Steve Moskos' Blog

What are the Risks to Having Only Liability Car Insurance?

2/13/2020

Because having only liability coverage on a car insurance plan can lower the cost of your premiums dramatically, many people consider purchasing only that. However, if you have a loan on your vehicle, liability only is usually not an option. Your lender may require proof of insurance to protect their asset. (The Bank wants to make sure it can get its money back if the vehicle is wrecked.)

Having only liability on your vehicle does have some risks. Liability only means your insurance will only cover the costs for the other cars in the event you cause an accident. You will have to pay to repair or replace your vehicle on your own. The policy may also limit what the insurance company will pay the other driver and that means you may have to pay out of pocket to fix the other driver’s vehicle and any damage caused in the accident.

Liability insurance does cover personal injury for injured parties up to the limits of your policy. Each policy is different so you will need to read your policy closely. Again, you are on your own for any medical bills you incur as the result of the accident you caused.

Another thing to consider if you only have liability on your car is that you won’t have comprehensive damage repair. Comprehensive damage includes weather damage, such as hail or flood, or a rock hitting your windshield. If you have only liability and hit a deer, you will be responsible for fixing your car. When deciding whether to go with liability only, you need to consider the cost of repairing your vehicle out of pocket.

When it’s time to purchase or update your car insurance, liability only may seem like a great deal since it is so much cheaper. If your car is only worth a small amount of money, or if you have a large savings, liability may be the way to go. However, if you can’t afford to replace your car or pay for repairs, it may be worth it to pay the extra each month and keep more insurance coverage on your vehicle.

How Technical Service Bulletins Differ From Recalls

2/6/2020

What is a Recall?

When a car manufacturer discovers a safety problem on their vehicle, they start an investigation into the issue. If the problem is serious, they may even stop production of any models that could be affected. Once a solution to the issue is developed, the manufacturer issues a recall for any models that have been affected by the faulty part or programming.

The manufacturer will send out notices to all owners of vehicles with a VIN (Vehicle Identification Number) that could be affected. Recalls are mandatory and must be completed by a registered dealer of that make and model of car. Recalls are free to owners.

What is a Technical Service Bulletin?

Manufacturers track warranty claims. When a common problem surfaces, the manufacturer will usually investigate the problem. Once the manufacturer discovers a solution, the repair procedure is posted as a technical service bulletin.

These service bulletins are a good place for mechanics to start the diagnostic process when someone brings a vehicle to them with a problem.

Technical service bulletins are issued for non-safety issues. They are voluntary and are not free to car owners. However, the problem may be covered under your car’s warranty, or the manufacturer may open a special warranty period for the problem. In these cases, your repairs will be free of charge.

How to Find Recalls or Technical Service Bulletins

You can take your vehicle to a local dealer’s service center where they will look up your car’s vehicle identification number and determine if your vehicle has any outstanding recalls, but this may require a service appointment and may cost you.

You can also find recalls and some technical service bulletins online. Many car forum sites offer this information from people who share what they have learned. You can also check the manufacturer’s website or the National Highway Transportation Safety Administration (NHTSA) website.

How Depreciation Affects your Car’s Value

1/27/2020

A popular belief is that as soon as you drive your new car off the sales lot, it loses value. This is a true statement, as cars usually lose about 20% of their value within the first year and up to 60% within five years. The rate that the vehicle loses value is called depreciation.

What Affects the Rate of Depreciation?

Depreciation is the monetary toll that several factors take on the value of your car. Some of the factors are how old the vehicle is and how many miles are on it. The rate varies between makes and models of cars, as some hold value regardless of mileage and age.

The effect mileage has on your car depends a lot on what car you are driving. A fancy sports car with 15,000 miles on it in a year would be considered a high amount of mileage because that isn’t a car that most people drive often.
However, a mini-van with the same mileage would be considered an average amount of miles. A car with more miles than is average for its type will have a higher rate of depreciation.

Another way the make and model of your car affects depreciation is that cars in higher demand when they are new often hold their value longer than other cars. Also, cars in states with warmer weather are often in better shape than cars from cold weather states due to salt damage.

If your car is one that people consider to be more reliable, it will usually keep its value longer, too.

How to Slow the Rate of Depreciation

While many of the factors that determine the rate of depreciation on your car are out of your control, there are a few things you can do to lower that rate.

Try to limit the mileage you put on your car.
Keep up with the routine maintenance recommended by the manufacturer.
Keep your vehicle clean – inside and out – and wax it regularly.
Accidents will lower the value of your car.

When you are purchasing a vehicle, it does little good to try to guess what type of car will hold its value. Purchase the car that suits your needs and desires and don’t try to purchase one that will depreciate slowly.

Being Sued by a debt collector? Here's What You need to do.

12/11/2019

Drowning in unpaid bills is one of the most stressful things you can go through in life. Worrying every day about what bills to pay and hoping that no debt collectors call is a terrible feeling. It is even worse when a debt collector sues you for an unpaid bill. You may be humiliated and worried about what to do. Below are the top five things you need to do if you are being sued for unpaid debts.

Respond to the lawsuit. Although you may want to throw away the letter informing you of the lawsuit and pretend you never got it, that is the worst thing you can do. You must respond to the lawsuit or face a default judgment against you. This may happen if you ignore the lawsuit. If the debt collector’s attorney is in court and you aren’t, the court may rule in their favor.
Gather evidence about your debt. First, you need to make sure the debt is really yours. Unless you are positive it is, start asking questions about the debt. Look back through your records for the debt. You may also be able to look at your credit record for the debt. If the debt is yours, check your records for what you have already paid and make sure it wasn’t paid off. While there are unscrupulous people, it may also be a mistake in bookkeeping that can be resolved.
Contact an attorney. Make sure the attorney you choose has experience with debt settlements. A family attorney may not have the skills you need to fight a lawsuit over debt. Take your documentation to an attorney and discuss your options with him/her. Always be completely honest as an attorney they cannot give you the best advice if you hide things from them. You may be embarrassed, but your attorney is there to help you out of a bad situation. Resist the temptation to handle the lawsuit without an attorney. You may think that incurring more debt by hiring an attorney is a terrible idea, but you need help when dealing with the lawsuit.
Challenge the lawsuit. If you and your attorney feel you have reason to dispute the lawsuit, file that paperwork immediately. Make sure you have copies of all of your documents that prove you have either paid the debt or that it isn’t yours. Your attorney can advise you on what types of documents the court will want to see.
Consider filing a countersuit against the creditor. If you and your attorney feel the creditor did not follow the Fair Debt Collection Practices Act, a countersuit may be another option for you. Again, consult with your attorney and always keep detailed notes when you have contact with the debt collector so you can prove what you and the collector said.

Dealing with debt is hard enough without trying to handle a lawsuit, too. No matter how well you think you understand your options, an attorney who specializes in debt defense is your best option. You may make your problem worse by making a wrong decision too quickly.

Are Car Maintenance Plans Worth the Cost?

11/29/2019

Buying a new car is an exciting time. When you are sitting at the dealership, the salesman may try to offer you many other products for your vehicle and it is hard to make a quick decision on what you really need. A car maintenance plan is an option that your salesman may try to convince you to purchase.

What is a Maintenance Plan?

If you are offered a vehicle service plan, ask for specifics about what that plan is. Many dealers use that term for both extended warranties and car maintenance plans.

A car maintenance plan covers services that the vehicle’s manufacturer recommends be completed to keep the car running in optimum condition. These things could be oil changes, filter replacements, and tire rotations. Dealerships have learned that offering maintenance plans can be a very profitable revenue stream for their business.

These plans are prepaid and can be very valuable to have, but you need to carefully consider what is covered and what you would pay out of pocket compared to the cost of the plan. Always read all of the fine print details, and if you don’t understand the contract, consider having an attorney explain it to you.

The Positives of Purchasing a Plan

Dealerships rely on their service departments for a large part of their income. By selling car maintenance plans, they are guaranteed that their department stays busy. These plans are prepaid and often offer discounts on the services you will need. Remember, though, that what sounds too good to be true often is, and you still need time to think about whether you actually need the maintenance plan. Do not let a sales person talk you into something that may not fit your needs.

For example, the average cost of an oil change in South Carolina is around $30. Assuming you change your oil as recommended, or about every three months, that is $120 a year. Tire rotations are about $40, and it needs done once a year. Filter costs vary, but you may plan on about $100 for filters a year. If this is your plan of maintenance, you will be paying about $260 a year in car maintenance. (You also need to check your car’s owner’s manual for recommended maintenance.) If you can get a car maintenance plan for less, it may be worth it.

The Negatives of Purchasing a Plan

Before you purchase a plan, carefully read your owner’s manual. These can often be found online if the dealership doesn’t have one. See what maintenance the manufacturer recommends. Some dealers still use outdated information to try to convince customers to purchase the plans.

An example of this would be that new vehicles require very little maintenance. Many cars will go for more than 5,000 miles (instead of 3,000) between oil changes. This reduces your out of pocket expenses. Many manufacturers now state that your vehicle will only need significant servicing every 30,000 miles. If you don’t drive much, a car maintenance plan is probably not a good option for you.

Also, once you purchase the plan, you will have no options about who services your car. Unless you decide to pay out of pocket, you will have to take your car to the dealership for services. If you aren’t happy with their service, you have no options. Another thing to consider is that the things that do wear out quickly, such as wipers and brake pads, are not usually covered by maintenance plans.

The dealership may also sell the plan according to their schedule of maintenance and not what is recommended by the manufacturer. If you drive often in extreme heat or cold, oil changes may be recommended more often, but your dealership may not take these conditions into account, and you will have to pay for the oil changes yourself.

The Final Cost

If you decide to purchase the car maintenance plan, be sure to pay for it in full and do not add it to the total of your car or you will be paying interest on the plan, just like the purchase price of the car. To make the best informed decision, make sure to find out exactly what is covered and compare prices of those services to the total cost of the plan.

How Unpaid Debts Can Affect Your Financial Future

11/8/2019

Unpaid debts can affect your life for several years. You may be stressed over how to pay your bills and think it would be easier to not pay them, but not repaying what you owe can cause long and short term problems you may not have considered.

Short Term Effects

You may have additional fees, such as late or collection fees, added to your debt which will make it even harder for you to pay the debt.
Your credit score will drop.
You will more than likely need a larger down payment for purchases or deposits.
You will have a harder time refinancing any loans you may have or to get loans to make new purchases.

Long Term Effects

Higher interest rates on new loans.
Interest may be continually added to the debt.
You may not be able to get loans in the future.
You may find it difficult to raise your credit score as negative items often outweigh the positive items.

Depending on what kind of bills you haven’t paid, you may also have other financial problems.

If you haven’t paid your utility bills, such as electric or gas, it may be harder to get new service if you move and you may be required to put a deposit down on your service.
Auto loans that are not paid can result in your car being repossessed. Without transportation, losing your job is a real possibility which will cause even more problems. Even if you voluntarily choose to give the car back, you will still have repercussions on your credit score.
If you don’t pay your phone bill, it can be difficult to find another phone service provider that will be willing to offer you a service plan.
Not paying your mortgage can result in the bank foreclosing on your home and it may also make it nearly impossible to get another mortgage loan in the future.
You may be evicted if you don’t pay your rent. Many agencies check your credit score before offering you a lease so being evicted once will make it difficult to find another place to live.

A low credit score can also raise insurance rates. You may also be denied new credit cards for many years. Besides the financial effects that unpaid bills have, the stress can cause health problems and depression. Many companies would rather get some of their money than none so contact your creditors as soon as you are having problems to see if you can work out a payment plan you can both agree on.

Top 5 Reasons You Need a Local Lawyer Handling Your Case

10/28/2019

In a world where you can Google, search the internet, and even get legal counsel, it may seem strange to have a local lawyer. But ask yourself this, would you want a to see a medical professional you have never met before treating you for something serious? Then this area of your life shouldn’t be fast tracked to the internet either. You need a local lawyer in your corner for many reasons.

Laws Differ: State laws, local laws, and even local ordinances can affect your case. Local lawyers can determine all the nuances of your case and be able to protect you better. Lawyers can write your will, work through a divorce, help you set up guardianships for your children, and sell your home. They can also help with businesses by setting up your LLC or Sole Proprietorship, creating contracts, protecting you from lawsuits, and even meeting state and federal compliance.
Whole Story: Meeting with a local lawyer allows him/her to ask follow-up questions to see the entire picture. They will be able to pick up on visual cues, verbal cues, and even your body language that will enable them to guide you in telling your story in a more caring manner.
In the Know: Local lawyers know local judges and other lawyers. This knowledge may be beneficial to your case as they already know what judges prefer when trying a case and how to interact with attorneys that may be representing your opponent.
Accessibility: You are able to meet at a mutually agreeable time. All of us have had appointments that are hard to keep, hard to get off work for, and even set for one time and three hours later you are still in the waiting room. Local lawyers realize your time is precious and try to ensure that their schedules reflect that for each of their clients.
Cost: Local lawyers typically cost less, but even if they don’t, you’ll spend less money utilizing a local lawyer because they are already familiar with the state laws. Attorneys operating outside of the state, like through a lawyer mill, will need more time to review the cases and laws that support your case. Local attorneys already know what causes of action will apply to your case.

Protect yourself by seeing a local professional for any legal issues that arise in your life. Knowing that someone is in your corner and protecting you legally gives you substantial peace of mind. Having that person be there through some of your more difficult life moments is irreplaceable.

Steps to take when buying a car from a private seller

10/21/2019

When buying a car from a private seller, you have few guarantees or warranties to fall back on. Here are some steps that you can take to reduce your chances of being cheated by an individual looking to ditch a defective car.

1. Set Your Car Budget Before You Start Shopping
The best way to avoid getting drawn into spending more money for a vehicle is to decide how much you are able to spend and have this number clear in your mind. Only look for those cars within your budget and don’t be talked into spending more.

2. Select Your Target Vehicle Model
Check Kelley Blue Book to see what model years and mileage you can expect from a car that will fit within your budget. Use Consumer Reports to see reliability ratings and check the Insurance Institute for Highway Safety to review crash safety ratings for the make, model, and year for the car you are going to see.

3. Test Drive Your Target Model
It is important to feel how the car you are going to buy handles. Are there any mysterious noises when you drive the car? Check how the car handles in city traffic and on the highway.

4. Get the car inspected by a mechanic
For about $50, you can have a mechanic at a car shop do a used vehicle inspection. This is useful to help you avoid buying a car with major problems. It is also useful to have the inspection results when negotiating the price.

5. Negotiate the Best Price
After gathering information about the car from your test drive and car inspection, show the seller book prices or a list of repairs that are needed. Sellers are more likely to accept the lower price if they think it is rational and that other buyers would likely come to the same conclusion.

Following these steps will help you make a good deal with the private seller, but there are no guarantees. It is important to find out as much as you can about the car before you purchase, and doing this will lessen the likelihood that a seller will take advantage of you.

The dangers of payday loans

10/15/2019

Payday loans have a strong appeal when you find yourself struggling to make it to the next payday. They’re quick. They’re easy. There is no credit check. And the money is there instantly. However, they are extremely dangerous and should be approached with caution.

The first major danger is borrowing against your future self. By using a payday loan, you are giving up part of your future paycheck. Unless you budget carefully you will need another payday loan with your next paycheck to make it through to the third payday and so on. This could set up a series of payday loans that may be impossible to pay off.

The biggest hazard is the interest rate. Average interest rates vary from 300% per year to almost 800% per year. For each $1 you borrow, you could have to pay $8 back with this type of loan.
One last, well-hidden danger is that this loan can affect your credit score. If you struggle paying back your loan, it can be sold to a collection agency. When your loan is sold, it will show up negatively on your credit score as a non-payment of a loan. Then the collection agency will be merciless in trying to get you to pay your loan back. This leads to threatening phone calls and nearly continuous mail.

To avoid this drastic financial step, ask for help from friends and family, go to a bank and ask for a small personal loan, talk to organizations that help you set up a budget, and go to other organizations that will help you financially get back on your feet without the pressure of a payday loan.

Here is a short list of resources to get you started:

The Department of Justice offers a list of Approved Agencies for credit counseling.
https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111?op=Go

Here are questions to ask a credit counselor: https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor

Nerd Wallet can help you set up a budget.
https://www.nerdwallet.com/blog/finance/how-to-build-a-budget/

For even more financial advice, Dave Ramsey has free resources.
https://www.daveramsey.com/

<<Previous

What are the Risks to Having Only Liability Car Insurance?

How Technical Service Bulletins Differ From Recalls

How Depreciation Affects your Car’s Value

What Affects the Rate of Depreciation?

How to Slow the Rate of Depreciation

More Ford Door Latch Problems – National Highway Traffic Safety Administration Investigates Complaints

Being Sued by a debt collector? Here's What You need to do.

Are Car Maintenance Plans Worth the Cost?

What is a Maintenance Plan?

The Positives of Purchasing a Plan

The Negatives of Purchasing a Plan

The Final Cost

How Unpaid Debts Can Affect Your Financial Future

Top 5 Reasons You Need a Local Lawyer Handling Your Case

Steps to take when buying a car from a private seller

The dangers of payday loans

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What Affects the Rate of Depreciation?​

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What is a Maintenance Plan?

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The Final Cost

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What Affects the Rate of Depreciation?