If your car is old, it could be time to drop collision insurance

August 08, 1993|By Knight-Ridder News Service

Are you still carrying collision insurance on that clunker you call a car? Maybe it's time you consider dropping that coverage, says the July issue of Money magazine.

Collision pays for damage to your car in an accident, and in some cases, that coverage may account for 20 percent to 40 percent of your total auto premium.

If your car is old, however, it may be wise to pocket those dollars. As a rule of thumb, the magazine said, collision should be dropped if it costs you more than 10 percent of your car's market value.

To estimate the value of your heap, check the National Automobile Dealers Association's "Official Used Car Guide," or the "Older Used Car Guide" for vehicles made between 1976 and 1985. Both can be found in many public libraries.

*

Do your appliances go kaput soon after the warranty expires?

Citibank apparently thinks so.

The company is trying to drum up business by offering consumers a free lifetime warranty for most appliances purchased with certain Citibank credit cards.

But critics say the program is more flash than substance, since most products don't need extended warranties. Also, the Citibank cards don't necessarily have the lowest fees and interest rates.

"In the end, a person would be better off remembering that credit cards are personal loans," said Gerri Detweiler, executive director at Bankcard Holders of America, a consumer group in Herndon, Va. "They should shop for the best loan rates available and not pay much attention to the frills."

The Citibank warranty would duplicate a manufacturer's warranty, but it would extend over the service life of an eligible product.

* How many years of retirement do you expect to enjoy? Many Americans underestimate the number they will have.

About 45 percent of those who plan to retire between ages 55 and 64 said they expect to be retired for 11 to 20 years, says the Employee Benefit Research Institute. However, life expectancy at those ages ranges from 17.9 years to 24.7 years.

Since many people live longer than they expect, they often run out of cash before they run out of life, said EBRI president Dallas Salisbury.

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