December 19th, 2009
Gap insurance simply stands for Guaranteed Asset Protection insurance. Gap insurance is a type of protection for motor vehicles which is designed to come into effect in the event of an insurance claim for your vehicle. Gap insurance fills in the “gap” between what your car would have cost if it was brand new and what it costs now. This therefore ensures you get a full payment towards a brand new car should your old car be deemed a total loss.
In normal insurance situations with a standard comprehensive policy, when a vehicle is deemed a total loss following an accident your claim will cover the cost of your car as it stands today prior to the incident. The insurance company will evaluate the worth of the car and then make a settlement for your claim based on this estimation minus your policy excess. Usually a policy holder will choose the cheapest premiums for their policy which in turn means that in the event of an accident, the costs they have to cover themselves (the excess) is quite high. This can mean the final sum paid to an individual is poor at best and not nearly enough to cover the costs of purchasing a new car.
Gap insurance can help you to reclaim some of your money back by calculating an additional sum on top of your usual insurance that covers the cost of the depreciation in value your vehicle has suffered. Motor insurance usually only covers what you will need to put yourself in the same position as you were before. This means even though you may have paid thousands for your car originally, they will only pay out what it was worth at the time of the incident which can be significantly less. Since your car has depreciated in value over the years the original sum you paid out for your car is not covered by your insurance as the car is no longer worth that amount.
Gap insurance is a separate insurance scheme with its own premiums that is to be used in conjunction with your usual motor insurance. Your gap insurance is not designed to be a motor vehicle insurance policy. Gap insurance only insures for the depreciation in value of your vehicle. This means you can only claim on your gap insurance if:
- Your vehicle is deemed a total loss (i.e. is uneconomical to repair according to your vehicle policy).
- You do not qualify under your existing motor insurance policy for a brand new replacement vehicle but are offered a cash settlement instead.
- Your vehicle has depreciated in value from the time of purchase to the time of the incident where it is deemed a total loss.
- Your gap insurance will take into account both the settlement you were given and the excess you are accountable for.
For example, you purchase a car for 15,000 and 5 years later your car is stolen or damaged beyond reasonable repair. As the car is not brand new (1-2 years) you do not qualify for a replacement vehicle. The current worth of your vehicle is estimated at 900 by a qualified engineer and of this amount you were paid 750 from your motor insurers because you had an excess of 250 on your policy. You then make a claim on your gap insurance once your motor claim has been settled for depreciation loss. Your gap insurance will take the original payment sum (15,000) and deduct the total settlement sum including excess (900). The gap insurance will then make a separate payment to yourself of 14,100 to cover the depreciation in value of your vehicle.
December 14th, 2009
If you have an adverse credit rating you are not alone, many people suffer from a poor or non existent credit rating which can make day to day finance decisions very difficult and time consuming. Your bad credit rating may affect your chance to get approved for loans, credit cards or other financing information. With an adverse credit rating, car finance may become a little confusing or even daunting especially if you have been turned down in the past.
However, if you have a bad credit rating there is still hope for car financing. If you are wondering what the next steps to take are for car finance here is how you can make sure your next application is successful.
- Find out what your credit score really is. It may not be as bad as you think it is, or it may contain out of date information or credit that has already been paid off or will be soon. Contact companies that have out of date information on your credit score to get it removed from your rating. If you notice any small payments you can sort out now, get those paid off as soon as possible before you make your next application.
- Make sure you plan your monthly bills carefully and properly. Even something as small as paying your electric bill on time every month can dramatically improve your credit rating over the course of the year. This will help improve your loan success chance and the amount of loan you will be entitled to.
- Find a finance company that specializes in car finance for people with an adverse credit rating. These companies will have a wide selection of different financing options for you to choose from and will help you to find the right one for your current needs.
- Sort out your budget before you sort out what car you want. Make sure you work out exactly how much you can afford to spare on the monthly repayments ensuring to take into account extras such as petrol, tax, repairs and insurance. Leave yourself plenty of room for error and emergencies so that you can make sure you don’t miss any loan repayments no matter what happens.
- Talk to a financing agent from your chosen company to discuss your loan options. Find out which loan is most suitable for you such as a secured loan, and unsecured loan, PCP financing, no deposit car finance or used car finance among many others. They will be able to take you through the pros and cons of each plan and which ones may be available to you more easily.
- If your credit rating is extremely poor, make sure you plan our your current budget and work on ensuring your current bills and payments are all taken care of properly and on time. Some finance options include successful loans based on the past 3 months of your finances as opposed to your credit rating which can be much more beneficial in some situations.
December 13th, 2009
Many people try their luck in stock market every day. According to an estimate, everyday, more than 1 million people place their first order in the stock market. Many of those investors loose money and quit the market with frustration. Well, stock market is for those who have patience and can keep invested for long term. Stock market is also known as uncertain or volatile market because of its ups and downs at each second. It is considered to be high risk market. Despite of turbulent nature, stock market has created many winners and super rich people. Every decade has its hero in the stock market and the fact is not limited to few countries only. Any smart investor will have his knowledge to support it when it comes to picking the best stocks. Good stocks do not make double figure overnight.
Many stock experts offer their views on market everyday. Some of those views are absurd in nature and do not make any sense at all. To any investor his own knowledge is the best asset. You must use your own methods of finding and spotting the stocks which have potential to grow. Market always has such stocks which are selling at low price and but can give you good returns in long term. Many investors follow the rule that when everyone says “Buy”, it is the time to sell and when everyone says “sell”, it is time to buy. The method has not been tested to be foolproof. A fundamentally strong stock backed by good management will always grow and it will be able to sustain the pressures and other factors. Any downside in stock market, gives you good opportunity to grab your stocks which you always wanted to buy. Many investors in Arab world follow this method. It is no big surprise, during recession; investors from gulf countries make smart investments because stocks of blue chip companies come cheap during the period. Let your experience and knowledge be the guide to make you winner in this exciting market.
November 24th, 2009
Taxes are considered to be the share of state from your earning. You must be sweating day and night to earn money for your requirements. But here comes the catch, you have to earn to pay taxes as well. Many people consider that taxes are essential luxury which must be afforded with hard-earned money. So taxes are here to stay and you have to manage to pay on time. Many people wonder in different parts of the world that government collects tax from us but our life style does not improve. Many countries have real bad tax systems and most of these countries are in Asia. Almost all the poor countries have high taxes on personal and business income. Some of those go as high as 60% of personal income. Asian countries have very high taxes on imports and sometimes double than the actual cost of the product. So much tax collected but still the infrastructure is poor and bad roads are everywhere.
The big question is, where is tax payer’s money is going?. Highest percentage of total tax collected, comes from salaried individuals. Salaried class suffers with the tax and remaining income. Even after paying the taxes on salary, one ends up paying more taxes on each item purchased from anywhere. According to a rough estimate, only 40% of your income is tax free. It means 60% of the money goes in paying the taxes. Many countries like UK allow person to be an enterprise and pay the taxes on what ever is remaining after expenses. That way, many people are able to save good amount of money. No country is exception where tax payer’s money is not wasted by the politicians. However, taxes can not be removed from the system. Your money in taxes is an investment into growth of the country and it is required to build schools, roads and other necessary infrastructure.
November 3rd, 2009
Money market includes all the instruments which can help you grow the investments. Most popular method in market is to lend the money for short term. Generally the borrowing takes place at the large level but is not limited to big lenders. This market is also referred as paper based market because many transactions are just completed in papers without actual money being transferred from one person to another. Many people ask, “what is the need of such market?” Actually the funding for large project comes from big lenders such as banks and other financial institutions. The money market spins around the interest rates. Interest rates are lower for deposits while lending rates are always higher. Margin is the earning for banks. Many banks operate primarily on floating margins. Banks need to find the ways which are effective and returns are assured. Money market is good place where these banks earn good profits.
Banks like to lend the money to big borrowers who require large money to fund the big projects. A well established borrower is a guarantee of good returns. Generally the span of lending is around 13 months or so. It depends from bank to bank, the agreed terms and conditions may differ. The fact remains the same, larger lending attracts good margin. There are many institutional investors who look for money for short term. Sometimes, these large corporations require large funding for completing project. Money market also has good reach in government sector. One government organization funds the project of other, just on paper. There may or may not be the actual transaction of money. It is convenient method for government to move money from one department to another. Money market is an interesting field to watch. Although there are many rules and regulations related to lending which are followed for compliance. There are some limitations as well but after all it is money, which every organization has to earn to survive.
November 1st, 2009
There are many financial obligations in life and sometimes you need money to pay big amounts. There are many ways to raise the money. You can avail a loan from banks. Unsecured loans may cost your more than you can imagine. Another option is to mortgage your home and have quick money against the market value. This way, it is one type of loan against the property. You still own the property and as you pay the sum the loan get lighter. There are many professional advisors available in the market who can plan and advise you to have the best value. Large construction projects require money to complete the buildings. The large level of funding is made available by the banks. The funding is offered against the property value and it becomes limited term mortgage. And it is in the favor of the both parties as one can have money and other can earn good interest with limited offer to keep property mortgaged.
Although there are many sites available where you can find the current mortgage rates. Your decision to mortgage must be based upon real needs. Sometime mortgage option costs you more than normal loans. Banks prefer mortgage option because it gives them guarantee that their money is safe. You must educate yourself on mortgage issues. You can request multiple providers to send their best quotes. It would help you to find the lenders and banks which will give you more value and amount you need. You can run a compare tool on the information you get from these sources. Many websites have good reviews of the providers and you must learn from the experience of others. It would help you to avoid many issues. The process to mortgage must be smooth and many professional consultants can make your life easy with small amount of fee.
October 24th, 2009
Many people lament when they become old or face the severe health issues. Sickness of long time makes anyone unable to earn the monthly income and if you read the news paper you would find many cases reported when someone went broke due to bad planning or no planning at all. The financial security is the need of today and future. Something looks good today may not be the same tomorrow. It is the planning against the unforeseen events of the life which have potential to destabilize our life style. Life Insurance is the need of the times we live in. There are many providers in UK which have designed the policies for all the people in many different professions.
All the people have different risk factors. Your premium is calculated on the basis of sum assured and risk factor attached to your life. It is advisable to go for the policies when you have money and you are not old. It is an investment which gives you the guarantee of continued life even in case of the worst events in the life. You need to feel absolutely secure for financial liabilities and your home becomes another area which needs Mortgage Protection. It would give you comfortable feeling that your home is always yours.
October 23rd, 2009
We all have valuable items which we have bought with passion and hold very dear to us. There are no guarantees in life for anything you see around you. Insurance cover provides protection against unforeseen incidents and accidents. There are many industries which have compliance rules which are laid by regulatory bodies. Construction and manufacturing units can not allow any person to work who is not having insurance coverage. In some cases, it is the responsibility of employer to fund the insurance cost. Anyways, It is not only people, even objects can be insured. Insurance industry works on the fundamentals of claims vs. deposits. The claim rate is always lower than the deposits or costs which are paid by the people. There is huge margin for insurance companies. In many cases, insurance companies also face trouble with claims. For example Michael Jackson’s last tour was insured for more than $300 million. The events did not happen and insurance company lost millions.
Insurance companies design and launch the policies in the market for all sorts of requirements. Primarily, life and auto insurances are most popular because of legal requirements. Many companies also insure your homes, large buildings, construction projects, air planes, bridges and many others. For an individual it is very important to read the offer documents before signing the policy papers. Your insurance agency may not be disclosing full terms and conditions to you. Some also have hidden charges about which you are informed later when you for insurance claims. Generally, all insurance companies have trouble in clearing the claims and it take very long time because all the cases are investigated separately by the agencies for claims. If you are not aware of many terms in documents, It is always better to seek help from the experts. You must feel fully covered with good insurance policies.
October 20th, 2009
Many families and its working members generate income which is appropriate for immediate requirements. A long range planning includes building assets which will have good value in the future. Not all have big money ready to be invested. The loans seem to be good idea for arranging the money for expanding your business or buying home for your family. A careful planning is required before you actually borrow the money from banks and lenders. Your own previous saving is well utilized at such times when you are looking for money to realize your plans for future. A serious and careful approach can give you the money in some days which can be utilized on various ventures.
Generally all the banks like to look at your credit report and payment history of previous loans and borrowings. It is very important to keep your financial history absolutely clean. A bad credit report would make you spend more on your loans because unprotected loans are costly than the normal ones. First step is to know the amount of money you need. Second step is to find the sources which can give you the money on cheap interest rates. You need to read the offer documents and words carefully. Sometimes, banks and lenders do not disclose full terms and conditions. An oversight leads to paying hidden and extra charges which are levied upon the amount you borrow. Avoid those loans which are not easy to repay and do not have option of making part payments.
All credits and loans must make you feel that it is easier to arrange the money and plan for future requirements. It will take research of many days to find out appropriate lender. Almost all of us get the loan offers in our email box, claiming easy loans without documents. All such offers do have hidden charges and are only marketing gimmicks. A serious offer can be obtained from banks. You can ask multiple sources to give you competitive rates with their quotation. If you can find the services for insuring your loans, it is good protection against unforeseen future problems. You need to make it clear to your bank that it needs to disclose full terms and in any case you are not going to pay more than which has been communicated to you.
October 13th, 2009
Many people do no realize the need for managing finance. Sometimes our home does have instances of spending more than it could afford. It leads to various problems. The rising bad debt may be a side effect of bad financial management. It is worth keep tab on expenditure and you need to have detailed plans to make it effective so that the fund is spent on right things and essential services only. It would enable you to save good amount of money which can be utilized on other requirements.
There are many tools available to plan your finances. Easiest and most popular is to keep a diary of in-coming money and out-going expenses. A small diary or paper based notepad can go with you everywhere. Software based tools can also be used. Microsoft Excel is an excellent tool for making your own work-sheets and easy to implement formulas make it more suitable to your requirements. Any software or paper based solution must enable you to keep an eye on assets, liabilities, investments and other expenses. Keep checking your notes and details; it must give you good saving at the end of the month.
A careful planning and run on process makes you understand many issues and you would know exactly where to cut your spending. There may be expenses which were not needed at all and could be avoided to save money. You can make several categories like essential, optional and deferred. With these segments, you can summarize your expenses before actually buying something. Liabilities are something which needs to be kept aside and cost needs to be re-looked. You must focus on saving and building assets for long term which can include investment into real estate or any other area where you anticipate good appreciation of returns. Nobody understands your situation better than you. Because you have all the details in mind and knows well if something is making real sense in terms of investments and expenses.
