What's New in Oregon
We try to stay in touch with the latest insurance related developments happening in Oregon. What happens in Salem can affect all of us from the price of gasoline to how much it will cost to drive on our freeways. Insurance related laws and orders are considered and passed constantly that will affect how much you or your insurance company will pay and the limit you will receive after an accident. The companies are constantly inventing ways adjust how they charge based on the analysis of data they collect on you, your car and all drivers. We just want you to be informed so you can make the right decision.

1. Price of the Vehicle. This one is straightforward. How much did you pay for the car? I could include another to the list and make it eight. How much did the interest cost if you financed the automobile? Because you paid $25,000 for the purchase price, you ultimately might pay close to double that over the next five to seven years, including finance charges. This question applies to new or used vehicles.

2. Fuel. How fuel-efficient is the car? Does it get 10 mpg or 40? What type of fuel does your car take? Regular gas for a standard car, or is it a high-performance vehicle that requires premium? Is your car a hybrid with an electric motor that will assist in city stop-and-go traffic? Did you purchase a plug-in version of the hybrid that might get better mileage on long distances? How about an electric car that can go 250 miles on a single charge? The size and efficiency of the automobile will significantly influence the cost to power it.

3. Maintenance. How much does it cost to change the oil and maintain the other fluids? Can you do it yourself, or do you have to take your car to a dealer? How much are brake pads and calipers and other consumable parts on your car, like tires? You’d be surprised how much the cost to maintain one model of a vehicle varies from another.

4. Repair. Because a car is new doesn’t mean it won’t need repairs. If you buy a used car, check the maintenance and repair history, if available. How many recalls did the vehicle have? Were the recall repairs done? Maybe you could look up what certain parts would cost, like an alternator or transmission, for the automobile you are considering. If the car is cheap to buy, it might be expensive to fix. Weigh possible or known repair costs before you purchase.

5. Licensing and Registration. The age of the car might determine how often you must renew your tags and registration. Newer cars get a longer time between renewals than older cars. Does your vehicle have special plates? That could cost you a couple hundred more each renewal if they do. Keep your title in a safe place. Replacements might cost you.

6. Insurance. We are experts in this area. We beg you to please call or text us with a vehicle identification number before you commit to buying a car. Please! Why? Because EVERY vehicle has a different price for liability or full coverage. If a model tests poorly after manufacture, then the base price for insurance will be higher. Suppose the car has experienced multiple accidents or has a high mechanical failure rate and requires constant towing. Those incidents are recorded and will show up in the insurance companies’ reports to determine auto insurance prices. We’re not joking. Even if your car was stolen and recovered without damage, insurance on that car will cost you more.

We get comments all the time like, “Why is it so high? The car is old.” We aren’t insuring the car! We insure your ability to drive the vehicle in its current condition. There is a big difference. Another factor popped up in the last few years: How many seats does the car have? “What does that have to do with anything?” you ask. If passengers occupy all the seats of a seven-passenger van, and the driver runs off the road, how many passengers’ medical bills will the insurance company pay? Seven! More seats in the car usually means a higher price for the insurance.

7. Depreciation. This cost is tough to determine. Let’s say you are buying a brand-new car. It’s impossible to know how much that car will be worth in three to five years when you are likely to sell it. What you could do is look at other years of the same models, see what they sold for new, then subtract what they are worth now. Divide that figure by the cost new, and you have a depreciation percentage. For example, if the car sold for $20,000 five years ago and is worth $10,000 now, the depreciation would be 50%. Compare that to a model similar to the one you want to buy, which sold for $25,000 five years ago but is still worth $15,000 today; the percentage would be 40%. A little better. That still doesn’t mean your car will have the same result. Perhaps that model and manufacturer have improved in quality. For the math geeks out there, depreciation is something to consider.