Starting a small business without the aid of a credit card can be quite stressful
Starting a small business without the aid of a credit card can be quite stressful. Since business expenditures can be add-up to significant tax deductions, it is imperative to separate personal expenses from work-related charges. Aside from the tax savings, a business credit card represents expanded options; particularly with the right card.
As with any financial product, not all business credit cards are the same. An annual statement is a popular feature of most business credit cards. Tallying up business related products and services are made simple with the convenience of recorded statements. Nevertheless, a good business credit card should have other features besides a balance sheet. Here are other features, to look for in a small business credit card:
· An exceptional credit line
· A low preferred business APR
· Extra business credit cards for employees
· Customizable business checks
· Custom cards with your business name
· Complimentary online account management
All of the above features can be mission critical to starting and conducting business. Review the following six benefits to finance a new company on a business credit card:
1. Easy Expenditure Tracking
Depending on the credit card company, a record of all transactions may be available annually or by request only. Small business credit cards offering free online account management is an important feature. The ability to check transactions and manage online payments simplifies bookkeeping. The same record can be used during tax-time to calculate profits and earnings.
2. Finance Business Needs With a Low APR
A low preferred business APR can ease the transition of being paid by new clients and covering unforeseen expenses. The financial stresses of starting a new small business can hinder productivity. Be it the cost of renting or buying new equipment, immediate expenditures can wreak costly distress on any business. A business credit card with a low APR can help offset the pangs of paying a balance over time versus right away. The best business credit cards offer a 0% introductory APR.
3. Control Employee Spending
To ensure that employees are conscientious about the company budget, additional business credit cards may control their spending. A business credit card with online management and additional credit cards enables a small business owner to track spending, maintain records and receipts. During conventions, Bill Amato’s sales representatives put in long hours. To compensate and track their meals, each of his employees has a company credit card. Bill uses Advanta business cards because it allows him the ability to control employee expenditures by tracking their spending transactions online.
4. Manage Client Expenses
For simple account management, small business owners can pay for products and services using a business credit card check. For instance, Jane Brody, proprietor of an event management company uses business credit card checks to pay for additional client expenditures. Since the checks are customized to her business and then made payable to the supplier for a specified job and client, she is able to track and tack on any additional fees to each customer’s invoice. Not to mention, each client is billed for late payment transaction fees.
5. Ensure Business Productivity
An exceptional credit line is useful for the fast growing small business that has to cover travel, new technology and other expenditures. A robust credit line can be the difference between staying in business and going out of business. The inability to access a line of credit without depending on a small business loan, can bring a growing company to a screeching halt.
In the case of new franchise owner, Jim Denko his new small business was just beginning to return an investment. On the down side, Jim required a line of credit so that he did not have to dip into the family’s money market account and emergency reserve. Because Jim was qualified for a small business credit card, he was approved with a generous line of credit. The availability allowed him the freedom to test out new inventory for his franchise.
6. Take Advantage of Extras
The ultimate business credit card can be found in the “extras.” For instance, certain business credit cards come with amazing discounts and special incentives. These advantages can add up to savings. Perfect example, Advanta business credit cards, not only come with a healthy credit line, the credit card is devised for small business owners to be successful. Many popular business credit cards feature generous cash back and travel rewards.
Small Business Advice: To minimize confusing your personal cost with the costs of starting a new business, apply for a business credit card that provides you with the tools to run a profitable business.
What an exciting feeling you must be having at this time
What an exciting feeling you must be having at this time. You have finally made the choice to “chuck it all” and go into business for yourself. You dream of the freedom from your unreasonable boss and the wonderful feeling of writing your own paycheck. It’s a lifelong journey that has to start at the first step – the very beginning.
It is my goal to take everything all those books say and boil it down to a real action plan that is a simple as it can be. Basically making it like a recipe. You really don’t need all that filler; you just need to know how to get started. A bunch of fluff isn’t going to help; in fact it slows you down. Instead of reading, you should be doing!
This section will be those most difficult first steps of just getting started. Effectively launching your business and then growing it for success are their own unique steps in the future. For now, I’ll have to assume you have an idea already and have researched it enough to know that it is a good idea and has a bunch of customers clamoring for your product or service. Please be sure you have a good quality product and/or superior service. You are not trying to make a quick buck; you want to have a business that lasts.
I also have to assume that you already have some sort of support network in place, trusted friends, professional advisors like accountants and/or lawyers, and a maybe a mentor with excellent opinions. If you don’t have them, you can pick them up along the way. But you’ll need them all at some point.
You probably want to know what qualifies me for writing about this. Academically, I have an MBA in Entrepreneurship and Marketing. Professionally, I have been a consultant for many entrepreneurs, I worked at a home business franchise company for several years, and I have a few successful entrepreneurial ventures of my own. I even helped my own family launch a very successful online business selling premium pashmina and cashmere products. I’m not a super rich entrepreneur, but I’m successful and happy. My key expertise is online ecommerce, but the following ideas are relevant to starting any type of business.
How to Establish Your Business
This first part is really what most people don’t know how to do. It’s the fundamental process of actually setting up the business. All the good ideas in the world have to start at the beginning. It’s not the fun part, but it has to be done.
It may seem elementary to you, but why haven’t you done it yet?
So, let’s start from the start.
1) Giving Your Business a Name
Your business’ name is important. It is your customers’ first impression and your public identity. You probably want to choose a name that is professional, but also may hold some meaning to you and your potential customers. My personal and professional opinion is to not get too elaborate with your name. Make it simple and direct so you don’t have to waste a lot of time branding or explaining to your customer just what it is you do or sell.
For example, for my family’s business selling pashmina products, we decided to go with The Pashmina Store. There is no question what the business is. Simple and direct…and the URL was available (which is very important).
Most people have a desire to name their business after themselves, using something like their family name, their first name, or their initials. This is a perfectly acceptable; as long as you get the idea across about what it is you are selling. For example, if you are selling raincoats and your name is Smith, you may call your business Smith’s Raincoats or even Raincoats by Smith.
Take the time you need to select on a business name that you’re happy with, says what you do, and has a good URL for a website. You should run your name choices by your friends and family to gauge their reaction and to get their thoughts.
2) Register Your URL
I know, you just decided on a name and have nothing close to a legal business yet. But I suggest snapping up the best available URL (or web addresses) as soon as you can. In this day and age, your website and the URL will be a large part of you business identity. It will also be the source of your email addresses, so getting a good URL matters. We were lucky enough to get http://www.thepashminastore.com for the pashmina and cashmere business, I hope you are as fortunate for your venture.
It is best to investigate available URLs even as you decide on a company name. Try to get the URL of your exact business name, or as close as possible. I suggest getting a “.com” rather than “.net” or other since that is what most people know.
You can research names and register at websites such as Register.com and GoDaddy.com. There is a small fee, but it is worth it if you are serious about your business. These two services even will help you inexpensively set up and host a website and email service.
3) Your Business’ Legal Organization
Next, you will have to determine what legal structure is best for your new business. Early in a business’ life, a sole proprietorship is most common. However, it is beneficial to know the different types of legal business structures before you decide for certain. You’ll need to know all about them as you grow, in any event.
You’ll most likely want to discuss the options with your accountant and/or attorney as well. To get you started, here are the three most common forms of business.
1. Proprietorship. As mentioned earlier, this is the most popular structure when starting a new small business. It is also the easiest to start. In most states and cities, all it typically requires is a D.B.A. (“doing business as”) and a tax ID number, which would likely be your Social Security number.
A proprietorship provides you the maximum amount of control over your business…but it also leaves you the most potential liability. In short, you are personally accountable for your business and all of its debts and legal issues.
2. Partnership. This form of business is common if your business requires you to take on a business partner for expert knowledge or financial needs. A partnership is a legal definition of your business relationship and defines which party is responsible for what aspect of the business venture.
For example, you may be the engineering type who can make the product. Another person may be the talkative type who can sell sand in the desert. Yet another person may be the main financial backer. Whatever your circumstances, a partnership allows you to define each person’s part in the business and put it down on paper in a legal manner.
3. Corporation. This is the most official and potentially complicated legal form of business. This is also the most expensive type of business entity, but it does provide everyone involved the least amount of liability.
It is very common to start as a proprietorship or partnership and then change to a corporation after the business is established and growing.
4) Business Registration
Again, most likely you will start as a sole proprietorship. The process is very simple and inexpensive. But the process can vary a bit between states and even cities and counties.
The goal here is to get your business name registered as a D.B.A, or “doing business as”. You will need this in most areas to open a business checking account. The fees are typically minimal, but vary on your location. Your County Registrar is most likely to be the office you will need to contact to ask about what the process is to get your D.B.A. The methods will vary by location and in some rare instances you may not even have to register. Just be sure to ask about all of the steps to make sure you’re covered.
After you have made some calls or used the Internet to find out the steps in your area, you will most likely need to go fill out paperwork at the government office that handles the registration. The good news is that the paperwork is generally light and the wait is not too long. They or you will be responsible for checking to make sure the DBA name is not already taken, and in many cases you will be able to check on the Internet before you even go.
After the paperwork and name check, you will have to pay a fee, which is generally small. Once it is all done, be sure they give you a notarized copy of your registration as you will need it at the bank to open a business bank account and possibly for other things.
I wish to remind you that what I offer are general guidelines and information to help get you started. It is always a good idea to discuss your options with an accountant or lawyer to determine what is best for you and your individual circumstances.
5) Obtaining a Business Address
This is a step that you can skip if you simply plan to use your home address or an existing business location as your address. But in most cases, you’ll start working out of your home and probably wish to protect your privacy and create an aura of having a larger business by getting a new business address.
This process is as simple as going to the post office or a private mail box center (PMB) such as The UPS Store. I suggest a PMB over the post office because you can usually use a street address and list your box number as a “suite” to help create a more positive image versus having your address be a P.O. Box number.
6) Your Business Phone Numbers
Like the business address, you can skip this step if you plan on using an existing phone number. But you should consider adding a second phone number to your home or office to be used just for your new business. You can even get what is called an “overlay” and put a new phone number on top of your existing phone. It will go to the same phone as you have now, and in most cases you can assign a different ring tone so you know it is for the business.
A toll-free number is also an important item to have, but you don’t have to have it right out of the gate. But studies show that customers are more likely to contact you if you have a toll-free number. They are not that expensive to set up and the charges are based on usage, so if you use it a lot you should be getting more than enough business to cover the expense.
Remember that you phone voice is important. Talk with a smile – the customer can hear that smile. Be sure you have a pleasant and professional sounding message for your voice mail as well. And call back your customers who leave messages as fast as you can. Your competition probably isn’t taking care of them fast, so you should.
7) Business Banking Account Formation
Having a separate business banking account is advised since it will help you keep your financial records straight. It will save you a lot of time during tax season to keep your business and personal spending separate. I suggest using a larger bank, such as Bank of America or Wells Fargo, which serves the business community. They will offer a wider range of services and possibly be a good source of business loans to help fund your growth.
You may want to call several banks in your area to compare their small business service options and the associated fees. Once you decide on the right bank for your needs, make sure you know what paperwork to take when you open the account. In most cases they will require at least your notarized D.B.A certificate.
Logos, Business Cards, Letterhead and Such
Some people may tell you to invest lots of money upfront to develop a great logo and then put it on expensive letterhead. These people have never started a business on a budget. While you do want to appear professional, you can do just fine with your own computer and printer while you wait to grow big enough to afford such materials.
Most likely your word processing program or other such program already has a letterhead template. That is fine to use for now. Choose a nice font for your new “logo” and use some color for it, if you wish. Do purchase some nice paper to put it on. Then simply print out as needed.
On your letterhead, make sure you get all of your important information across in a professional way. In general, you’ll want to include your business name, mailing address, phone number, fax number and email address.
The same goes for business cards and envelopes. You can buy nice envelopes and business card stock and use your existing program templates to create professional materials as needed.
Having a designed logo or company motto on your letterhead is a personal choice. Make sure it looks good and reflects the business. Also make sure it looks good when it is made very big or very small since it will be used in various formats.
The Next Steps
Once you finish Step 8, you’re in basic business shape. It is difficult to tell you what to do next since there are so many types of business and different ways to go about it.
In general, you’ll need to start letting people know about your business and getting customers. This may mean developing a website that sells products or promotes your services. It can be as simple as handing out business cards to everyone you meet. Or maybe it is “pounding the pavement” and meeting people to tell them what you are doing.
But there are a few things to keep in mind that relate to any business. The Nike slogan has it right when they proclaim “Just Do It.” Nobody is coming to you, so you have to reach out to them. And it takes time and effort. Yes, you do have to “work” and “sell” no matter what those advertisements may promise for their wonderful business opportunity.
Here’s the “secret” to success: You will have to work harder than your competition, treat your customers better than your competition, offer a better product and or service than your competition, just plain be better than the rest. Yes, that is the secret!
My first job out of college was as an executive recruiter, a headhunter. I was successful at this job. In fact, I was one of the tops in the nation. It wasn’t because I was naturally better than anyone else, it was because I worked harder and I worked consistently. Have a plan for the day, the week, the month, the year…and do it consistently. Get into a routine and stick to it. You’ll get sidetracked along the way, of course, but keeping your efforts consistent will pay off. You’ll make you own “luck.”
Since you are your own boss, you do have a little luxury to make a schedule that fits your lifestyle. If you want to start at 10:00 AM, or play golf for lunch, or work late at night, that is fine. But stick to the schedule and make it your routine. This will help you get over the initial feelings of being scared and overwhelmed and start getting you comfortable with your new professional life and on your way to success.
Along the way, you’ll start to discover what your strengths and weaknesses are. You don’t have to be an expert at anything really; you just have to be average to above-average at a lot of things as an entrepreneur. If there are glaring weaknesses in you business skills, you simply have to work at them. You can read a book, take a class, whatever…but you’ll naturally get better each and every day just by doing your business.
Finally, do not get so frustrated in the beginning that you quit before you even get started. Depending on what you start with and what (or who) you already know it is going to take some time. Even minimal success is probably going to take several months and maybe a year or more. Make sure you are mentally and financially ready for at least a year.
If you’re not ready now, don’t worry. You now know the steps and what to expect to even get started. It is better to take you time and be well-prepared than to rush off and make a mistake that you will regret for years to come.
Launching and growing your business are the essential main steps 2 and 3. But those are whole other beasts that are best discussed at another time. Until then, I wish you the best of luck and hope that your new business is an incredible success.
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Your Post-Collision Field Guide
Do you know what to do if you are in an auto accident? The decisions you make at this crucial time could save you thousands of dollars, and your life.
Do you know what to do if you are in an auto accident? The decisions you make at this crucial time could save you thousands of dollars, and your life.
Be Prepared Ahead of Time
Make sure you have all necessary information and tools available to alert emergency personnel and document damage in the event of an accident. If you have any specific medical needs, keep a sheet with the information in the glove compartment. Also keep a notepad, pen, first aid kit, seat-belt cutter, and a disposable camera in your car to take down information from others and document crash damage. Of course, you should always have your driver’s license, vehicle registration, and coverage information.
Immediately Following the Accident
Safety first – Immediately check yourself, and then others in your vehicle, for injuries. If you suspect a head or neck injury, do not move the victim. Rather, try to stabilize the head to keep it in place. Moving someone with a head or neck injury can cause permanent damage and even death.
Put pressure on wounds with severe bleeding by using clothing or towels.
If in doubt, always call an ambulance to make sure all potential injuries are treated. Always call the police to file a police report, which is very important when filing insurance claims.
Once everyone is safe
If it is safe to do so, immediately begin collecting contact information from the other parties as well as witnesses. Exchange driver’s license number, vehicle registration number, and coverage information with the other driver, noting any differences between the name on the license and the name on the insurance or registration. This is vitally important.
Document damage to the vehicles as soon as possible, preferably by taking photos. It is also helpful to take photos of the scene, noting the relationship between vehicles, the road, vehicle debris, etc.
Move cars to the side of the road if you can, as this will be safer for you and other drivers.
Refrain from leaving the scene before the police. Contact your insurance company immediately. Some insurance companies require you to file a claim within 24 hours of an incident.
Talking with Others
Everyone is jarred by an accident, so it is very important to stay calm and polite. Do not sign any documents except those provided by police or emergency personnel. Do not admit fault of the accident, nor should you accuse the other party of being at fault. Simply tell the police the facts to the best of your ability, exchange car insurance information, and allow professionals to do their job.
Vehicle Repair
Your automobile could very well be the second most expensive item you ever purchase, so take an active role in the repairs to your vehicle to make sure the repairs and costs are appropriate. This will help protect you against fraud from extra costs from both autobody shops and your car insurance provider.
Inspect auto repair shops for modern equipment and willingness to justify their cost estimate. When you receive your repaired vehicle, inspect it to make sure all repairs (and no other repairs) were completed. Check places where paint has been added to make sure it matches. Take your vehicle for a test drive to guarantee it works properly.
Then find lower premiums using car insurance quotes!
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Car insurance quotes for the top and bottom of the market
When you look at all the movies, television shows and mainstream magazines, the successful people in our society are all supposed to be mercenary, interested only in demonstrating their wealth by conspicuous consumption. That means they must have one of these detached homes with enough room for a 9-hole short course in the master bedroom and a swimming pool on the roof, while the garage is full of all those dream motors. Anyone who is anyone must drive something exotic from Italy or Germany or some place where people know the name but never quite worked out where it is on a map. So, when all the rest of us fantasize about suddenly hitting the big-time with the latest lottery ticket, the first thing people think about buying is one of these top-of-the-range cars. So, the $64,000 question (the minimum price tag on some of these cars after a dealer discount) is how much they cost to insure.
There’s a new survey out (as always). A dedicated research team set out to find the top ten of the most expensive cars to insure in 2011. Interestingly, we have all the usual suspects from Mercedes, BMW, Aston Martin and Porsche as the makes, but curiously not Rolls Royce, Bentley, Ferrari, Bugatti, Lamborghini or, even, the Saleen S7 which, as all dreamers know, is America’s top supercar. It seems the retail price is not the only factor taken into account when setting the premium rates – the Bugatti Veyron is currently the most expensive car to buy. Yet, perhaps, it’s all slightly academic since all these top insurance rates are clumped quite close together. Probably, the missing models are just off the edge of the screen.
Anyway, the top average annual rate quoted is $3,543 for the Mercedes SL65 AMG. This must be the rate for an older driver not likely to try driving it on a public road with the acceleration and at the speeds it is capable of producing. If anyone younger and pumped full of testosterone wanted to get behind the wheel, we suspect the rate might be rather higher.
So here we come to the point of all this. This model of Mercedes sells for around $240,000 and yet only costs an average of $3,543 to insure which is about 1.5% of the retail price. Let’s now go to the other end of the scale. The cheapest vehicles to insure start with a Chrysler Town & Country LX. This costs about $45,000 to buy and $1,091 to insure which is 2.4% of the retail price. If we are to believe these insurance figures, it seems the average driver pays more to insure their lower priced vehicles and so subsidize the tiny minority that can afford to buy these dream cars. Yet, the lesson is the same for everyone if they want cheap car insurance for whatever make and model they buy. Always get the maximum possible number of car insurance quotes. Only by comparing all the prices and terms on offer can you hope to find the best value policy. Even the wealthy in their dream cars appreciate saving a few dollars when they have the chance.
Uninsured and underinsured drivers
When you look at the real world, it’s always difficult to decide why stuff happens. The clever folk who write books have their answers but, somehow, when you try to apply these wonderful theories, they tend to break down. Think fad diet books and you should get the message. Anyway, one of the more worrying trends on our roads is the number of people either driving with no insurance or only driving with the bare minimum. For those of you who like statistics, there’s a slight disagreement but the national rate seems to be between 18 and 20 percent of drivers on the road uninsured. The majority of those with insurance who own their own vehicles are on the mandatory minimums. Since these are way below the amounts actually necessary to pay the medical expenses of those injured or to repair damaged vehicles, these drivers are partly uninsured. How come there are so many?
Let’s come at this from two different directions, starting with enforcement. Drivers should all have a license to be behind the wheel. So all insurance companies could require people asking for insurance to produce a valid driving license before issuing a policy. Every time an insurance company issues a policy, it could notify the state licensing body. That way, the state would have an immediate list of all registered drivers who did not have a current insurance policy. It could write to every driver asking for proof of coverage, allowing seven days of grace for the drivers to get a policy. Any driver who then failed to produce a policy could be prosecuted.
As an aside, we should mention Oregon which has just produced a report showing only a slight increase in the number of people driving uninsured. Apparently, 6.5% of the drivers involved in accidents in 2010 were uninsured. This report follows up on a change in the law making it more difficult for people to get a driver’s license. It seems there has been a significant increase in the number of people driving without licenses, but many unlicensed drivers buy car insurance. See what we mean about confusing realities. You can understand drivers not insuring because the economy is bad and jobs are hard to find. But skipping on licensing just because they have to fill in more forms. Well, you decide.
Why then do states not enforce the law on auto insurance? It would be good to think this was to give people a break during hard times. If the economy is bad and they really cannot afford to insure, you do not chase them. Except, this is the same policy as applied during the boom years. Politicians and elected police officials do not see votes in policies designed to hit the motorists. The result is higher premiums for those who do pay. With the same cost of risk divided among a smaller group of people, there is no alternative. Except there is no rationality in modern politics. Just as you cannot raise taxes, you also have to look the other way when car insurance quotes keep on rising. That does not take the heat off you , of course. You should still get as many auto insurance quotes as possible to find the cheapest deals.
The mandatory minimums
Thanks to the healthcare debate, everyone has got all fired-up about the question whether insurance should ever be made mandatory. This has been picked up by the right wing of the GOP with the Tea Partiers in full bitter resentment at the idea anyone should ever be required to buy an insurance policy. The newly elected members to legislatures around the country are coming into office with the idea they should roll back Big Government and leave the choice about everything to the people. At first, there was no sign the law might be in their favor, but one federal judge has now ruled a part of Obamacare is unconstitutional. It seems this is now headed for the Supreme Court. Except neither side is very keen for this to be resolved quickly. It may be 2013 before we have a final ruling. So where does this leave the everyday problem of insuring the vehicles we rely on to get around?
In theory, the two types of insurance are different and so insuring vehicles probably can be made mandatory. The reason? It’s your decision whether to buy a vehicle. You could walk, ride a bicycle or use public transport. If you choose to drive, then you have to carry insurance. But whether you fall ill is not under your control. People are what they are, so forcing everyone to buy insurance just for living does start to look more like a tax. We will see what the Supreme Court says. But the world is already changing. Take Wisconsin as an example. A newly elected Republican is co-sponsoring the Consumer Choice Auto Insurance Act. This would repeal the recent increases in the minimum liability requirements. It would still be mandatory to carry some insurance. Just less of it. The justification is that the insurers would then reduce the premium rates and so make life slightly more affordable. An alternative explanation is that even the newly elected State Rep did not feel able to justify repealing the mandatory insurance altogether.
In other states, the law-makers are reviewing the minimum amounts for the mandatory coverage. They are all proposing further increases. Taking account of inflation over the years, these amounts have been devalued by about 700%. All the costs of medical treatment and repairs have been increasing and are no longer covered by these minimum amounts. The whole point of mandatory minimums is being undermined by the continuing failure to make a real increase. Except, of course, this would force a rise in the car insurance rates and would be very bad politics during a recession. Pushing up costs on what most people consider a necessity will inspire anger. No elected politician voting for this would be safe during the next election.
With everyone focussing on budget deficits both at state and federal levels, anything that pushes up the cost of living hits the poor and middle class at a time when they are most vulnerable. Since tax increases are politically unacceptable, the only way of reducing the deficit is to reduce both discretionary and entitlement spending. This will affect the poor even more directly yet, as everyone hunts for those elusive cheap auto insurance policies, they could have less to spend on keeping their vehicles on the road.
What insurance quotes are for?
There are a lot of sites out there offering you with all types of insurance quotes these days to make you question why they are so popular. It’s true, sites offering free online insurance quotes have become a very popular tool for searching insurance deals of all types without the help of insurance agents or brokers. And the most rapidly developing niche in this segment of online business is of course car insurance. Unlike health, life or home insurance, having your vehicle covered is a must in the US that’s why there are so many customers looking for affordable and competitive car insurance quotes all the time. But why do you need these quotes and how can you cut your insurance costs by using these free online services?
It’s quite simple, really. The secret of getting a good policy is shopping around. Just like you shop around for a car comparing the prices at different dealers and look for different option packages that may drop the final price of the car you want to buy, the same way quote comparison can give you great competitive policies that will allow to save quite a lot of money on cheap auto insurance. You see, the insurance companies each have different methods of calculating their rates (and quotes respectively). They all use the same factors such as your age, sex, marital status, your car make and model and other variables, but the weight each factor has in the final result differs from one company to another. This discrepancy in calculations is what you should be after because it allows you to save some money while having pretty much the same coverage package at different insurance providers. For some car owners it can be insignificant, for others it can result in hundreds of dollars save each year. So comparison shopping is really worth the time and effort invested.
What’s more convenient about the current trend of independent sites providing free quotes online is that it gives you convenience and a lot more possibilities for comparison shopping. Typically, when working with an agent or a broker you are limited to the companies your particular agent works with. Sure, it usually gives you some space for maneuvers, but you’re limited in the selection of quotes you may choose from. With quote comparison sites you get offers from virtually all the providers working in your area with just a few clicks of the mouse. You can do it wherever you are and for as many times as you want – it doesn’t cost you anything and you get all the info within a few minutes all on your screen. If that’s not convenient for you, then it’s hard to imagine what really is.
Auto insurance can be really affordable if you put some mind and effort into the process. Don’t haste buying the first policy you’re offered with. Take your time to compare quotes online or with your agent and get the policy that provides all the necessary coverage to meet your insurance needs for the best price among the competition. Only this way you will be able to cover your car to the right extent and save some money while doing it.
New “Crash Taxes” Impact Car Insurance
Paying extra for out-of-town crashes
Should you pay extra when you get into an accident outside your home city? A proposed bill by the Sacramento City Council could have out-of-towners footing extra bills in the event of an auto accident. The proposal, called a “fire cost recovery charge” by supporters, though opponents hurl the name “crash tax”, would require non-resident motorists to pay an extra fee when Sacramento responds to your emergency-$400 to over $2,000.
And it’s not just Sacramento
Sacramento, California’s capitol city, would be the most populous municipality in California to try this strategy, but not the only one. At least 50 cities in California and as many nationwide have adopted similar policies to combat fiscal shortfalls. They have also been outlawed in 10 states, including Florida, Alabama, and Georgia. Last December, New York City Mayor Michael Bloomberg defended an implementation of such a policy, regardless of who is at fault. He admitted it was a back door tax but contested it is a better alternative than closing firehouses.
The Reason for the Measure
The fine would repay the city for various expensive municipal services, including damage and dangerous fluid cleanup, responding to gas explosions, and extinguishing vehicle fires. Fire recovery charges could net the city up to half a million dollars annually, a spokesperson for Sacramento Linda claimed.
A spokesperson for New York City Fire Department explained that the idea is to remove the burden of payment from resident taxpayers and onto those who cause the accidents.
Everyone seems to agree that new ways to procure funding are necessary during the economic downturn, but many do not see this strategy as effective.
Critical Response
First proposed back in July, the measure has more than its share of critics. The Sacramento Bee editorial board argued that the bill would upset drivers who would not find out about the extra charge until they received the bill. Ultimately, they said, the plan would backfire from lost revenue when angry motorists stop visiting the capitol city. Insurers are not happy either, claiming they will have to raise rates and ultimately push the price to customers.
Peter Vallone, a Queens Democrat and chairman of the public safety committee, saw it differently:
“What’s next? Your store gets hit by too many shoplifters and the police charge you to respond?”
The Impact on Auto Insurance
How these accident fees will affect auto insurance rates is yet to be seen, but according to Ohio’s National Association of Mutual Insurance, motorists are merely getting hit twice.
Joe Thesing, an association representative, said that it is a kind of “double taxation”, where citizens who follow the law and carry insurance are penalized. Third parties to handle the transactions are marketing the idea to municipalities, he said, because they will get a cut for acting as an intermediary.
If insurance winds up covering the costs of the city fines, there is a good chance that premiums will increase, especially if you do have a collision in one of these cities.
It remains to be seen if auto insurance will be more expensive as a result. Insurance providers are certain that the widespread use of such a policy will have an impact on auto insurance rates.