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QUICK FIXES TO LOWER YOUR CAR INSURANCE

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Car insurance is something we all have to pay for, no matter how much we despise it. However, it’s not all bad. There is light at the end of the tunnel, as there are several things you can do to reduce your car insurance payments. We have teamed up with RAC Shop to put together a simple list of quick fixes on how to lower your car insurance legally.

 

Shop Around

Never take the first quote you find to be the only price that you should be paying for your insurance. Whether you’re looking for new insurance or you are looking to renew your current insurance shopping around and comparing car insurance prices can save you a significant amount of money. This also helps you find the best possible deal. Staying loyal to your current insurer can, in some cases, be a hindrance and could lead to paying more and more each time you renew your insurance.

 

Pay Up Front

Once you have found an insurer that you are happy with and have found the best deal for your vehicle, it is always a far better idea to pay in full upfront rather than in instalments. When you sign up to pay monthly, insurers are far more likely to charge you interest on top of your base fee. Which can sometimes be up to around 30% APR, which is precisely what you want to try and avoid.

 

Pay For What You Use

People may think that you are likely to get the best deal when paying for a third party fire and theft policy rather than a comprehensive one. However, the team at RAC Shop would recommend always going comprehensive, which can be cheaper than a lower level protection plan. Some insurers associate third party fire and theft policies with high-risk drivers that are looking for the most affordable option and would therefore automatically charge you more as a result.

 

Avoid adding modifications to your car

It may be tempting to get carried away with adding modification after modification to your vehicle, however even changing the simplest of things such as upgrading your stereo or speakers can increase rather than decrease the price of your insurance premium. This is because the more modifications you make to your vehicle, the more desirable your car is to thieves. Modifying any part of the car’s body or engine, for example, are something to be avoided, as vehicles with these modifications incur higher insurance premium prices as they tend to be driven by younger drivers who are at a higher risk of crashing.

However, not all modifications mean your insurance price will skyrocket. Car alarms and dash cams added will reduce your insurance price. Some insurers even offer up to 10% off your insurance if you fit a dash cam to your vehicle. You are improving safety whilst decreasing your payment. What more could you want? Remember, it is essential to declare any modification you make to your car for any claims that are made not to be rejected.

 

Add a Black Box

A black box is a small tracking device that is widely used especially with young or new drivers, which allows insurance companies to see how well you drive and as a result, can significantly reduce your insurance.

Although adding a black box has an abundance of perks, it can also cause limitations to your driving. For example, you may be penalised for driving later at night. The other thing to note is that you will be paying for the black box every month. This allows the insurance company to re-evaluate your driving each month, where you can be rewarded with lower insurance prices for good behaviour or punished with a higher price if any rules are broken, or they deem you’re driving unsafe.

 

Maintain a Good Credit Score

Maintaining your credit score has seen many people reduce their insurance premium. Most insurers will use your credit information to help determine a price for your insurance premium. It has been researched and proven that people who manage their credit will tend to have fewer claims. This can be done by ensuring all bills are paid on time, obtaining only the amount of credit you need, and keeping credit balances as low as you can. All can help reduce the insurer’s policy prices.

 

Reduce Your Mileage

Regularly reviewing and considering how much mileage you are realistically likely to use will ensure you are paying the correct amount. If you are looking at ways to reduce this price, the less mileage you rack up, the lower your premium price will be, whereas the higher the mileage, the higher the price. If you are overestimating how much your annual mileage will be, you are effectively, just throwing money away. Keeping track of your mileage each year will make things easier when estimating your yearly mileage the next time around. Be careful not to underestimate, however, as this may end up costing you more if you need to claim on your insurance.

Top 10

DOGECOIN MADNESS

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by Nathalie Janson, Associate Professor at NEOMA Business School

 

After the unstoppable increase of Bitcoin (BTC) since January – it added 10 000$ to its price every month since January reaching 60 000$ in April 2021  – it is now the turn of the Dogecoin to be the next cryptofrenzy.

This crypto created in three hours by Billy Markus as a joke to make fun of the Bitcoin community back in 2013 had no specific use except federating crypto geeks sharing the same sense of humor. Its capitalization quickly reached 60 million USD back then. This is why until Tuesday, April 13th 2021, its price was closed to 0 since cryptos value derives from their usefulness.

The Dogecoin belongs to the family of Altcoins using proof of stake to validate transactions – more flexible and fast compare to Bitcoin and Ether based on proof of work – but essentially not as decentralized and secured.  So far Dogecoin has mainly been used for  tipping creators of content or more interestingly to noble causes. These include raising funds for the bobsleigh Jamaïcan team to send them to the Winter Olympic Games in 2014, paying back victims of Dogecoin hack in the early days after its creation,  and raising funds to provide access to drinkable water in Africa.

 

Dogecoin… a billionaire maker joke

How comes the DogeCoin price surged in such irrational manner? Is this move another proof of market madness? A sign that we might be close to the next burst of the crypto bubble? Who knows? … Why is it so difficult to understand the pricing dynamic of cryptocurrencies?  You might think that what we experienced is the paroxysm of futility. In a week, some Dogecoin holders become billionaires, the price of the Dodge coin increasing from almost 0 to 43 cents at its highest. How mad that sounds? Similar to what happened to Gamestop, we are dealing with a community with a strong identity – the Dogecoin joined by new members like Snickers – the sweet bar and more importantly by Elon Musk – who wants to set a record and claiming April 20th being DogeDay with the clear goal to push Dogecoin up to $1. They are encouraging each other to buy more of the coins. Given the limited size of the market dominated by “whales” – five “whales” are said to control 40% of the market – the increase in purchases of Dogecoin leads to significant rise in price given the low liquidity.

The Dogecoin case is an emblematic case showing how subjective value is in economics. Indeed, like Bitcoin, the price of Dogecoin only depends on its acceptance that in itself depends on the size of its network that suddenly increased.

Why now? First, Elon Musk started to show his interest in the Dogecoins by tweeting about it. Why does Elon Musk opinion matter? Because he symbolizes the success story of a man who is a visionary. After all, if Elon Musk invests in Bitcoin and supports Dogecoin it must be for a reason, and he may be right like he has been right about the industrialization of electric cars as the success of the Tesla demonstrates. He performs a role similar to leading investors in traditional financial markets like Warren Buffet.

Secondly, the Coinbase initial public offering contributed to a rally in the cryptocurrencies market, with no exception for the Dogecoin. Over the week-end, the major cryptocurrencies – BTC and Ethereum dropped for technical reasons due to a sharp decrease in the hash rate after an electricity shortage in the Xinjang province in China. When that happens, it usually benefits altcoins.

More broadly speaking, the crypto market is frenetic since the beginning of the year. This frenzy is a symptom of a global economy that is still suffering from severe restrictions in some activities but at the same time is also experimenting acceleration in others. Combined with overgenerous monetary policy feeding liquidity in search of profitability away from traditional markets because of low interest rates and over rated stock markets, this is a perfect combination for investors to try anything new to boost their portfolio return if you add on the top of that, growing concerns about the return of inflation in the US.

In this context how long will the Dogecoin rally last? This essentially relies on the determination of its fans to support it but after a while, it will need to be more than a symbol!

 

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Wealth Management

WHY COMPLICATED INCOME STRUCTURES SHOULDN’T PREVENT HIGH NET WORTH INDIVIDUALS FROM INVESTING IN PROPERTY

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Mike Coates, Founder and CEO of Commercial Expert

 

An investor’s preference is usually to split their investment across different funds, in a varied and balanced way.  Research has shown that the most popular investments made by high-net-worth individuals (HNWIs) vary between stocks, shares, hedge funds, private equity, and real estates (residential and commercial properties).  The allocation of funds is predominantly governed by taxes, goals and individual preferences.

However, in the past decade, HNWIs have encountered barriers to accessing finance because of the way lenders approve loans.

 

The barriers facing HNWIs

In the aftermath of the GFC of 2008, a notable trend to emerge was lenders seeking to minimise the level of risk to which they were prepared to expose themselves. This was achieved through adopting a more stringent selection criteria when it came to assessing an individual’s financial situation before approving a loan.

As a result of this change in lending behaviour, securing finance has ultimately become more difficult across the board, including, ironically, HNWIs, whom you might expect would be unaffected. The reason HNWIs might struggle is because the new lending culture favours those with straightforward finances, and a regular income.

However, for HNWIs, this is not usually the case.  For example, a HNWI’s portfolio could be split across various asset classes and jurisdictions; their income may be irregular or derived abroad (including off-shore tax-havens); many HNWIs are expats and may be receiving income in different currencies.  When these factors are considered, it’s easy to see why HNWIs might be classed as ‘high-risk’ in the eyes of some lenders.  As a result, many HNWIs have struggled to secure funding or even a credit card.

Consequently, for HNWIs looking to take advantage of the current low borrowing rates, as well as the tax relief by securing finance, they will be better off finding a reputable financial adviser or broker who will take a more holistic view when it comes to assessing their financial situation.

Financial advisers have established relationships with a wide portfolio of lenders who aren’t just the regular high street banks and building societies. There are certain lenders who are used to dealing with clients that have huge property portfolios and are experienced in calculating the stress levels on existing portfolios. They are able to use different assessment criteria in order to approve loans, even where applicants have a low debt service coverage ratio (DSCR).  They may also request to see your SA302 (self-assessment tax returns for the last 4 years), tax overviews and accounts in order to gain a deeper understanding of your income structure. Where people have deferred tax, this also gets taken into consideration.  At the end of the day, it’s about having your foot in the door with the right lenders, that helps to determine your ability to secure a mortgage as an HNWI.

 

Reasons to invest in property

Compared to private equity and hedge funds, real estate investment is by far the least risky option. Real estate is safe and is set to lead us to recovery following the aftermath of Covid-19.

What we witnessed during the global pandemic was that contrary to early predictions, rental prices remained relatively stable and property prices rocketed. The UK house price index, published in January 2021, revealed that the average house price increased by 7.5% year-on-year. i   Initially, the stamp duty tax relief may have been attributed to the increase, however, as the tax relief deadline approaches, there doesn’t appear to be any sign of a slow-down.  This indicates that other factors are underpinning the rise. Many believe that lockdown has forced people to reassess their priorities, with an increasing number of people desiring more generous living and outdoor space in areas away from cities.

 

What properties to invest in

As it currently stands, almost 60% of HNWIs have revealed that they invest in real estate. ii The properties are usually where they themselves reside, or in “offshore” areas where they enjoy going on holiday.  If properties are situated in tourist hotspots with nearby beaches or mountains, they are often rented out to tourists during peak holiday seasons and available for their own holiday use during off-peak times.

 

Final thoughts

If you want to invest in properties either in the UK or abroad, don’t be deterred by previous failed attempts at securing finance. It is a good move to appoint a specialist commercial finance broker with access to the whole of market, who can undertake all the research required, and recommend a suitable lender and product.

There are only a handful of lenders who are equipped to deal with HNWIs, with complex income structures, therefore it’s crucial to make sure you’re speaking with the right people.

 

References:

i https://moneytothemasses.com/owning-a-home/house-prices-2/what-is-going-to-happen-to-uk-house-prices

ii https://www.fool.com/millionacres/real-estate-investing/articles/what-are-high-net-worth-individuals-investing-in-now/

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