heavy user of my car and of my office’s parking space. In fact, one of the reasons we chose our current apartment is that the complex offered two parking spots for our unit.

Somewhat selfishly, I am glad that I benefit from free and heavily subsidized parking I receive on the streets near my apartment, at work, and at restaurants and cafes. There is truly no good alternatives for a car where I live right now. Although I live close enough to a subway station that I thought taking the metro might be a possibility, the nearest drop off point from my work is more than 15 miles away.

What if free parking went away?

If I had to pay $100 a month to park my car at home and another $100 to park at work, I will have to cough up the cash and keep on driving. If CB had to pay $100 a month to park his car, though, he might be in a position to rethink having a car – it is possible to get from our home to his work on the subway for around $250 a month. That amount is currently more than what he is paying for his car in gas – add in the convenience of the car (especially on the weekends), it’s not worth it for him to pay an additional $250 a month to take the subway. If, however, he would have to pay, say, $200 extra a month to park at home and at work, then the incentives obviously shift more in favor of using public transportation for commute.

In many large cities such as New York, Boston, San Francisco, and even in Los Angeles, it is possible to go without a car if you live right in the center of town near public transportation and you don’t work in the suburbs. Unfortunately, that’s not the case for most of us.

Do you benefit from free parking? If you had to pay $100 per month for a parking spot, how would you change (or not change) your behavior?

Modern Necessities: But I Need It!

Written by WellHeeled on July 15, 2010 · 22 Comments

In life, there are luxuries then there are necessities. The true necessities are a certain level of food of appropriate nutritional value, health care, clothing, and shelter. But in a middle-class existence in a developed country, what we deem as “necessary” has a much broader scope than basic subsistence.

Here are several modern conveniences that have become necessities for my life:

High-speed internet access ($20 per month): What would I do without reliable and speedy internet access? I don’t know. The internet isn’t set up at my current apartment yet, and it’s frustrating. That’s why high-speed internet is a nonnegotiable line item in my budget. I think there is a case to be made for internet access as a necessity as much as telephone is – communicating with family and friends, researching information, doing work from home, blogging all require access to the almighty information highway. I would also consider a personal computer a necessity.
Cell phone @ free because on family plan: Given that my cell phone is my only phone, it’s definitely a necessity. Even if I had a land line, I wouldn’t feel comfortable venturing out without the cell phone on me. It’s funny how dependent I’ve come to be – I keep imaging what if I miss a really important call? Or what if I’m in a situation and I need help?
AAA membership @ $50 a year: I just feel better to know there is one number I can call for help if my car breaks down. And with a car as old as mine, breaking down is a possibility that I can’t discount. For $50 a year, I get the peace of mind (and towing, and battery jumps) that AAA provides.
Car and all related items (insurance, gas, maintenance) @ $400 a month: Maybe if I lived in another part of the country, I wouldn’t count a car as a necessity. But I live in Car Country, and I can’t go anywhere without a car. Public transportation is slow and unreliable, or too far away, or nonexistent. So I take good car of my Honda and hope it continues to take good car of me.

How about you? What do you look at in your budget and say, “but I need it!”

Buy New Car vs. Keep Old Car

Written by WellHeeled on July 11, 2010 · 35 Comments

Possible new car purchase?

When it comes to the buy new car vs. keep old car dilemma, the financially prudent answer seems to always lean towards the latter. Of course, a new car is a significant drain on one’s monthly cash flow, but when is the right time to finally buy a new car? I have never considered buying a new car quite as seriously as I am doing right now. This past Independence Day, I spent $350 on rest and pampering… for my car! (some recent repairs include: $120 in December 2009, $350 in May 2009, and $400 in November 2008).

The cost and headache of spending a holiday weekend on car-related issues has made me wonder: should I buy a new car? Has the time come to finally let go of my beloved Honda (who has served my Dad, then me, faithfully for 230,000 miles, and counting) and get something with side-impact air bags and a CD player?

Recently, my parents also suggested that I should buy a new car, mostly for safety reasons. I demurred, although driving 60 miles a day has made me somewhat more inclined to consider a new, more comfortable ride with updated safety features. CB raised a good point – given that my car is so old (even though it’s still in very good condition for its age / mileage, knock on wood), I should do some research into the type and cost of car I want.

Estimated Cost of New Honda

My family has had pretty good luck with Hondas, so I pulled up the numbers on Edmunds’ Auto Loan Calculator to see how much a Honda Civic DX would cost.

Even with a $10,000 down payment on a 36-month loan, and at a very favorable 5.0% interest rate, I would be paying $234 a month in car payment.

New car vs. Old car in dollars

Keep Current Car: the cost of driving and maintaining my car total $400 a month, or $13.11 per day.

$150 – gas
$90-$100 for liability only
$150 – repairs / monthly contribution to Repair Fund

Buy New Car: if I were to buy a new car, my repair expenses would decrease, but my other car-related expenses would increase.

$150 – gas, maybe somewhat lower because of more efficient gas mileage? my current car gets around 29 miles per hour. I’m not sure what new Honda would get.
$234 – monthly payment (according to Edmunds calculator)
$130? – car insurance would go up because I’d be insuring a new car and I’d need comprehensive / collision coverage
no out-of-pocket repair costs for the first 3 years (or so I’d hope)
I would also be out the $10,000 for down payment

Safety concerns?

It seems that keeping my old car would be in my best financial interest. However, am I compromising my personal safety by not purchasing a new car? As cars get older, their safety features becomes outdated. Even though my Honda is rated very well for its year in terms of safety, and it has never been in a major car accident (again, knock on wood), a new model would of course have more up-to-date safety features. If I somehow end up in a match with a Hummer on the freeway (knock on wood, again, that that never happens), I will very much like to have side-impact air bags and new 2010 construction.

So, questions for readers: How did you decide to keep your old car or buy a new car? How did you reconcile the safety concerns with financial concerns when it comes to possibly buying a new car? If you were me, would you buy a new car?

Joint Car Insurance Policy Between Unmarried Couples

Written by WellHeeled on July 8, 2010 · 16 Comments

CB and I discussed the possibility of us combining our car insurance policies once we move in together. As it does with many unmarried couples, it took us some time and research (and discussions) to decide how we wanted to proceed. I actually couldn’t find too much information on joint car policy for unmarried couples, so I thought I’d share what I’ve learned from my insurance agent and other research here. Disclaimer: I am not an insurance or legal professional, and everything I write here is what I’ve been told / researched on my own. I make no guarantees as to the information’s accuracy or completeness.

Some insurance companies will allow unmarried couples to be on a joint car insurance policy. Some won’t. For example, in California, Progressive permits unmarried couples to go on the same policy, whereas All State does not (I don’t know if domestic partners can have a joint policy with a company that does not allow unmarried couples a joint policy – but that’s something you should check if you are in a legal domestic partnership).

Married couples will receive more car insurance discount than unmarried couples because they receive a “marriage discount” as well as a “multi-car discount”. I am not sure about the financial impact of legal domestic partnership on car insurance.

In California, the primary holder of the insurance is the Named Insured. The person (or persons) added on to that policy are Second Named Insured. The Named Insured can unilaterally remove Second Named Insureds from the policy without informing or receiving permission from the Second Named Insured. In other states, Second Named Insureds may need to give permission before the Named Insured can take them off the policy. Make sure you understand what the requirements are for your state. It’s easy to imagine a scenario (after an unfriendly breakup, perhaps?) that quickly turns ugly.

Some insurance companies may require that two people living at the same residence to be “rated drivers” on each others’ cars – i.e. that both parties can drive each other’s cars. CB and I decided not to have a joint policy, but because we live at the same address, my insurance company will not cover CB if he drives my vehicle. CB is hence an “excluded driver” on my policy.

If a driver on the insurance is at fault for an accident, the insurance company will pay out the damages up to the limit of the coverage. The victims can sue for amounts beyond what the insurance company paid – they can sue for the assets of the driver, then, if they so choose, they can go after the other insured person on the joint policy. I don’t know how common or successful these suits are usually, but just the possibility of opening myself up to such liability is disconcerting.

The last reason is why CB and I decided not to combine our insurance policy. If he causes an accident or I cause an accident, we wouldn’t want the other person’s assets to be at risk of a lawsuit. We have separate assets, but, well, you just never know. That’s the reason why my parents insisted I get my own car insurance as soon as I graduated college – it was unwise to open their much-more-substantial-than-my assets to the risk of ME being sued.

If we were married, we would take steps to mitigate that risk (probably through the use of a much higher coverage / umbrella coverage). But I don’t want to open ourselves up to the risk of liability (however slight) without a structure in place to mitigate it.

Moving vs. Not Moving: Where I Prize Life Over Money

Written by WellHeeled on April 21, 2010 · 22 Comments

Thank you everyone for your input on the dream apartment vs. shorter commute dilemma … the moving vs. not moving camps are surprisingly equal (or so it seemed to me), with many more people than I would’ve thought encouraging me to give staying in my dream apartment a try. I was also surprised to read that so many people commute 30-40 minutes each way as a matter of fact! I suppose I’ve been lucky as my longest commute before this job was under 10 miles (although that distance would ALSO take me 30 minutes in traffic).

The commute

I’ve been commuting for almost 2 weeks now, spending 1 hour and 10 minutes to 1 hour and 25 minutes round-trip, per day. It’s a lot of wear-and-tear on my old car, and I need to fill up my gas tank about once a week ($30-$35 per tank). This presents difficult choice, especially because moving is the financially prudent thing to do – if I move closer to work, I would probably save $100-$200 total a month (including gas & rent are factored in), and I would have more free time (conservatively speaking, an extra 2.5-3 hours a week).

After looking at some apartments closer to work…

But. After scoping out some potential apartments this weekend, I’ve realized that not only do I love my current apartment, I also truly love the area where I live. I get to work quite early (before 7 am), and I’m back home by 6 pm or 7 pm depending on when I leave and the traffic. So I am home early enough that I can squeeze in trips to the Trader Joe’s, head to a tango class or go on a Pinkberry run. I can still enjoy my neighborhood on the weekdays (although honestly speaking, most nights I stay in). On the weekends, CB and I just enjoy hanging around this neighborhood – catching an occasional burst of ocean breeze.

Bottom-line: I have a (1) reasonably-priced, gorgeous, and spacious apartment, (2) with a caring and responsive landlord who looks out for me, (3) in an area that I enjoy. Talk about a tough deal to give up!

My landlord & landlady must be mind-readers

Tonight, I hit traffic towards the last mile of the freeway – so I got home in 45 minutes instead of the 35 I was used to. I started thinking, well… maybe I should think about moving a bit more. Then what do you know. As soon as I pulled into the driveway, my landlord came over and offered to back my car into the garage (so it’s more convenient for me to pull out in the morning). A few minutes after I stepped into my apartment, my landlady knocked on my door with a plate of home-made chicken taquitos stuffed with juicy shredded chicken breast, freshly diced tomatoes, and caramelized onion. And a dipping sauce. And a side of refried beans. I wanted to take a picture of them, but by the time I thought of it they were all gone.

After I finished this delicious dinner, I thought… how can I leave this place?!

And so, I am making a choice that is not in the best interest of my finances, but that I think will be quite good for my quality of life, even with a long commute factored in. I’ll reevaluate as time goes on, but for now I think I’m staying put.

image source: thepickyapple.com

Dream Apartment vs. Shorter Commute: What Would You Do?

Written by WellHeeled on April 13, 2010 · 71 Comments

Consider this apartment situation:

You are currently living in your dream apartment, with a wonderful landlord. Your rent includes covered parking, laundry, utilities, and wireless internet. You have a beautiful little backyard space to hold your dinner parties. You are paying a very fair market rate for this gem of a place. You never worry about anything to do with the apartment – all repairs are done same-day or in one-day. Basically, you’ve hit the apartment + landlord jackpot.

You receive a great job offer, however, in a city 30 miles away. If there were no traffic, it’d take you 30-35 minutes each way. At a minimum, the round trip commute would be an hour a day. If there were traffic or accidents, it could take over 2 hours, easily. Fortunately, you are going against traffic for most of the way, so your drive is usually very smooth. Still, your car insurance would increase quite significantly because your expected mileage per year would shoot through the roof. Your car will have more wear-and-tear. You will spend more on gas and possibly repairs.

Should you stay in your apartment or move?

You’ve always thought that you’d take a shorter commute, no questions asked. But now you’re not so sure. You can move about 15-20 miles closer to work, where apartments are a little cheaper (a studio can be had for around $800). Added in the utilities, you’ll probably be paying the same amount as you are currently paying or at most $50 cheaper. You cannot find a comparable studio for the same price you’re paying now, if you can find one at all. You will never find a landlord as great as the one you have now.

But if you move, you will have a much more predictable commute (and the peace of mind that comes with it), lower gas prices, lower insurance premiums, and less wear-and-tear on your car. You would love to stay in your current apartment. You would love to have a short commute. You cannot have both.

Dream apartment vs. shorter commute – which would you choose?

image credit: sfgate.com

Annual Mileage Estimate Can Lower Car Insurance Premiums

Written by WellHeeled on January 26, 2010 · 12 Comments

This post has been Consumeristed!

There are many financial issues to consider after you’ve been laid off. Filing for unemployment benefits. Signing up for COBRA or researching health insurance options. Rolling over your 401k. Reviewing the household budget.

I didn’t realize, at the time, that reviewing your auto insurance policy is also a great idea. I’ve been paying around $75 a month for coverage. When renewal time came, I called my insurance carrier to see if there’s any way I can get my premiums lowered without a decrease in coverage levels. Because of my layoff, I did not have daily commute. Even with treks to interviews and job fairs, my new mileage estimate is still far lower than my original figure.

With lower mileage estimates, I decreased my premiums to ~$60 a month and I will be getting a $135 “overpayment” refund from my carrier. I’m only sorry I didn’t do this sooner!

So, the lesson is this: if anything changes in your life that would affect your annual mileage estimate, tell your insurance agent! Some of these changes might be (of course, these changes might also increase your mileage):

Change in job situation (ex: layoff, new job at a closer location)
Change in relationship (ex: if you are in a long-distance relationship but you have now moved in with each other)
Change in living location (ex: you used to live in a rural area but have moved in a city where more nearby amenities)

A reduced annual mileage estimate can very well lower car insurance premiums.