Their list of the 20 least expensive cars to insure:

1. Toyota Sienna LE: $1,111
2. Toyota Sienna 4 cyl: $1,114
3. Jeep Patriot Sport: $1,116
4. Jeep Compass Sport: $1,118
5. GMC Sierra K1500 Regular Cab: $1,121
6. Chevrolet Silverado 1500 Regular Cab: $1,125
7. Dodge Grand Caravan SXT: $1,129
8. Ford Escape XLS: $1,137
9. Toyota Sienna 6 cyl: $1,139
10. Chevrolet Silverado 1500 Extended Cab: $1,143
11. Dodge Journey SXT: $1,143
12. Honda Odyssey LX: $1,146
13. Kia Sportage: $1,151
14. Hyundai Santa Fe GLS: $1,152
15. Jeep Wrangler Unlimited Sport: $1,154
16. Nissan Frontier S King Cab: $1,162
17. Nissan Frontier SV King Cab: $1,163
18. Hyundai Tucson GL: $1,166
19. Ford Escape XLT: $1,167
20. GMC Canyon: $1,167

The 20 most expensive cars to insure (I don’t have to worry about this list):

1. Audi R8 Spyder Quattro Convertible: $3,384
2. Mercedes CL600 BI-T Coupe: $3,307
3. Mercedes S600 BI-T: $2,948
4. Audi R8 4.2 Quattro Coupe: $2,903
5. Porsche Panamera Turbo: $2,738
6. BMW 750i Hybrid: $2,701
7. Porsche 911 Turbo Convertible: $2,674
8. Porsche 911 Turbo S Convertible: $2,674
9. Mercedes CL65 AMG Coupe: $2,669
10. BMW 750Li Hybrid: $2,641
11. Mercedes SL63 AMG Convertible: $2,615
12. Mercedes CL63 AMG Coupe: $2,613
13. Jaguar XKR Supercharged Convertible: $2,585
14. Mercedes S63 AMG: $2,542
15. Mercedes C63 AMG Coupe: $2,532
16. Audi A8 L Quattro: $2,513
17. Mercedes SL550 Convertible: $2,458
18. Nissan GT-R Coupe Turbo: $2,457
19. BMW 750XI: $2,446
20. BMW 750i: $2,430

You can read about their methodology here.

After I got off the phone with our agent, I sent a message to a friend of mine who runs a local insurance agency. He and his wife have older kids too and I thought he’d be a good source for some tips. Here is what he sent me:

When you add a new driver to an existing car, you can expect the rate on that vehicle to increase by as much as 40 – 50%. If you add a new driver and a new car, you can expect that vehicle to cost around $600-$700 for coverage without comp and collision. With comp and collision, $1000+.

Most carriers have discounts for drivers that make good grades. They get a discount for drivers ed. The premium is usually lower for girls than boys (not much).

The premium drops some when they reach 21.

One thing I always suggest is for parents to find a car that’s safe and they can pay cash for. Don’t include comp and collision to keep the rate down. If Jr wrecks it, he’s on foot until he fixes it or earns the money for a replacement.

When you think about what not to get a kid….all the high powered sports cars. It’s not that the insurance co. won’t insure them—they will and collect large premiums to do so. But it’s just not smart sending a new driver out in a high powered car or truck.

Insurance companies check for tickets and accidents when given a reason to do so, i.e.. lots of accidents and claims. I suggest setting a higher deductible and not claiming small things that can be paid out of pocket. Of course if other parties are involved, that still won’t help. But if jr runs into your garage door, you may want to pay that yourself and “bank” your future claim for a time when you must make a claim.

Hope this helps.

Mike Roby Insurance (facebook)

Now, there are some things we could probably do to drop our rate a bit. I think the insurance representative ran the numbers with comprehensive and collision, which would have definitely increased the premium. I’ll learn more as my son gets closer to driving. He’s even going to be responsible for some of his premium. He’s also going to be driving our 2002 Buick Rendezvous. Won’t that be cool?

The bottom line is insuring a teen driver is expensive! What’s been your experience with having teen drivers? What things did you do to lower the premiums so that you didn’t have to eat bread and water during the teen driving years?

Last week when I was getting the oil changed in my wife’s car, this fairly young-looking guy pulls up in a fairly new BMW 740Li. I got to wondering how much it would cost a person to drive a car like that. If you’ve never priced the 740Li, you might be shocked that they run upwards of $80,000. To put that in perspective, my wife and I paid $89,000 for our 2,275 square foot house in 1999. I know it’s not a fair comparison due to inflation but it is the closest thing I have to make a comparison.

Anyway, I was poking around on BMW’s website last night and found a link for their leasing deal, which works out like this:

I’m not sure how the taxes part works, but I’m pretty sure that has to be paid up-front, which means a person leasing this particular BMW would have to put down over $13,000 to drive the car off the lot. They would then have a monthly lease payment of $909 for the next 36 months. At the end of 36 months, they can purchase the car for $44,791 or hand it back to the dealership and pay a $350 disposition fee and $.25 per mile over 30,000 miles and any other fees for excessive wear (as pointed out in the contract). If they hand it back to the dealership, they would have spent $45,383 over three years (or essentially $1,260 per month).

If they decide to go ahead and buy the car and finance it for 4 years at a 6% interest rate, their payment will be $1,051.92 (and that number doesn’t include taxes, which are mentioned on the BMW site).

What’s worse is my math doesn’t include maintenance, which I have heard is pretty expensive on a BMW.

I can’t imagine spending that much just so I could drive a BMW 740Li. The question I always think about when I see younger people driving these expensive cars is, “How much have you saved for your retirement?”

My first question was:

“How much will it cost me to charge the battery?”

After installing a home charging station ($2,200 not including a tax credit), Nissan says that at an average of $.11 per kWh, it will cost $2.75 for a full charge (see here). Doing a little math, that works out to about 25 units (I don’t know what else to call it) of electricity used to make a full charge. I looked at one of my electric bills and determined that we are paying $.125129 per kWh. Multiplying that by 25, I get about $3.13 per charge. So, $3.13 per 100 miles. Our Rendezvous costs about 4 TIMES that much to drive 100 miles (averaging 20 miles per gallon and paying $2.50 per gallon).

Not counting other automobile maintenance, a gasoline powered car would have to get 80 mpg in order to get its fuel cost equivalent to that of the Leaf’s.

The 100 mile range is a significant drawback in my view (at least for my family). My wife has a 120-mile per commute so she wouldn’t be a good candidate unless she could plug in the vehicle while she was at work. Since I work from home, my driving is a lot less. I could be a good candidate. But, with three kids, we desire a bigger vehicle for family trips and stuff like that. That means, for us, my wife would have to drive the bigger vehicle to and from work.

Another consideration is that the number of miles between charges will decrease as the battery ages. And, these batteries could cost thousands of dollars to replace.

The bottom line for me is that I would consider buying one IF they could get more miles between charges. There’s talk of building charging stations but there wouldn’t be any in our area for quite sometime. And, a charging station would take approximately 30 minutes to fully charge the Leaf. What would be cool is if they could figure out a way to make batteries easily changeable. Then, Leaf owners could lease a battery and just change them out at a charging station rather than having to wait to charge them.

Finally, my other concerns are:

• What happens to all the spent batteries? Landfill or could they be reused?

• What kind of stress would all these plug in vehicles put on the electric grid? Would electric companies then have to charge more per kWh in order to make upgrades?

Hi, I was wondering if you could help me out and explain why each month the amount of my car payment applied to interest goes up and down as opposed to gradually going down? Does the time of the month you make your payment affect this? Or something else?

L

After a couple of email exchanges, I got the following information:

Amount financed: $16,788
Interest rate: 12%
Term: 6 years (72 months)

I plugged those into a spreadsheet to find that his monthly payment should be around $328.21. He told me his actual payment is $331.99 per month. Most likely, there’s some program included in his monthly note. He also sent me a record of his payments:

As you can see, his first payment had a ton of interest. That’s most likely due to the fact that they probably put off the first car payment for 45 days (at least that’s what I came up with). My theory is that interest on this loan is charged on a daily basis. In this case, they divided 12% by 365 and then multiply that figure by the outstanding balance and add that amount to the balance. Like this:

Then, on the date the payment is made, the current balance is reduced by the amount of the payment and the interest charge is calculated on that balance. The interest portion of the payment is simply the sum of the daily interest charges since the last payment. So, if he goes longer between payments, there will be more interest for that particular month. I came pretty close to getting the same numbers as this reader sent me.

He then asked me if there was a way to reduce the interest charges by sending in his payments early. That will reduce his interest charges slightly but to REALLY make a difference, he needs to pay more towards his principal each month. That would give him the most benefit. And, since his interest rate is 12%, it would be very wise of him to do so. According to my numbers, he will end up paying over $6,900 in interest on this loan. He only financed $16,788.

The only good thing I can say is at least he bought a Honda. I just hate seeing people with these kinds of loans.

Hello,

I am recently divorced and I recently filed bankruptcy and discharged. I needed transportation so I had to take what I could get under my circumstances. This is what I got which is not too good, but I needed something.

Loan $23,108.93
APR 19.50%
72 months
Payment $546.84 which will make my total of payments $39,372.48

Should I double (or more) up on payments and try to get this paid off sooner?
Should I make my payments for awhile (2 years) to build up my credit and then try to get a better loan?
Should I put the extra money into some type of account to draw interest?
I need help, what would you recommend?

Thank you in advance for your help,

D

There’s no way around it…a 19.5% interest rate on a car loan is crazy! If you kept the loan for the entire 72 months, you would be paying over $16,000 in interest! That’s roughly 70% of the price of the car. In other words, that’s almost like paying for 2 cars.

What’s done is done but I think I would have looked for a cheaper car.

Okay, now to answer your questions…

Should I double (or more) up on payments and try to get this paid off sooner?

I ran an amortization and found out that if you doubled your payments and payed $1,092.85 per month, you could have the car paid off in 27 months (26 payments of 1,092.85 and one payment of $128.05). This would bring your total interest payed to a much-easier-to-stomach amount of $5,435.23. It’s still a lot considering you are paying nearly $1,100 per month. Doubling up on your payments isn’t a bad idea if you can afford to.

Should I make my payments for awhile (2 years) to build up my credit and then try to get a better loan?

The problem I see with this strategy is that at the end of two years, you’d still owe over $18,000 on the car. It would be hard to find a loan with decent terms for a two-year old car that has depreciated 30 to 40%.

Should I put the extra money into some type of account to draw interest?

I do think you need an emergency fund of some sort…say $1,000 to $2,0000. Beyond that, it simply makes no sense to have extra cash sitting in a bank account drawing pennies in interest while you’re paying off a 19.5% loan.

So, here’s what I would do:

1. Put back a little money for a bare-bones emergency fund.

2. Pay as much as you can on the car loan to get rid of that debt. Just make sure that there’s no pre-payment penalty and make sure your lenders applies the extra payment to the principal on the loan.

3. After the loan is paid off promise yourself to never get involved that kind of loan again.

4. If you didn’t miss that payment, then put it towards your retirement once the car is paid off.

…the dealership was taking in a lot of trades on the Cash for Clunkers program — they’d sold 60 cars in four days! — but he also noted that, in one respect, it was kind of a shame.

“How so?” I asked.

“Well, when these cars come in, we’re required by law to destroy the engines so they can never run again. The mechanics have been draining the oil and the coolant out of them, and then giving them the old broomstick test, or putting a brick on the accelerator until the engine seizes.”

“Really…” I said, suddenly feeling a little lightheaded.

“We had a really clean older Chevy pickup come in on trade — no rust, 6-cylinder engine running perfectly — and we had to drain the oil and burn out the engine. We also had a nice Windstar minivan come in with about 100,000 miles on it. It ran fine, but we had to destroy it.”

“What happens to the rest of the car, once the engine is gone?”

“It has to be scrapped and parted out.”

Strangely, I hadn’t even asked myself — until that moment — what would happen to our Jeep if we traded it in. I guess I naively pictured it being given to a medical clinic in sub-Saharan Africa, or going to some happy hunting ground where Jeeps are young again, and free to perch on buttes in Monument Valley.

The very idea of intentionally ruining that trusty old 318 in our Jeep — a classic American V-8, and one of the best — made me suddenly queasy. But then maybe that’s just me.

You can read the rest here: Side Glances: Cash for Clunkers

I have to say, I agree with the author. It does seem like a waste to ruin good engines. I understand the motives, but I think it just shows how wasteful government programs are.

I was just on the SmartUSA website. I have seen a few Smarts driving around town and thought I would check them out. Their prices aren’t too bad and I think they are nice-looking cars. But, I have to say I’m disappointed with their fuel economy, which is 33/41 (city/highway). Keep in mind that those numbers are estimates. We all know how those numbers usually don’t reflect reality. In reality, you’re going to be lucky to get 30/38 (city/highway). In my opinion, that’s not good enough to justify buying an extremely small two-passenger vehicle. A Honda Civic has an estimated MPG of 26/34 (23/31) and offers seating for five—though comfort is questionable.

The Smart is hip and will get some attention but I think the Civic (or some other equitable small car) is a better choice.

What’s your opinion? Would you own a Smart? If so, why?

The first thing I thought was, “Where the hell am I going to take my car?” Some of you are probably wondering why I’m taking my car to a dealership for service in the first place. Well, I don’t normally take it to the dealership for routine service. But, it is nice to have them available for the bigger jobs.

When they close this dealership, the closest GM location—besides the local Chevy dealership—will be in a little town about 20 miles away. This stinks because it means that the shuttle service probably won’t be available, which means I’ll have to either have someone drive up there with me or I’ll have to sit around and wait while they service my car.

I guess I’m going to have to find a local garage that I can trust. That sounds scary.