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Wednesday, July 22, 2015

The 'Smart Buyer' Club ... An Idea Whose Time Has Come? ... When Purchasing Insurance (and Everything Else) ... Smokey Robinson Had It Right ... You Better 'Shop Around'

My fellow oldsters will remember the 1960 hit recording 'Shop Around' by Smokey Robinson and the Miracles. The mother told her son that before marrying, he'd better 'Shop Around.'

That was good advice then, and it's still good advice. But it doesn't just apply to spousal selection. In fact, when buying car insurance (and everything else too), the motherly 'Shop Around' admonition is solid counsel and should be folowed.

The $4,600 mistake most drivers make offers this solid advice for buyers of car insurance:

"Fifteen minutes can save you 15% or more — and you don’t have to become a Geico consumer to make that happen.

When it comes to car insurance, Americans often can’t be bothered to shop around, surveys show. One in three drivers say they never shop around for car insurance quotes and another 30% say they only shop around every few years — which may explain why the average driver hasn’t switched car insurance companies in 12 years . . . .

A study released earlier this year . . . revealed that in 2014 just 16.8% of U.S. consumers shopped around for car insurance (they got an average of only 2.2 quotes when they did), and another survey released this year from the nonprofit Insurance Research Council found that only about a quarter of drivers had shopped for car insurance within the past year.

The reasons that Americans don’t shop around are likely due, in part, to the hurdles that come with it. Indeed, 88% of drivers find shopping for car insurance to be a frustrating experience -- with 50% saying that it’s too time consuming, 33% saying it’s hard to compare prices and 5% saying they don’t trust the advertised prices and have privacy concerns, according to a nationally representative survey of 500 adults by financial site NerdWallet.

The problem: Not shopping around is a very costly mistake. The average annual savings that drivers get by switching to a new insurer is $387, according to J.D. Power . . . . That means the average driver -- who . . . hasn’t switched car insurance companies in 12 years -- will waste more than $4,600 on auto insurance over that period.

The solution, of course, is a simple one: shop often — experts say you should review your policy and competitive policies every year— and shop smart. Here’s how to start the shopping process. . . .

Get at least three quotes . . . .

Make sure the quotes are for policies that are alike with the same limits on things like liability, collision, comprehensive, as well as the same deductible . . . . Those who haven’t shopped around in a while may need to up their liability coverage if they have more assets now, and if their car is much older now, may want to cut back their comprehensive coverage . . . .

Ask about discounts

When getting your quotes, ask the representative about any discounts you might qualify for that could lower your rates . . . . Common discounts might include: being a good student (77% of the insurance carriers surveyed by Insure.com offered this with an average 16% discount), having a home policy with the same company (68% offered this with a 9% discount), paying the bill upfront (46% offered this with a 9% discount), being married (41% offered this with a 14% discount) and taking a driver training course (41% offered this with a 7% average discount). You can find some of the less common discounts auto insurers may offer here."

Summing Up

We're seriously considering starting something like a 'Smart Buyer' Club of like minded individuals who want to help each other learn more about smart buying in order not to pay excessively for the multitude of products and services that we buy.

And whether the purchased item is car insurance, other insurance, car buying, home buying, appliance buying, stocks, mutual funds, mortgage loans, home equity loans, student loans, credit card charges, maintenance agreements, bank fees, stock brokerage fees, money management fees, or a wide variety of other fee based programs, it adds up to a whole bunch of money needlessly paid by 'non-smart' buyers and a whole bunch of money easily saved by 'smart buyers.'

Our 'Smart Buyer' Club's only goal will be to assist 'members' in becoming well informed with respect to how the buy/sell game is usually played by self interested sellers of all types.

We will help each 'Smart Buyer' to internalize and then share with fellow 'Smart Buyers' such things as why commissioned sales people and lenders of all kinds are incentivized to get the target buyer to purchase more expensive products and services than a 'Smart Buyer' would purchase.

And we will help each 'member' understand that the seller's or lender's offer of years of low monthly payments will lead to needlessly high interest and principal payments.

And finally, a 'Smart Buyer' will know that he has the power in any potential buy/sell transaction for one simple reason --- if no transaction is completed and no purchase is made, no commissions will be paid to the selling agent and no principal payments, interest charges, or other fees will go to the seller, servicer or lender. 100% of zero is zero.

Smokey's song told the 'Smart Buyer' Club's story in two words: 'Shop Around.'

That's my take, too. What about you?

Thanks. Bob.

1 comment:

  1. Pedro the Camel DriverJuly 23, 2015 at 8:07 AM

    Robinson married his fellow Miracles member Claudette Rogers in 1959. The couple had two children, son Berry Robinson (b. 1968), named after Motown's first label founder Berry Gordy, and daughter Tamla Robinson (b. 1969). Robinson has another son, Trey (b. 1984), with another woman, during his marriage to Claudette. After Robinson admitted this, he filed for legal separation and, later, divorce, which was granted in 1986. The Robinsons had separated once before, in 1974, and Robinson conducted an extramarital affair that became the concept of the song, "The Agony & The Ecstasy", later featured on A Quiet Storm.[9] (Smokey did more than just "shop around" no? Si!!)

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