Your car is watching you–and that might be good news.

Your auto insurance rates could soon be set based on how you, personally, drive–not on your statistical risk.
General Motors Co. (GM) has launched an auto insurance program with its OnStar subsidiary to match data on driving patterns and usage to insurance costs. Tesla and Ford have also announced initiatives, according to Claims Journal.
Right now, insurance companies use criteria such as age, gender, neighborhood and/or credit scores to set insurance prices. Consumer advocates have found this unfair because a good driver could live in a neighborhood that is unsafe and have a lower credit score.
Statistically, a teenage boy is the world’s worst auto insurance risk and insurance rates reflect this. But with usage-based insurance pricing, even a teenage boy might be able to demonstrate he is a good risk.
The mechanism of future insurance pricing will come from telematics–devices that collect real-time information on driving patterns and use. According to JD Power, demand for insurance based on telematics has increased during the pandemic as customers, working from home, thought they could save money on insurance.
What that could mean for good drivers and drivers who don’t drive much is lower rates. Bad drivers would get higher rates. Depending on how the technology is deployed, drivers might get real-time feedback about how they are doing, according to the Insurance Information Institute (III). That could be like having a permanent back-seat driver who is always right. But drivers do respond when they have incentives to drive better, according to iii.org.
A study by Willis Towers Watson showed that, in commercial fleets monitored by telematics, crash rates fell by 80 percent.
But will drivers have privacy concerns, or will they resent having their every driving move monitored? Another survey by Willis Towers Watson suggests not. Resistance to the idea of cars monitoring driving is low, about seven percent.
GM will use data from its on-board concierge service, OnStar. The service helps drivers in emergencies and with navigation, but it also collects data on driving patterns. It takes special note of hard braking and acceleration.
Tesla’s initiative hasn’t yet launched.
Ford Motor Company has teamed up with Allstate Corporation to allow customers to share driving data.
GM says its OnStar program has provided the company with more data from connected vehicles than any other carmaker, as quoted in Claims Journal.
The company’s insurance offer will start in Arizona and use braking, acceleration, and general usage data to help set insurance rates. The program is set to expand nationwide using more data, including tire pressure, lane keeping and automated braking. More use of connected car data could be used if regulatory hurdles can be overcome.

Are you uninsured or under-insured?

Life comes at you fast. In your youth at the peak of your health, in middle age, at the height of responsibility, what if an accident or illness took you off the family map? We all know it can happen and few think it will.
As a matter of fact, about 40 percent of people have no life insurance at all. Of the people with life insurance, about half are underinsured.
But the cold fact remains: What happens to your family if you die? Will they be able to afford the house? How will their lifestyle change? Who will support the family? How will they support the family?
Life insurance answers many of those questions — and it answers them affordably.
The least expensive form of life insurance — term insurance — is very inexpensive. A healthy 30-year-old can get $250,000 of insurance for about $15 per month. The earlier you buy term insurance, the less expensive it is and many policies don’t even require a health check.
Many people have life coverage at work, but this should be reviewed because it may not be enough. Primary breadwinners should have coverage equal to six to 10 times their annual incomes. Term policies usually cover only your working life.
Whole life is another kind of life insurance. Unlike term policies, it covers you for life, as long as you make payments. It also has the benefit of building cash value. Although most experts say it shouldn’t be considered an investment, if you get a big policy at a young enough age, and keep it until retirement, you could have a nice nest egg to tap into at retirement. Whole life policies can also be cashed in by your Power of Attorney for some part of the face value if you enter a nursing home, for example. It could be considered a small inheritance. Whole life policies usually require a medical exam and are unlikely to cover smokers.
Many websites compare costs of life insurance options.

Does a 15-year mortgage cost twice as much per month as a 30-year loan?

Paying a loan in half the time does NOT mean making double payments. In fact, many homeowners are surprised at how little they need to pay on a shorter length loan.
For decades, the 30-year mortgage was the standard when it came to financing a home purchase. But, in recent years, the 15-year, fixed-rate mortgage has become popular for a couple of reasons.
One advantage of the 15-year fixed is that a shorter term can mean lower rates. Today’s interest rates are historically low at around 3.9% to 4.5%, so they aren’t the make-or-break issue they were, say, in the 1980s when the interest rate could easily top 12%. But interest rates count.
Another advantage isn’t as easy to see. On a 30-year $100,000 loan financed at 3.9%, the payment would be a very affordable $473. On a 15-year loan, the payment rises to $736, still likely affordable.
So, why not just take the lower payment for 30 years? Because nestled within that lower payment, is a big stack of money. On that $100,000 loan over 30 years, you pay nearly $70,000 in interest. That’s real money. On the 15-year note, you pay less than half of that: about $32,000.
The question for the buyer is whether to shop around for a lower-priced property overall (in order to make the 15-year numbers work), or buy something more expensive with features that make the 30-year mortgage more attractive.

Tips for managing contractors

As much as we love our home renovations, there’s no denying that the process can nevertheless be a stressful one. Some of that is due to the myriad of details, ranging from large choices like siding color and style to the smallest, like door stops or light covers.
And a good chunk of the stress can come from working with contractors. From personality styles to deadline stress, the homeowner-contractor relationship can be a tricky one.
To keep a project running smoothly and to reduce stress, consider these tips for working with a contractor:

  • Communicate clearly and in detail. From the first walk-through to the final check, make sure you are clear in your expectations and goals. Put it all in writing, from the paint finish and number of coats to the projects a contractor needs to complete before getting that next check.
  • Speaking of milestones — never get ahead on the money. In other words, pay the contractor enough to cover materials and some of the early work, and then draw up milestones that serve as a carrot. This is fair to both sides: the contractor isn’t working for free, and you aren’t in a position to lose money should a worst-case scenario happen, and the contractor stops showing up.
  • Get referrals and visit construction sites. Any reputable contractor will gladly hand over referrals and welcome you to their job site. This gives you a look at finished projects as well as their style with in-progress work.
  • Get multiple estimates. This may not be necessary with a small project — you probably don’t need three estimates for someone to install a toilet — but you should always get estimates from multiple contractors for mid-sized to large projects. Not only do you get a better idea of the price, but you could be surprised at how differently contractors may visualize the same job.

Buying your first house

Buying a new house is easy: Dive into some websites. Pick a house you like. Press “Add to Cart” and 10 minutes later you’re picking new furniture.
…Nah. Doesn’t work that way.

Like all pivotal decisions in life, the fun part is rarely the most important.

The best way to buy a home is to start answering the dull questions first.

Start by building a basic financial profile about yourself: First, pull your credit report and get your credit score. You can do this at freecreditreport.com or at other sites, such as creditkarma.com. If your score is under 620, you’ve got some work to do on your credit. Start by making absolutely sure every account is paid on time, every time, not one day late. During your credit building period, make sure you don’t apply for loans on cars or anything else. Do everything you can to pay off any loans or credit cards you may have.
With a credit score of at least 620 in hand, start gathering documents that show how much money you make and what your expenses are. You’ll need pay stubs and a list of your bills.
You will also need cash.

A good rule to remember: The more cash you have, the better the terms of any deal you make. You’ll have more flexibility and loans will cost you less, especially if you also have a high credit score.
But how much is enough? Down payments vary depending on the type of loan. With an FHA loan, for example, you might need no more than 3.5 percent of the selling price. But you’ll also need some cash available for closing costs — maybe up to 2.5 percent or more.

One of the best places to start the process is with a lender. Gather your financial information and chat with your bank or credit union to find out how much house you could possibly afford. They will tell you how much cash you will need. Once you have the cash, get a pre-approval from your lender. Then the fun part begins. Visit some websites and find your best home.

Good idea: Start small with a home, buying one that is easy to afford with a short mortgage. Then, add some elbow grease to fix it up to increase its value, while paying off the mortgage. Soon, you’ll have value in the house and you can sell with more money to put down on your next house. This is the way wealth is built over time.

Interest rates, production costs, and regulations have made new cars cost more.

Interest rates, production costs, and regulations have made new cars cost more.

According to Experian, the average consumer pays $495 for a new car loan. That is more than the $447 they paid in 2008. The average interest rate in the third quarter of 2016 was 4.69 percent, compared to the higher rate of 6.14 percent in 2008.

Consumers were financing more car in 2016 than in 2008 — up to an average of $30,022 compared to $24,600 for 2008.

The cost of cars is also higher. In fact, according to Autotrader, about 3 million new cars should have been sold last year, just looking at population growth.

Part of the problem, says Heritage.org, is that new regulations press car prices up, just as new technology actually pushes prices down.

The price of a new vehicle is more than $7,000 higher than 2008, Heritage says. It points to new, costly fuel economy standards that are driving prices up.

Prices are also under pressure at the dealer level. According to Automotive News, franchised new-car dealers in the U.S. spent a combined $3.2 billion in 2012 to meet 61 new federal regulations. Those costs are passed along to consumers.