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  • Car Emergency Kit + Good Hands Roadside Assistance

    Last month, I gave you the details on AllState’s new Good Hands Roadside Assistance Program. It’s a pay-as-you-go program so unlike other programs where you have to pay a monthly fee for a service you’ll hopefully never need, with Good Hands Roadside Assistance, you only pay if and when you need help. It’s easy to register using the widget below:

    While you’re waiting for Good Hands Roadside Assistance to arrive, you’ll be happy if you’ve packed a few essentials in an emergency car kit. Grab a durable tote or backpack, and stock it with the following:

    • Battery powered radio and extra batteries
    • Flashlight and extra batteries
    • Blanket, gloves and hat, rain poncho
    • First aid kit
    • Bottled water and non-perishable high-energy foods, such as granola bars, raisins and peanut butter
    • Maps
    • Bungee cords or Rope
    • Extra cash and change
    • Disposable camera if your cell doesn’t have a camera (for documenting an accident)
    • Fire extinguisher
    • Compass
    • Roadside flares to help keep you safe while you’re waiting

    If you have young children, you’ll also want to stash some extra clothes and diapers for them. And if you have an infant, you might put some powdered formula in there even if you are breastfeeding since you might not be with your baby during the emergency.

    What else do you keep in your car for emergencies?

    Disclosure: Allstate is compensating me to help spread the word about their Good Hands Roadside Assistance program. Any opinions are my own. Read the full CFO disclosure policy here.

    Becoming a one-car family

    We were rear-ended the week before Thanksgiving, and although everyone was okay, the damage to the car has proven extensive. The original 2 1/2 week estimate for repairs is now at a solid 4 weeks. Our insurance policy includes rental coverage, but we’d still have to pay 20% of the cost. Plus there’s the hassle of renting and driving an unfamiliar car.

    So we’ve been getting by with only one car for the last three weeks. (It helps that Marc and I commute together.) We’ve been a little surprised to discover what’s actually within walking distance of our house. The excursions take one to two hours, but I’ve found that when time is not of the essence, a walk to the bank, Pavilions or CVS is actually quite pleasant. Of course, I can’t buy too much, and nothing perishable.

    So the last three weeks have proven that we could, if necessary, become a one-car family.

    The savings would be significant, even though both of our cars are fully paid for. We pay about $1000 per year in insurance and registration on our older car, plus approximately $25 in gas per month. And maintenance costs are probably about $200-500 per year, depending on the year. That adds up to a savings of $1500-1800 per year, or $125-150 per month.

    We are going to keep both cars, though, simply because having two cars is a convenience that we can afford – and while having only one car has been manageable, it hasn’t been preferable. But I do think that we’ll consider walking a realistic option for a handful of locations from now on, especially when we’re not in a rush.

    Something I wish I’d known three months ago: Some credit card issuers do not allow merchants to impose a maximum

    As you might recall, back in March, Marc and I bought a new car. I had intended to make a down payment of over $10,000 on my credit card, but the sales manager told me that the maximum I could pay with a credit card was $5,000. When I mentioned this on CFO, I received a comment from MITBeta stating that Visa and Mastercard do not allow merchants to impose minimum or maximum limits on purchases.

    I had known that merchants can’t impose a minimum purchase amount, and that the mom and pop stores that have signs that say “Credit card purchase requires $10 minimum” were in violation of their merchant agreement. But it never occurred to me that the opposite might also be true.

    I was reminded of this issue by this Bankrate.com article. The author quotes a Visa rep confirming that their “rules require merchants to always honor valid Visa cards regardless of purchase amount — large or small.” (Mastercard has the same rules, but American Express allows merchants to limit transactions.)

    If I had known this back in March, I definitely would have insisted on being allowed to make the full down payment that I wanted to make. And, according to the Bankrate article, the dealership would most likely have given in when I informed them that I would pursue the issue with Visa. The article’s author points out that the dealer might want to re-negotiate a deal under such circumstances, but it wouldn’t have worked in our case. Marc and I had made clear when negotiating our old car’s trade-in value that we were prepared to walk away.

    We don’t plan to buy a new car for at least another five years, but I plan on paying cash for that car. In fact, I’ve already started saving money for it each month. And in five years, I’ll be paying for that new car with a credit card!

    We’ve paid off the car – now what?

    As I mentioned yesterday, we were able to pay off our car loan less than two months after we bought the car. One reason we were able to achieve this is because we were setting a substantial amount aside in savings each month specifically for the car purchase. But now that the car is paid off, I thought I’d mention some of our other financial goals and how we’re going to get there.

    The first thing we are going to do is continue saving for a new car. That might sound strange, considering that we just bought one. But we’ve decided that we never want to take out a car loan again. Every car we buy from now on will be paid for with cash. Our next car purchase should be in about five years, and we’ll probably spend about the same amount of money. Saving $325 per month for the next five years will give us $19,500 plus interest. We should be able to pay the remaining cost of the car with the trade-in value of our current car and additional savings. I’m not contributing more to the car fund because . . .

    I am also significantly increasing the extra amount that we pay on my student loans each month. At this rate, my loans should be completely paid off in less than two years.

    Finally, I am increasing the amount we put into “regular” savings each month. In addition to what I have budgeted, I’ll be snowflaking all extra income into our savings. This savings is money that will pay for our vacation in Las Vegas in the fall (we’re going for a relative’s wedding), as well as any other unexpected expenses that arise. Once we’ve saved a substantial amount, I’ll use the money to make a large principal payment on my student loans, and then we’ll start over with the savings. (Note: This isn’t our emergency fund, which will remain untouched.) While I could put this money toward my student loans to begin with, I like having the extra cushion in my savings account. (Especially since we have talked about installing a new air conditioning system, which would run about $3500.)

    Once my student loans are gone, we’ll be debt-free except for our mortgage. I’m really looking forward to celebrating that milestone!

    Our car loan is officially paid off – in less than two months!

    I am thrilled to report that our car loan is officially paid off. We took out the loan in the middle of March, so we’ve paid it off in less than two months!

    How did we do it? The most important thing we did was buy a car that we could easily afford. We also negotiated a great price. And, we saved up for the purchase. All of this meant that the loan wasn’t a very big loan. And it helped to have good credit, so that we could get a loan with a great rate.

    As for paying off the loan itself, we basically snowflaked all available funds toward the loan. The funds included the amount we had been saving monthly for the car purchase, the amount that I normally would have transferred into our savings account, our tax refund, our tax rebate, and some additional small amounts of income that trickled in during the last two months.

    Considering we took 4 1/2 years to pay off our last car loan, I’m extremely pleased that we were pretty much able to meet my 2008 financial goal of paying cash for a new car.

    What’s our next financial goal? Stay tuned . . . I’ll share that with you soon.

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