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Comprehensive Car Insurance Cheaper Than Third Party Cover?

If you’re planning on driving a new car using cheap car leasing or personal contract hire, it may be a condition of your deal that you take out comprehensive insurance. If there car doesn’t belong to you then your car lease company will want to know that the vehicle is adequately protected in the event of theft or an accident.

For years, many customers have seen this as a disadvantage of leasing a car. That’s because drivers generally assume that comprehensive insurance is more expensive than third party cover, and so pushes up the total monthly cost of a car lease. However, new research has found that, for many people, comprehensive cover is actually cheaper than third party and can save you money. Keep reading to find out more.

Young people pay less for fully comprehensive insurance than for third party cover

Fully comprehensive insurance covers damage to other cars as well as your own. Third party only covers other drivers if you are to blame in an accident and your policy will only pay out to cover the third party.

It follows, therefore, that comprehensive car insurance – often a condition of car leasing or contract hire – would be more expensive than third party cover. However, research from a leading financial website published in the Daily Telegraph has found that most people under the age of 40 will find it cheaper to take fully comprehensive insurance rather than third party cover.

The analysis shows that an 18 year old driving a Ford Fiesta choosing third party only cover was quoted 146 per cent – or about $2,000 a year – more for their insurance than if they had opted for a fully comprehensive policy.

The Telegraph reports that this trend continues until age 40; on average a 20 year old could save about $500 a year opting for fully comp and a 25 year old will find it about $75 cheaper on average.

Peter Harrison, car insurance expert at the website who commissioned the research, said: “Comprehensive cover is often the cheapest for most age groups, as well as offering the highest level of protection. Young drivers should pay particular attention to the policy terms and conditions and take into consideration how they would fund the cost of repairs should they be involved in an incident their policy doesn’t cover.

“You should also check the excess levels on your policy as some insurers may uplift this amount based on the age of the driver – a high excess could add hundreds to the cost of a claim.”

Comprehensive cover can be cheaper as it suggests that you are a more responsible driver. Because young drivers in particular ask for third party cover to cut their costs it makes insurers suspicious of the type of drivers asking for this cover and they raise their premiums accordingly.

A spokeswoman said: “Typically younger drivers will purchase a lower value car and in the past would have insured this under a third party policy as this used to be the cheapest option. Since insurers have become aware of this practice, they have made it so a fully comp policy is cheaper for a young driver as this not only protects the driver in the event of a claim, but also the insurer.”

Many car leases and contract hire plans will insist that you take out comprehensive insurance. As well as offering low cost finance for your car this condition could also now be saving you money on your insurance.

Author Bio: Vincent Hill is Marketing Executive at First Vehicle Leasing. First Vehicle Leasing provides
best chevrolet car leasing solutions to all over United Kingdom.

7 Innovative Ways to Cut the Cost of Car Insurance

Driving a car has never been so expensive and aside from the cost of the car itself and the cost of fuel, insurance is a significantly large additional sum. In fact, if you’re a young driver, you may even find that the cost of the insurance is more than the cost of the car – a pretty daunting issue.

However, though it will always be an additional cost and potentially an expensive one, car insurance is a must and so learning how to cut costs is a significant benefit you and something of a financial must in the current economy. So, let’s take a look at how to slash the costs.

Shop Around

First and foremost, we would certainly advise you to take a good look around and to shop about for the best deals. One thing we would say is to be cautious and to use a number of comparison websites and also check prices for those who aren’t on these sites too. Also, be aware of the services on offer as not all insurances provide the same policy exactly and same levels of cover.

All Drivers

Don’t add all the drivers to your policy, especially if the drive the car very irregularly and don’t tend to need the car very often. This can significantly increase the cost too.

No Claims

The best overall way to cut insurance is a long term no claims bonus. This is the best way to cut costs and it’s possible to get a 90% discount because of this factor. No claims bonus differ between insurers and you should delve into the criteria for each potential insurer to save.

Excess

Taking more of an excess will also cut insurance costs and if you agree to pay more voluntarily then you will save on your insurance. Obviously, you will have to pay for as much as this excess is and may be a factor for consideration.

Devices

There are all sorts of devices and tracking systems that can be used to shave money off insurance. For instance, a tracking device for young drivers that measures speed and other information can be a great way to cut costs. Although, it does mean you will have to behave within the confines of the rules of the road at all times or risk paying more.

In addition, items such as immobilisers and alarms also reduce the risk of a car being broken into or stolen and so reduce the cost of insurance.

Mileage

Obviously, the fewer miles you travel, the less risk you have of crashing into something or being involved in a prang. Reducing the amount of mileage you do and placing a limit on it can save you a significant amount. However, be certain that you don’t reduce it by too much and end up risking invalidating your premium.

Parking

The place you park your car has a big weight on the cost of insurance and so the higher the risk, the higher the cost. If you can garage your car then do and try to avoid on-road parking because this is the most expensive and will raise premiums.

Of course there are all sorts of other variables, such as whether or not the car is a contract hire auto, whether there are provisional drivers on the insurance and even things like post codes and addresses. However, these will go a long way to cut the cost of your insurance.

These are just some tips on lowering insurance and cutting down on auto costs.

Six Simple Steps for Setting Up a Trust in Australia

In Australia, trusts are used to shelter a person’s assets. The person setting up the trust is called a “Settlor.” Discretionary trusts are some of the most popular types of trusts out there, and they’re not too difficult to set up. You basically have three parties involved in the transaction – you (the Settlor), the Trustee (the party who manages the trust), and the beneficiary (the party who receives the benefit of the trust). Here’s how you get things set up:

Step 1: Decide On A Purpose

Make a decision about the purpose for the trust and what the initial assets will be. Since trusts require a contribution to get started, you’ll have to put up some real property, money, or personal property to open the trust. Don’t worry about how much to put in at first. You can always make additional contributions once the trust is set up.

Step 2: Name Your Trustee

Make sure the person you name as a trustee is trustworthy. This is the person who will be managing the assets in the trust. He should be someone you can trust, is good at managing money and property, and is reliable. Do not name yourself. You can’t be the trustee and the Settlor. It may invalidate the trust contract – prompting a court to challenge the validity of it. In general, courts in Australia see this sort of thing as a “sham trust,” since trusts inherently have three distinct parties, not two.

Step 3: Name The Beneficiaries

You must have beneficiaries for the trust to be valid. The beneficiaries may be anyone, but keep this in mind: Beneficiaries have no legal right to any of the trust assets unless those assets are distributed by the Trustee.

Usually, Trustees and Beneficiaries are kept at an “arm’s length.” This means that the Trustee and the Beneficiaries generally don’t know each other, don’t have a prior business relationship with each other, and do not have an incentive to benefit each other – neither has an equitable or any other type of interest in the other party.

The Trustee is charged with acting in the best interest of the Beneficiary, but he must maintain objectivity and the principle of Prudence. In other words, the Trustee must manage the assets of the Trust in the same way that any prudent man would – eliminating unnecessary risks with the assets, and minimizing other adverse risks as best as possible while preserving the integrity of the assets and the Trust itself. With that said, Trustees have a lot of discretion when it comes to management and distribution of assets which are only limited by the Deed of Settlement.

Step 4: Set The Contents of the Deed of Settlement

It’s up to you, as the Settlor, to outline the basic functions and limitations of the Trustee. You must authorize which restrictions, if any, are placed on the Trustee. This includes any restrictions on asset management and distribution.

The Deed should specify the original trust assets, name the Settlor, the Trustee, and the Beneficiaries. It must also specify the rights and duties of the Trustee, how the Trustee may be replaced (if necessary), and set the rules for the operation of the Trust’s bank account.

Because all Trusts must comply with local and national laws, it’s best to have an attorney help you draft the Deed. That way, the Trust’s integrity can be maintained over time and you won’t run into problems with enforcement of the Trust contract.

Step 5: Sell Your Assets

You must get your assets into the Trust to make it valid. The way you do this is by selling your assets to the Trust using a written bill of sale. Then, have a lawyer help you draft a document to forgive all indebtedness to you by the Trust. This way, the Trust won’t have to repay you for any of the assets of the trust that you sell to it (since a trust often starts out with no money or property, this step is essential so that an actual transaction takes place and carries validity in the eyes of the law).

Step 6: Make Use Of Leases

To use the property, as the Settlor, you must have this property leased to you by the Trust. The Trustee must approve the lease for you to use the property, but often this isn’t a problem. As long as there’s a legitimate reason for the lease, it will be legally valid.

For example, you may sell your home to the Trust, but you may want to continue living there. You would have to lease the home from the trust in order to remain in the home.

Helen Akin is a financial advisor with several years of experience. In her free time, she likes to share advice with others by blogging on various websites. To learn about income protection and much more, visit the experts at Wealth Smart.