Should You Buy or Lease That Car?

buy or lease carCars are a big part of our culture. Many of us work in places where cars are required to get around. At some point, you’ll need to purchase a car that costs more money than you have on hand. You’ll ask yourself “Should I buy or lease that car?”

People have been purchasing vehicles forever, but leasing (the practice of only financing the depreciation of a vehicle, not its entire cost) was once only accessible to wealthy people or companies with generous budgets. That isn’t the case anymore. As vehicle costs continue to rise, leasing becomes an attractive solution for every segment of the car industry.

Some people will tell you “It’s smart to buy the car,” or “Save yourself the hassle and lease.” Truthfully, there’s no simple answer. Which option is better depends on your situation, your finances, and your needs? We’ve laid out the advantages and disadvantages of both options.

Advantages to leasing a car

  • Your lease payment is usually less than a finance payment would be.
  • You can have a new car every year if you wanted (with all of the new gadgets).
  • You can drive a better car than you can afford.
  • A lease can be written off business taxes, making it a good company vehicle.
  • Perfect choice if you’ll only be in the area for a year or two.
  • The leasing dealership issues a warranty that covers much of the repairs.
  • You aren’t making a purchase, so sales tax is less.
  • There is no trade-in vehicle to deal with.
  • If the car is worth less than the lease predicted at the end, it’s not your problem.

Disadvantages to leasing a car

  • At the end of the lease, you don’t own the car. You have to return it (although there is an option to buy, but it’s often not in your favor financially.)
  • Terminating a lease early can lead to expensive fees.
  • Putting too much wear or mileage on the car can lead to expensive fees.
  • If you plan to keep the car for years, leasing is more expensive than buying.
  • Lease contracts are made to be confusing so you pay more in fees.
  • Your mileage is often limited to 12,000/year, which is easy to overcome.
  • You can buy extra mileage, but it’s expensive.
  • Typically the lease requires you to have excellent credit.
  • Failing to perform basic maintenance can result in extra fees.

Advantages of purchasing a car

  • You can modify or augment the car in any way you wish at any time.
  • It’s cheaper over the long run if you plan to drive the car for a long time.
  • There’s no limit to how many miles or much wear you can put on the car (which is important for commuters who travel long distances).
  • You can tailor the loan term (length) and payment amount to your budget.
  • You can sell the car whenever you want for as much as you like.
  • Once the car is paid off, a big piece of your budget opens up.

Disadvantages of purchasing a car

  • Many dealers require you to pay a down payment before you can finance a vehicle. This is smart anyway, otherwise, you’ll be upside down on the loan.
  • Long loans can mean paying a lot of interest by the end of the loan.
  • The monthly payment is higher than a lease payment.
  • You are responsible for repair costs (unless there’s a warranty, but that doesn’t last forever).
  • At some point, you’ll have to sell it, trade it in, or junk it.
  • A car is a depreciating asset, so you’ll never sell it for what you paid.
  • Fluctuations in the car’s market value can affect your selling price (which you can’t predict).
  • If you need to sell your car but owe more than it’s worth, you would have to pay just to get rid of the loan.

Summary

When you’re trying to decide whether to buy or lease a car, look at it like this: A leased car is convenient, easy, and you get to drive something new all the time. A purchased car is far cheaper, and you have the freedom to use it however you please.

Before you make any decision, it’s important to understand the real financial implications. Use this calculator to understand your potential car buying options.

Jennifer Dwyer
Personal Lines Representative
jdwyer@srfm.com

Jenn Dwyer

Auto Insurance: Why You Need a Specialty Policy for Your Collector Car

Exotic Car Insurance Why Do Exotic Autos Need Specialized InsuranceCollector cars aren’t used like typical vehicles. They’re often driven less and cared for better. They don’t commute to work, but they spend weekends parked at car shows. You need a collector car auto insurance policy that meets those specific needs.

Many collectors in the United States make the mistake of insuring their collector vehicles through big-name insurance companies. This costs them more and fails to provide adequate coverage. Specialty insurance policies provide significant advantages for collector cars.

Your collector car isn’t like the standard models

When you sign up for traditional insurance, you select a few options from basic categories like make, model, and condition. But that doesn’t tell the whole story of a collector car.

Collector vehicles (and exotic cars) are tricky to value. They may have a list of improvements, modifications and custom parts. A specialty insurer has to ask about what’s been modified, how much has been invested, the parts that are used, etc. Keep detailed information and receipts so your insurer can put together the right policy for you.

Specialty coverage is usually less expensive

You don’t drive your collector vehicle every day. It probably sits in the garage for weeks at a time, only taken out for the occasional drive or car show. So you shouldn’t pay typical insurance rates.

Insurance for collector cars is often far cheaper than standard commuter insurance. For example, the price of a policy for a 60s Mustang (which includes physical damage, comprehensive and collision) may only cost a couple hundred dollars.

Furthermore, bulk pricing is available for collectors with large collections including instant coverage when you buy a new vehicle.

Designed for low mileage use

Most specialty collector insurance carriers will not restrict how many miles you can drive your car each year but they aren’t looking to insure classic cars that are driven daily. Average mileage for these cars is between 2000-3000 miles per year – including car shows and events. If you do drive your car daily, high net worth carriers such as Chubb will insure your vehicle but the cost will be reflective of the use.

Collector car insurance uses the Agreed Value

Automobile insurance comes in three varieties:

  • Actual Cash Value: This is the depreciated book value that you would find in a source like Kelly Blue Book. Older cars with more miles and in poorer conditions are worth less. This is how a majority of cars are insured.
  • Stated Value: This is for collectibles. The insurer allows you state the value of the car that’s greater than the depreciated value. But the car still can depreciate, so you might get less than you expect in a claim.
  • Agreed Value: This type of insurance lets you state the vehicle’s value and guarantees you’ll get the full value of your policy in a claim. There’s no depreciation.

Collector cars are hard to price. They don’t have a clear market value. They also often appreciate in value. This means you always want to buy a policy that’s written with an Agreed Value so you’re paid accordingly should something happen. Coverage is also in effect for the full 12 months of the year, so there is no need to call and suspend coverage during the Winter months.

Don’t limit yourself to traditional insurance policies. Speak with us about insuring your collector or exotic car.

Mary McGrath
Personal Lines Manager
mmcgrath@srfm.com

Mary McGrath Personal Lines Account Executive mailto:mmcgrath@srfm.com

Wallingford Car Insurance: Ready to Go Electric?

Wallingford Car Insurance: Ready to Go Electric? Wallingford Car Insurance: Ready to Go Electric?

If you have been contemplating going green the next time you are ready to purchase a vehicle, you might have realized that you have an expanding number of options. Over the last decade, dozens of low emissions vehicles have emerged as affordable options on the consumer market from nearly all of the largest producers in the auto industry. Once limited to gas and electric hybrids, consumers now have to options to go partially or fully electric, and with new technologies emerging every year it is becoming increasingly apparent that green vehicles are the future. But according to recent reports, not everyone is ready to go electric.

According to Edmunds, an auto research firm and consumer resource, sales of all-electronic vehicles, hybrids, and plug-in hybrids have accounted for just 3.6% of new-car sales thus far in 2014. Which is slightly less than their presence in last year’s auto sale statistics. The data suggests that the sale of green vehicles has stalled in an otherwise booming auto market. But why?

The Alternative Fuel Data Center, a division of the U.S. Department of Energy, advocates that hybrid and plug-in electric vehicles can help reduce U.S. reliance on imported petroleum, increase energy security and reduce your own negative impact on the environment. It would seem the green vehicles are a win-win for everyone, consumers, the environment and even the country as a whole, yet consumers hold their reservations about these new autos. Experts suggest that the primary reluctance for many consumers is anxiety about the capabilities and limits of these vehicles.

While there a similar probability of running out of gas as there is a likelihood of running out electric charge or battery-juice, motorists still remain fearful about the capabilities of the new technologies. Other concerns many consumers hold are whether the vehicles are reliable, cost effective and whether they will fit the user’s lifestyle. Advocates of green vehicles however, are increasing their efforts to educate consumers about the benefits of electronic vehicles in hopes of inspiring more widespread adoption of the technology.  The University of Davis’s Institute of Transportation Studies has even crafted a clever and entertaining web application to help consumers determine what type of low emissions vehicle is the best fit for your family.

Are you ready to go electric?

Whatever you drive, taking the right steps to protect is important. At Sinclair Risk and Financial Management we are can help protect you and your loved ones on and off the road. We offer a variety of personal insurance solutions to help keep all your assets protected. Whether you drive an exotic sports car or an eco-friendly auto, our Wallingford Car Insurance specialist can help crafts a policy that best fits your needs and risk exposures. Give one of our Wallingford car insurance specialists a call today at (877) 602-2305 to learn more about all our offerings.

Wallingford Auto Insurance: Protecting Kids in Hot Weather

Wallingford Auto Insurance: Protecting Kids in Hot Weather
Connecticut Auto Insurance Protecting Kids in Hot Weather

August can be one of the most dangerous times of the year in many parts of the country, where humidity and temperatures can reach stifling heights and cause heath concerns for many citizens, especially children.  Over a dozen child fatalities have already resulted from severe heatstroke this year, most commonly sustained from being left unattended in family vehicle. Last year 44 infants and toddlers were lost due to heat stroke from sitting in a hot car. The U.S. Department of Transportation (DOT) and National Highway Traffic Safety Administration (NHTSA) assert that all of these deaths are unnecessary and 100 percent preventable, and have revamped their “Where’s Baby?” campaign for the third year to raise awareness about the issue.

Both agencies are reminding parents that heatstroke caused by leaving a child unintended in a vehicle takes a rapid toll. Due to their construction, vehicles heat up incredibly rapidly as they absorb sunlight and trap heat inside. On a warm day under 80 degrees Fahrenheit , the temperature can build up to dangerous level within ten minutes even when windows have been rolled down a few inches.  Higher temperatures will cause the car to heat up even faster. When a child’s body temperature reaches over 102 severe health complications can occur, and when their temperatures reaches above 107 degrees there is a high risk of fatality.

DOT and NHTSA are urging parents and caregivers to take a few precautions to help prevent heatstroke occurring to your family, friends and neighbors.

  • Never leave a child unattended in a vehicle. Even if the windows are down or air conditioning is on the child is in danger.
  • Check the entire vehicle before locking the doors and walking away and store keys out of a child’s reach to avoid them investigating a vehicle on their own.
  • Ask your childcare provider to call if your child fails to show up for care as anticipated. This is simply a good overall practice to retain knowledge of your young child’s whereabouts.

A child who has been exposed to high temperature should be removed from a vehicle as quickly as possible and rapidly cooled. The DOT and NHTSA also urge community members who encounter or witness a child alone in a vehicle to immediately call 911 or the local emergency number when temperatures are hot because the child is in danger.

At Sinclair Risk and Financial Management protecting your family is important to us. That’s why we are proud to offer strategic financial and risk management services to Wallingford, Connecticut families. We offer a variety of personal insurance solutions, including auto, home and life policies, to help keep you and your loved ones safe for a variety of life’s risk exposures.  Give one of our Wallingford auto insurance specialists a call today at (877) 602-2305 to learn more about all our offerings.

New Chrysler Commercial Vehicles of 2013

New Chrysler Commercial Vehicles of 2013New Chrysler Commercial Vehicles of 2013

In 2009, the nearly century old company founded by Walter Chrysler merged an alliance with Italian manufacturer, Fiat. This collaboration formed the Chrysler Group LLC. Although Fiat holds a majority of the company, this relationship has ultimately improved Chrysler’s sales. When the nation’s economy plunged, automakers’ sales sunk too. Chrysler was not the exception; from 2006- to 2009, they were struggling to boost up their sales. However, in 2010 they started to see progression and have since then substantially increased their sales figures. In fact, their car sales rose 27% and when comparing September 2012 to September 2011 numbers, they climbed 12%. Chrysler’s head of U.S. sales, Reid Bigland is very confident in their position in the vehicle sales industry. This optimistic and promising outlook has pushed Chrysler to become commercial. Chrysler’s transition includes a new commercial-truck division. Chrysler becomes commercial with the intention of broadening their audience to fleet buyers and small business owners. The new Chrysler commercial vehicles of 2013 has implemented new features to the Dodge Ram truck brand in order for commercial buyers and fleet buyers.

New Chrysler Commercial Trucks of 2013:

  • Improved tailgate camera: This is designed to connect images from the car’s 8.4 inch screen and the camera mounted on the rear. This will make it easier to hookup trailers.
  • Redesigned Frame: Chrysler has constructed a frame made up of high-strength steel. They also offer an optional fifth-wheel or gooseneck hitch mount.
  • Improved towing capacities: Chrysler becomes commercial by revising their steering and suspension systems.
  • Improved Engine: Their current model produces 350 horsepower at 3,000 rpm and 800 pounds-feet of torque. However, in order for Chrysler to become commercial they have increased their engine by producing 370 horsepower at 2,800 rpm and 850 pounds-feet of torque.

Chrysler becomes commercial in hopes of becoming the lead car manufacturer. These new vehicles will become available in 2013.

We can provide coverage for many types of business vehicles for your business. Give Sinclair a call at 203.265.0996 for more information about our commercial auto insurance programs.

High-Value Insurance: Match Your Coverage with Your Lifestyle

High-Value Insurance: Match Your Coverage with Your LifestyleHigh-Value Insurance: Match Your Coverage with Your Lifestyle

When you sit down to assess your finances, file tax returns, or examine your retirement fund, take a moment to look at your lifestyle. The lifestyle you’ve worked so hard to provide is a huge luxury. But high end luxury lifestyles also come with risk too. In risk assessments it is essential to examine your lifestyle, from your classic car, your exotic auto to your wine collection, yacht & any other hobbies you enjoy. Ensure you are properly protected with our high-value insurance.

Own an exotic or classic car? Purchasing an exotic or collector car can be a fulfillment of a dream for many. Whether you are looking for a restoration project or to speed down the highway, classic and exotic cars require significant dollar investments. And because of the high end luxury design of the car, its unique qualities also requires specialized exotic car insurance.

Art collector? Your existing coverage might include some coverage- however it is almost certain that as an art collector you will need supplemental art insurance to protect your investment. Make sure to get your art regularly appraised so you know their financial value and the amount of coverage you’ll need.

Diamonds & pearls? Jewelry insurance is an often overlooked item- sadly, many do not think to insure it until it is lost or stolen. The price of gold changes constantly, and your antique ring or necklace may be worth a lot more than it was 20 years ago. That would mean it’s more expensive to replace as well. That is why jewelry insurance is crucial.

Yacht owner? Among watercraft, yachts are a high end, distinctive type of private vessel that requires detailed knowledge and specialized coverage. Yachts need specific coverage that standard marine policies don’t always offer. When your vessel is a motor yacht, mega yacht, or something in between, it is essential to get specific Yacht Insurance coverage that provides you with full coverage of your vehicle.

For more than four decades, Sinclair Risk & Financial Management has forged relationships with insurance providers that specialize in providing high-end coverage. We have access to particular markets that enable us to craft custom homeowners and auto insurance programs that reflect the true value of your property, your risk profile, and your personal circumstances throughout the world. Contact us today for more information about our high-value insurance programs. 

 

Exotic Car Collections: Factors For Assessing Value

Exotic Car Collections: Factors For Assessing ValueThe challenge in investing in exotic cars is not only choosing models that you will enjoy, but investing in wise options that will help your collection appreciate over the years to come.

Paul Sullivan of the Wall Street Journal recently attended the Greenwich Concours d’Elégance in Connecticut. Delving through the concept cars, roadster, and muscle cars, he spoke with several experts on exactly what to look for in developing your exotic car collection.

Of course there is that initial love, whether it is spurred by nostalgia for the good ‘ole days or just appreciation for an exquisite, beautifully made vehicle. Yet when assessing exotic cars as an investment, there are numerous other factors to consider.

Exotic cars have significant value, but it also depends on the type, kind, and social value. For example, sedans from the 1920’s and 30s are losing value because the people who remember riding in them are dying. Of course, rare cars are ideal- for example a 1954 Packard Panther entered in the show was one of only four made.

However, age alone doesn’t work. To stand out from the crowd, cars must have a distinguishing feature. One 1955 Mercedes-Benz 300 SL Gullwing sold for $4.2 million at the annual classic car auction in Scottsdale, Ariz.- it was one of only 29 made with an aluminum body. Sometimes the make matters. Ferraris are more sought after than Camaros or Corvettes. At an auction in Greenwich, a 1965 Ferrari 275 GTB was sold for a record $1.25 million, a record price for a car sold in New England.

Obtaining an exotic or collector car can be the fulfillment of a lifetime dream. Each era has its style and attraction with prices to match. You may be undertaking a lengthy restoration, or looking to make your retro ride a lazy Sunday indulgence. Whatever your intentions, because of the significant dollar investment of your collector car and its unique nature, special insurance is what’s needed.

In evaluating the investment, restoration and insurance costs also must be considered. It is essential to assess all costs compared to the value. Especially when it comes to protecting your investment, you’ll need auto insurance that specifically addresses the unique needs of exotic cars.

For example, Sinclair Risk & Financial Management can tailor a program to include a zero deductible feature so that you have no out-of-pocket costs; high liability limits; mileage plan options based on one that fits your needs; automatic coverage for newly acquired vehicles for a specified time; inflation guard; and other unique coverages designed for this niche.

For more information, contact Sinclair Risk & Financial Management today.