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More Personal Finance “Pearls”

Last month’s article, “Top 30 Wealth-Building Strategies To Boost Your Personal Finances” received many favorable comments from subscribers. Since then, we’ve uncovered the following additional money-saving “jewels.”

• Need to get rid of high interest rate credit card debt? Doctors can pay off card balances more quickly by transferring high interest rate balances to new cards offering 0% interest rate teasers for up to 12-24 months. While nearly all cards impose a transfer fee of 3-5%, the Slate card from Chase Visa does not, and provides 0% interest for 15 months on balance transfers and new purchases. Doctors need a credit score of 750-850 to qualify, according to LowCards.com.

• Save bundles on holiday shopping by scouring retailers’ websites for coupons and money-saving promotions at the checkout counter. No luck? Ask the checkout cashier. I recently saved 30% simply by asking the cashier if there were any discounts or promotions available. She cheerily directed me to the retailer’s website for the necessary promotion code in order to reap instant holiday savings.

• Avoid this little-known auto insurance rip off. If you’re in an auto accident where the other driver is at fault, you’re probably not going to recover everything that you should. That driver’s insurance company is not only required to restore your vehicle to its original condition, but is likely legally required to compensate you for its diminished value as well (meaning the loss in resale value that your vehicle suffered as a result of the crash). Unfortunately, many insurers deny that diminished value compensation is required at all. Even those that do, inevitably try to pay less than is fair.

Diminished value is a real loss. Even when the damage is perfectly repaired, having an accident in a vehicle’s history significantly reduces its resale value. Potential buyers worry that the vehicle may have other hidden problems.

The at-fault driver’s insurer may claim that diminished value is not covered, but that’s not true unless the accident occurred in Michigan. In Georgia, you’re entitled to diminished value compensation from your own insurance company even if you are at fault in the accident!

Never assume that an insurer’s initial diminished value offer is fair. Insurers generally use something called “Formula 17c” to determine diminished value, which never pays more than 10% of the vehicle’s Blue Book value, and often much less. In reality, even a fender bender will reduce resale value by at least 10%, while a more serious accident could whack your resale value by up to 25%, even if perfect repairs are made.

If you’ve been in an accident and an insurer is refusing to pay you fair diminished value, hire an appraiser (typically $250-$350) to produce a report establishing your diminished value loss. A list of qualified diminished value appraisers can be found at the Insurance Advocate Network website (www.iCAN2000.com) under “Local DV Professionals.” If there’s no qualified appraiser in your area, an online appraisal service can produce a report for around $200. This won’t be as persuasive as a local appraiser’s report because the online service won’t examine the damage in person. But if you use one of the four online services that are respected by insurers: Collision Claim Associates (866.438.6938, CollisionClaims.com), Collision Consulting (866.382.5246, CollisionConsulting.com), Wreck Check (281.741.1670, WreckCheck.org), or the Insurance Consumer Advocate Network (iCAN2000.com/dvdirect), the report will still be an effective negotiating tool.

When I was involved in a recent auto collision, I used this technique to get a check for over $4,000 from the at-fault driver’s insurance company. Moreover, I added to my savings by forwarding the diminished value loss report to the county tax office, which promptly reduced the value of my car for personal property tax purposes.

Cut hospital charges. There’s nothing more frustrating than trying to decipher hospital charges. While the website NerdWallet.com is best known for its credit card comparisons, it has an interesting new feature. At NerdWallet.com/health/hospitals, you can search local hospitals to find out what they charge for the most common surgeries and procedures. Since many doctors’ families are covered under higher deductible policies, including HSAs, this is an excellent resource for negotiating a lower fee with the hospital’s billing office.

• Consider a used car purchase since prices recently hit a four-year low, and may drop further. The average used car sold for $15,617 at a franchise dealership in the third quarter, the lowest since 2009 when the average was $14,808, according to the car pricing website Edmunds.com. Prices have been dropping for several reasons and may decline even further next year. New car buyers are flooding showrooms and with new car sales on track to exceed $15 million, huge numbers of trade-ins are resulting. In order to move them out, dealers have cut prices. Moreover, during the depths of The Great Recession (2009-2010), dealers offered cheap lease deals to get new cars out of the showroom and into the hands of recession-weary drivers who couldn’t afford or didn’t want higher purchase payments. Now, those leased cars are coming back in to be sold as used cars, adding to the glut.

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The McGill Advisory is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.

Copyright © 2017 John K. McGill & Company, Inc. All Rights Reserved.