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How Some Students are Paying Less for Car Insurance

Posted on Jun 30, 2014 with 2 comments

Jun 30, 2014

Like it or not, young people usually end up paying more for coverage than more mature drivers. Even so, there are a few perfectly acceptable strategies that young adults can employ to bring down their premiums—especially if they are students. But before we get into the discounts that are available to students, it’s worth taking a look at how insurers calculate risk. Generally, they take the following factors into account:

  • Type of car
  • Marital status 
  • Occupation
  • Driving record
  • Place of residence
  • Credit rating
  • Gender
  • Age

The latter is the most obvious strike against students. Statistics show that young (i.e. inexperienced) drivers are much more likely to be involved in an accident than their more mature counterparts. However, many of the other variables on the list apply as well. For example, students haven’t spent as much time generating a paper trail in their adult lives, and that means that they aren’t going to have, for example, as clear or strong a credit rating or driving record. Likewise, students have yet to establish an occupation or—in most cases—tie the knot.

So why do factors like this matter? For starters, the variables listed above can tell us a lot about how (and how much) you’re going to drive your car. A person who owns a sports car probably bought that car—at least in part—because they intend to do some fast driving. Faster driving equals higher risk, plain and simple. In this case, it’s better to own up to the situation and purchase performance car insurance, which is tailor-made for vehicles like this.

Likewise, policyholders that are married and have children are statistically inclined to drive more carefully. Those that work far from home are going to spend more time on the road on their daily commute; and the more time you spend in traffic, the more likely you are to be involved in an accident—regardless of how careful you are. Got a good credit score? That probably means that you err on the side of responsibility. In such a way, insurers can paint a portrait of us in probabilities without ever having met us.

Of course, it would be wonderful if ever insurer were able to get to know their customers on a personal level. But as that’s not even a remote possibility, we’ll have to settle for the statistical equivalent.

How Can Students Lower their Premiums?

Fortunately, it’s not all doom and gloom for university students. In fact, there are several ways that a young person who is focused on studying can bring down their premiums. Here are a few ideas to get you started:

Ask for a good student discount.

While students may not have much in the way of a history to demonstrate their responsibility, they do have a constantly updated academic record that hints at the kind of person they are. Insurers know that students who get good grades are less likely to take unnecessary risks. Again, we’re talking about statistical likelihoods here. It’s nothing personal, but better grades mean you’re probably a better driver.

Get added to your parent’s policy.

This is only an option if you are not the primary driver for the vehicle in question. Being added to your parent’s policy can result in a discount, because the assumption is that the primary driver will spend more time behind wheel. But be careful with this one. The act of fronting, or naming a lower-risk person as the primary driver when this is not the case, is illegal. If found out, it can void the existing policy, put the driver at risk for driving without coverage and lead to major points on the license. It’s not worth the risk.

Look into telematics.

Some insurers will equip your car with a sort of ‘black box’ that measures the way you drive and reports back to headquarters. When there’s not much data about your personal habits for insurers to review, this is a practical way to prove what kind of driver you are. Over time, your premiums will adjust based on driving habits (propensity for speeding, etc.) as well as for how much time you spend driving in general.

Studying, Working and Short on Cash? Four Considerations before Borrowing

Posted on Jun 20, 2014 with 2 comments

Jun 20, 2014

As a student you undoubtedly have a lot on your plate in addition to your studies and trying to make sense of your career choices and it’s probably safe to say that from time to time money is, like water in a drought, a scarce resource.

Going without cash and surviving off cup noodles is one way to weather a cash-strapped period, at least for a few days, but what about when you’re looking at a period of a week or more and there are no more noodles?

This is a situation many of us have been through in the past, with most surviving – albeit a few pounds lighter and looking considerably trimmer – to tell the tale.

Stressing about money?

Stressing about money and where it’s going to come from next isn’t something students want to deal with, plus it’s hard to focus on your studies when your stomach’s grumbling and rumbling like an antiquated tractor and you’re living in fear of that knock on your door from your landlord; however, there are options at your disposal.

Could a loan be the answer?

Applying for a loan is an option if you have an income from a part-time job – provided you can prove your income – but as with all loans and borrowing in general, it isn’t something you should rush into no matter how sure you are that you can comfortably make repayments. When in need of a loan, one can always leverage the equity of their home. It is important to become familiarized with Home Equity Loan Rates.

Many students have found themselves in deep water because they’ve been too quick to apply for loans, not to mention those who’ve applied for loans to fund fun nights out, however there’s no need for you to find yourself in such a predicament provided you understand what you’re doing.

Create a budget before borrowing

If you plan on applying for a loan to get you through a tight financial period it’s advisable to create a budget before applying; in fact, considering the trouble some students have found themselves in, it’s essential.

Creating a budget, as a savvy university student, should be a doddle and you’ll need to list:
  • Your income, i.e. wages and money received from elsewhere – your parents perhaps? 
  • Your essential expenditure – bills, food, rent, transportation, etc. – and a little set aside for emergencies 
  • Your repayment amounts and the dates on which they’re due 

By creating a budget prior to applying for a payday loan you’ll understand how much you need to apply for and how much you can afford to borrow, though it’s often the case that they’re two very different figures.

Ensure you’ll have enough work to repay your debt

Many students have found themselves in over their heads because they didn’t have enough work to cover their repayments.
This is the nature of part-time employment to a great extent, so give your employer a call to ensure you’ll have enough work coming in and if necessary, Inquire about taking on a few extra shifts.

Budget your loan, i.e. don’t spend it straight away

We’ve all experienced the joy of seeing a bank balance for the first time in days; however, resist the urge to spend it straight away.

A great way to budget your loan is to withdraw the loan in its entirety, take a few envelopes, label each one with labels like ‘bills’, ‘food’, etc. and set aside an amount for each.

If you have more than one week’s rent to budget for it might pay to contact your landlord to inquire about paying two or more weeks rent upfront to ensure your rent is covered.

Meet your repayment commitments on time

Along with choosing the right payday loan provider to apply to – some payday loan providers offer great rates and easy application processes – meeting your repayment commitments in a timely manner should be your top concern.

Failing to do so can harm your chances of borrowing on favorable terms in the future and the last thing you want to do is incur a poor credit score before you’ve finished school.

Applying for a payday loan can be an effective way to weather a tight financial period, though make sure you know exactly what you’re getting into before applying.

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