Should You Buy or Lease a Car?

In the market for a new vehicle? You have a couple of options:

  • You could lease a car — paying the dealership to use it for a specified period of time.
  • Or, you could buy the car.

While some buyers can pay for a car all at once, most choose to finance it by taking out a loan and paying it back in monthly installments (usually with interest).

If you’re primarily concerned about cost, buying is usually the smarter choice. But leases make up a growing number of auto sales — almost 25 percent in the second quarter of last year, according to Forbes. And buyers who sign leases aren’t always getting a bad deal. In fact, sometimes they’re getting a better one.

So, should you buy or lease a car? Let’s take a look.

Buying: pros and cons

Buying a car has some obvious advantages. After you’ve paid it off, you can sell the car or continue to use it without making additional payments. On the other hand, you might be saddled with costly repair bills once your warranty expires. And your vehicle’s resale value can be hard to predict.

Generally speaking, buying is cheaper if:

  • You tend to use and abuse your car. Leases involve pricey mileage maximums, so the more you drive, the cheaper it is to buy rather than lease. Buying is also cheaper if you tend to be lax about maintenance since excessive wear and tear will cost you at the end of a lease.
  • You need to be flexible. Not sure how long you’ll need a car? Don’t lease. If you can’t find someone to swap your lease, getting out early can be expensive. Buying a cheaper used car is probably your best bet.
  • You don’t mind keeping your car for a while. If you’re going to upgrade your wheels every few years, leasing may be more economical. But, if you’re happy driving a car for a longer while, buying pays off.

In short, if you intend to keep the car for a long period of time and can afford the upfront costs, buying will save you money in the long run.

Leasing: pros and cons

There are benefits to leasing a vehicle. Leases often entail lower down and monthly payments (which is good if you’re worried about short-term costs). And if you choose a 3-year term, most of your car’s repairs will be covered by your warranty.

It typically costs more to insure leased vehicles, however, since lenders often require you to carry comprehensive and collision coverage, as well as gap coverage.

Still, you might want to lease if:

  • You don’t drive very much. Most lease agreements limit drivers to 10,000 to 15,000 miles per year. Go over and it’ll cost you when you turn in the car (usually about 15 cents per mile).
  • You like to drive newer cars. Leasing allows you to trade in your car every few years, which means you can upgrade to the latest styles and technology. If you value the latest new-car innovations, go with a lease.
  • You need more cash in your pocket. Whether you can drive the car for free in 5 years may not matter if you can’t afford to put in the money upfront. Leases, on the other hand, can often be flexible. You might, for instance, be able to work out a lower down payment with higher monthly payments or a longer lease period that spreads out the monthly payments.

Just be sure you’ve thoroughly read your lease contract before you sign. Leases are notorious for hidden costs, so if you don’t understand a particular charge, ask!

Buy or lease: the bottom line

In the end, deciding whether to buy or lease a car depends largely on your lifestyle and habits. Buying a car and driving it as long as possible is usually the cheapest option, but that may not be realistic for you. Do the math based on your actual behavior and make your decision that way. Whichever you choose, you’ll save the most money if you opt for a car that holds its value.

And, of course, if you’re looking to insure that new car of yours, Esurance can help. Get a car insurance quote.

Today’s post comes from our friends at NerdWallet, who deliver financial tips and info to consumers in a clear, complete, and unbiased way.

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An Actuary Reveals How Your Homeowners Insurance Rate Is Determined

Here’s a little-known fact: even if you and your neighbor own the same type of home and have insurance through the same company, your rates will likely differ.

If you’re surprised by this, you’re not alone. It shocked me too — that is, until I sat down with Mark Komiskey, our senior actuary, to understand how insurers determine homeowners insurance rates. (And no, it’s not with a blindfold and dartboard.)

How homeowners insurance rates are determined

To set your rate, actuaries look at hundreds of different factors. Everything from the shape of your roof to the number of people living under it can affect how much you pay.

Because of the unique variables at play, it’s unlikely you’ll ever pay the same rate as your neighbor. In other words, your rate is as individual as you are.

The 3 main factors that influence your rate

Though insurers consider minute details when setting your rate, these 3 factors typically play the biggest role.

1. Your location

In real estate, location is everything. And the same holds true when it comes to determining your home insurance rate.

The reason is simple: your home’s location can indicate potential risk. Is it in the woods, surrounded by shrubs and grasses, making it vulnerable to fire? Is there a history of break-ins in your neighborhood or is your area safer than Fort Knox? How far away is the fire station? All of these location-based factors can paint a picture of how risky your home will be to insure.

Typically, the more risk you pose, the higher your rate will be.

2. The characteristics of your home

Obviously, the size and type of home you live in can affect your rate because these factors determine how much home insurance you need. (In general, you want to have enough coverage to rebuild your home from the ground up if the unthinkable happens.)

What may not be obvious, though, are how these specific features can impact your rate:

  • Your home’s age — The older your home is, the more it could cost to insure. Since older homes can cost more to replace, they require a higher coverage level than new homes of the same style. Plus, while old homes may have withstood the test of time, they may not have been retrofitted to withstand the test of a disaster.
  • Your home’s structure — The type of construction material used is another contributing factor. Masonry-brick homes, for instance, withstand wind better than wooden-frame ones (hey, even the Big Bad Wolf can’t blow it down). On the other hand, frame homes can fare better in an earthquake.So if you live in a wooden-frame home in Tornado Alley, you could be deemed riskier to insure. But move that same home to California where earthquakes are the norm and you could score brownie points.
  • Your garage — It’s true, size matters (at least when it comes to your garage). Bigger garages are more likely to be broken in than smaller ones, because they generally hold more stuff. So if you have a 3-car garage, your risk for theft is higher than someone with just a 1-car garage. And in insurance, more risk usually means higher premiums.

3. Your insurance history

Psychologists often believe that “the best predictor of future behavior is past behavior” — and so do most insurers.

To predict how likely you are to file a claim, insurance companies will typically look at your property insurance record (homeowners, renters, or condo). Are you the type to file a claim for small occurrences? Do you only do it in the worst-case scenario? Or do you fall somewhere in the middle?

Strange as it may sound, if you have zero claims but have had coverage for years, you could get a more favorable rate than someone who filed 3 claims in a 2-year period. The reason is simple: insurance is meant to protect you from uncontrollable catastrophic events like fire, theft, and severe windstorms. Frequent, small claims for preventable occurrences can indicate that you’re riskier to insure.

How to improve your homeowners insurance rate

There isn’t a one-size-fits-all approach to improving your rate. But, generally, anything you do to lower your level of risk to an insurer can be beneficial. This can mean replacing a worn roof with a hail-resistant one, updating an ancient electrical system, or adding deadbolt locks (if you don’t already have them).

It’s also smart to shop around every now and then to see if you can get a better rate. If you live in a state where Esurance offers homeowners coverage, get your free quote to see if you could save.

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Tips for Cycling in the Rain

Spring is finally here, which should mean rain instead of the epic snowstorms of this past winter. Even the parched West Coast is finally enjoying some much-needed showers. So, this seems like a good time to talk about how to comfortably and safely ride a bike in the rain.

Since most cyclists have just one bike that serves many purposes, here are a few safety tips and gear suggestions to help you prepare for a wet commute.

Tires

The easiest and first thing you can do before heading out into the rain is to simply let some air out of your tires. Don’t drain them by any significant factor — just let out enough air so that your body weight causes the part of the tire touching the road to swell out a bit. This increases surface area contact, which is crucial to improving traction on slippery surfaces.

If you have a mountain bike, which uses much lower air pressure to begin with, you’re probably fine not letting any air out at all. And if you notice your tires are threadbare or significantly worn down, replace them before you hit the road.

Fenders

If you really want to avoid getting soaked, fenders should be your next step. There are plenty of affordable, clip-on varieties available. To get the right fender for your bike, you’ll need to know your tire size first (you can find it on the sidewall of the tire). Once you know that, you won’t have any problems finding reliable fenders online or at your local bike shop.

PRO TIP: There are a number of flat-pack one-size-fits-most rear fenders available. These are nice because you can keep them in your bag at all times. The Full Windsor Quick Fix fender is a great one.

Brakes

If you ride a fixed-gear bike (with no brake), you might consider giving yourself a little extra security by temporarily installing a brake, particularly if you live in a hilly city like San Francisco or Pittsburgh. Skid-stopping on wet streets is almost completely noneffective, and even gingerly managing your speed with reverse resistance becomes less reliable on slippery asphalt.

If you’re unsure about installing a brake and lever, it’s best to ask your local shop, especially since handlebar diameters vary so much. If you know how to do it yourself but your fork’s not drilled for a brake, there are bolt-on solutions available from Dia-Compe.

Rain gear

Now that your bike’s all set, let’s talk about you! Keeping yourself dry on a bike in the rain is a challenge, but not an unattainable one. A raincoat is paramount, of course, but if you don’t want to change pants when you arrive at your destination, you might also consider buying an entire rain suit.

Don’t feel intimidated by the myriad choices at bike shops or sporting supply stores — it’s not a fashion statement, it’s a utilitarian solution. Plus, you can find PVC rain gear for under $20 online. Just remember that rain gear is far less breathable than street clothes, so you might sweat more in it.

When it comes to your head, hands, and feet, there are plenty of hats, gloves, and booties that will help. But in my experience, this is where you may find it easier to fix the problem rather than trying to prevent it. My advice? Just pack an extra pair of shoes and socks, a small towel, and a comb (or other hair products) in your bag.

Bags

Speaking of bags, if yours isn’t waterproof, you could put all the contents into a garbage bag first and then put the garbage bag in your bag. This provides instant, inexpensive waterproofing.

When you’re ready to commit to a cycling-specific bag, know that while they can be expensive, almost all of them are waterproof. Chrome, Mission Workshop, and Timbuk2 all make incredibly strong bags that will keep your belongings bone-dry thanks to truck tarpaulin linings and roll-tops, They also offer a variety of other inserts and compartments for your tablet, laptop, and other technology.

Riding safely

Once you’re on the road, go slower, anticipate decreased visibility and increased stopping times and distances, stay visible (lights, lights, lights), and above all else, take corners with extra care.

Painted stripes on the road (such as crosswalk indicators) and metal surfaces (like manhole covers or streetcar tracks) are as slick as ice when they’re wet. Talk to any longtime cyclist or motorcyclist and they’ll probably have a story of trying to corner on street paint or metal and going down. Don’t let yourself make the same mistake.

Now, when someone reacts with disbelief that you rode your bike despite a downpour, you can just smile and say, “Meh, no biggie.”

And hey, while you’re protecting your bike from the rain, make sure you also protect it from theft with renters or homeowners insurance.

Rubber-side down!

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Crash Rates for Older Drivers are Dropping

America’s population of seniors has been growing over the last several decades. As of 2011, there were more than 41 million people in the U.S. aged 65 and older, compared to 35 million in 2000. And because seniors are keeping their licenses longer, there are more older drivers on the road than ever.

Initially, the Insurance Institute for Highway Safety (IIHS) feared that this trend would increase road fatalities — not because older drivers aren’t safe drivers, but because aging often brings a loss of bone and muscle strength, which means greater vulnerability in accidents.

But those fears may be groundless. According to the latest IIHS study, today’s senior drivers are involved in fewer crashes (and have lower instances of serious injury or death resulting from a crash) than those in the mid-1990s.

Fatal crash rates among older drivers have decreased

Crash fatalities among drivers aged 70 and older fell 42 percent between 1997 and 2012. (Tweet this.)

And results for nonfatal crashes showed a similar decline.

Let’s look at the 2 main reasons for this.

1. Seniors are healthier

Older folks are fitter these days, showing fewer of the impairments that can be dangerous behind the wheel. And better health may mean their risk of serious injury is lower if they’re involved in a crash. They also tend to have better access to emergency care.

Though older drivers often limit their driving if they’re concerned about their abilities, the study showed an increase in miles driven annually. And that means today’s seniors are remaining confident they’re mentally and physically up to the task.

2. Cars are safer

New safety features have made cars safer for everyone, but some improvements have particularly benefitted older drivers and passengers.

Seat belts. Some earlier seat-belt designs put seniors at risk of rib injuries. But updated versions reduce those risks through features like belt pretensioners (which tighten the belt during a crash, putting the occupant where they’ll be most protected) and load limiters (which loosen the belt if the force becomes too great).

Airbags. Front airbags protect people of all ages pretty equally. But side airbags that shield the head and torso are especially effective for occupants aged 70 and over, reducing fatalities by an estimated 45 percent.

Crash-avoidance technologies. Some new features can help drivers (older and otherwise) avoid accidents altogether. The Highway Loss Data Institute found 10 to 14 percent fewer damage claims from vehicles with forward collision avoidance systems and autonomous braking.

How to be a safer senior driver

If you rely on the convenience and independence of a car, you probably aren’t eager to give it up. Here are some tips for staying safe as you get older:

  • Start a fitness routine to improve your strength and flexibility
  • Have your eyes and hearing checked regularly
  • Go over your medications with your doctor to prevent drug interactions or side effects that could impact your driving
  • Sign up for a certified drivers safety course through the AARP or your local DMV (bonus: it could earn you a car insurance discount)
  • If you’re feeling less confident behind the wheel, limit your driving to short trips (added bonus: driving fewer miles could also reduce your insurance rates)

5 ways to tell if you (or someone you love) should stop driving

Statistically, older drivers tend to be conscientious drivers — they’re more likely to use their seat belts and less likely to drive in poor conditions or after drinking. But even the most cautious drivers can find themselves impaired by decreased vision, slower reaction times, or other changes that come with age.

Maybe you’re an older driver concerned about your abilities, or maybe you’re starting to worry about an older family member. Here are 5 signs that a driver should consider hanging up their keys:

  • Several traffic citations, fender benders, or close calls in the past 3 years
  • Getting lost more frequently, even on familiar routes
  • Difficulty turning their head to check for traffic at intersections or when changing lanes
  • Family members expressing concern about their driving
  • A tendency to respond more slowly or drift into other lanes

If it’s time to stop driving, there are lots of ways for seniors to stay mobile. The Eldercare Locator can help you find transportation options in your area.

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5 Seriously Cool Gas Stations Across the U.S.

No doubt about it: gassing up your car is a pretty mundane chore. Twist cap, swipe card, press nozzle, and repeat. After awhile, even the gas stations themselves start to blend together. And wherever you go, you feel like you were just there.

Well … almost wherever you go. There are a few gas stations left in this country that know how to take the humdrum out of the oil drum.

Here are 5 seriously cool gas stations throughout the U.S. — ones that make sure filling up is never a cause for feeling down.

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Jack Colker’s 76

Location: Beverly Hills, CA

What’s cool about it?

Utilizing Googie architecture — a style native to LA that features, among other things, outer-space themes — this fill-up spot manages to revive the muscle-car era while glimpsing a galactic future.

The open windows and kitschy neon make you want to park and order a root beer float. Meanwhile, the flying saucer of a roof would cause Doc’s DeLorean to feel like it overshot its comfort zone by a few years.

If you think these aerial notes feel a bit wacky (and they do, in the best way), they make more sense when you find out the roof was originally designed for LAX airport.

R.W. Lindholm Service Station

Location: Cloquet, MN

What’s cool about it?

Much like phone booths and boiler rooms, gas stations are typically architectural afterthoughts. That is, we assume great designers save their “A” material for bold skyscrapers and avant-garde museums (rather than, you know, the place where we reheat chalupas).

Not so with this hidden gem. The R.W. Lindholm Service Station is the one and only pumping post designed by Frank Lloyd Wright. Who knew “create cool gas stations” made it onto his prestigious to-do list?

Resembling a forest hideaway rather than a fuel stop, it features a lush green canopy, cypress wood, and radiant heat. It also sports a glass observation deck for those who just want to chill out and appreciate their surroundings.

Shell Service Station

Location: Winston-Salem, NC

What’s cool about it?

Historical significance and sheer oddness make this a pit stop-worthy pump. It’s historical in being the last of the Shell Company’s 8 original stations (so fueling up here kinda like buying Twizzlers from the first Walgreens).

It’s odd in the sense that, well, let’s just say the “Shell” name used to be quite literal. Standing inside this bright yellow husk, you feel as if you might wash ashore and have kids pressing you to their ears any minute.

Teapot Dome

Location: Zillah, WA

What’s cool about it?

This service station was constructed as a reminder of the Teapot Dome scandal from the 1920s, which dealt with the misappropriation of key oil fields under President Harding’s watch.

But, on a more adorable note … it’s a giant teapot!

Helios House

Location: Los Angeles, CA

What’s cool about it?

As a green company, we’d be remiss if we didn’t mention this greenest of gas stops. Helios House does its best to replenish the energy we use on fuel in every way it can.

Catch basins that prevent ocean runoff, a recycled-glass exterior, and an actual green roof (with plants and everything) are just a few of the awesome features. Shoot, all the ingenuity at Helios House is almost enough to make you glad the needle’s on “E”! (Almost.)

Let Fuelcaster™ point you toward lower gas prices

If you can’t quite make the journey to one of these cool gas stations, that’s understandable.

The good news is we can help you find stations where the gas is cheap!

Fuelcaster, a new website from Esurance, predicts whether gas prices will rise or fall tomorrow and even shows you where you can find the lowest prices in your area. Because let’s face it, the coolest gas station is the one where you get the best deal on gas.

Learn more about Fuelcaster and start predicting the future.

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