Friday, May 1, 2009

Thinking of doing a walk a way from your vehicle? Think again!

It's real tough out there. Unemployment has not been this high since the depression. Costs for household essentials are going up, income is dropping. Everyone is trying to keep every penny they can just to keep the house payment made and food on the table. You or a family member may have a job loss or injury to deal with.

Many are asking " How can I get out from under my car payment?" . You may have a second vehicle you don't need any longer and possibly can't afford to keep around. It cost's too much to fill up, it doesn't get good mileage, the payment's for 2 cars is too much. Some people are abandoning or "Walking away" from their burdensome vehicles.

For example, take the case of a New York woman who reported her car stolen to police. Her car was latter found in Lake Erie. The keys where still in the ignition, and a rock was tied to the gas pedal. She later admitted to police that she wanted to buy a car with better gas mileage. Her hope was to collect the insurance money, buy a new car and get out of her current payments. She now has a criminal record for the rest of her life.

Or how about the lady in Mississippi who parked her car next to the storm gulf coast waters of Hurricane Gustave and then hopped into a waiting SUV.

There are many others. In Nevada, the police have started patrolling the desert areas by helicopter looking for burned out vehicles.

Such actions may seem pretty tempting in these trying times. But there are consequences. In addition to driving up insurance rates for everyone, you may be commiting fraud and you will have a criminal record for the rest of you life. You could end up on probation or in prision and have to pay several thousand dollars in court fees, fines, and restitution.

Not worth it.

There are alternatives to doing something illegal. Some auto dealers are now taking vehicles back if you can't make your payment. Better still, some dealers are not putting anything on your credit record for returning a vehicle. Also, the financing company may be able to work with you to get an affordable payment. Don't be afraid to ask them.

If you are having a hard time affording auto insurance, check with your agent to see if there is another carrier you can go with or if you can adjust your coverage. Shop around. You may also qualify for the California Low Cost Auto Program. This program provides low cost auto insurance to meet the legal requirement in California. There are income and driving record guidelines you must meet in order to qualify. Click here for more details.

In many cases, you can increase your deductible in order to save money, but be careful. This should be a last resort. Remember that your deductible MUST be paid in the event you have a claim BEFORE your policy coverage protects you. Never raise your deductible to an amount you will not have in an emergency.

If you are a professional or member of an organization, like AARP, check to see if they offer insurance to the membership. Sometimes you can get a discounted rate because of where you work or what organization's you belong to. Your bank or credit union may also have insurance plans available, but be careful. Some lenders are only out to protect their interest ( i.e. the loan) and not you. Be very clear on what coverage any policy from a lending institution provides. I had a client call in because they got an offer from their bank for life insurance. After listening to her read me the advertisement, it was clear that the policy would only pay off her mortgage in the event of her death. Her husband children would get nothing for funeral and other living expenses.

Remember, there usually are alternatives if you search for them. Don't think that you will not get caught. Insurance departments across the country are actively investigating and prosecuting insurance fraud. Insurance companies internal fraud units are geared up in this tough economy to look for suspicious claims. With the different options available, you don't need to risk ruining your good name and reputation just to save money.