Important Things to Look for in a Breakdown Cover Policy

There are some very important things that you will need to focus on when it comes to a breakdown cover policy. When you are fully aware of these things, it is much easier to get a policy that matches your needs. You will also be able to get your money’s worth, which is something everyone wants. There is no point in spending any amount of money on this type of cover if you don’t get exactly what you need in every regard.

Limitations

One of the most important things to keep an eye out for when it comes to breakdown cover policies is the limitations they place on your service. Some of these providers put a limit on the number of callouts you can make each year. This is definitely one of the more important things to look for. You should try to find a company that doesn’t limit callouts at all so that you won’t have to worry about being limited in this way.

Onward Travel

The Onward Travel feature in many breakdown cover policies gives you the ability to get to your destination even if your car has to be taken to a garage for repairs. It will ensure that you get to wherever you need to go, which will minimize your inconvenience in this type of situation. There are also a lot of policies that will even give you a night or two in a local hotel if you happen to break down far from home. This can be very useful if you need to get your vehicle repaired while you are on a long trip.

Home Start

There is also Home Start, which provides you with breakdown cover services even when your vehicle is in your driveway at home. Whether your battery is dead or you have locked your keys in your car, these services can be extremely useful. This is sometimes a feature that you have to pay extra for, but some providers include it as standard in their policies. Either way, it is something that you should consider getting.

European Breakdown Cover

If you travel across Europe fairly often, you will probably want to look for a policy that includes European breakdown cover. This will almost certainly cost more than a standard policy, but it is well worth it depending on how often you travel outside of the UK. You will be able to call a technician to get help no matter where you are in Europe. The response times vary depending on the area you are in, but it’s still worth considering. You will have total peace of mind when you go on long trips, which you just cannot put a price on.

Hidden Fees

A vast majority of breakdown cover providers do not charge any hidden fees, but it’s still something that you should keep an eye out for. You will need to make sure that you don’t pay any more than you have to for these services. Look for any fees that appear suspicious and ask the provider about them before making a decision. This will help you to get the best overall deal and ultimately save money. When you compare roadside assistance cover this is definitely something you should look out for.

Vehicle Recovery

Vehicle recover is an aspect of breakdown cover that allows you to get your vehicle towed to the nearest garage when it breaks down. Some policies will allow you to get it towed to wherever you want in the entire UK, which is always nice. This is something else that you will need to take a close look at before deciding which policy to get. You’ll want to be able to get your car towed to wherever you want to reduce your inconvenience if your car breaks down and needs to be repaired. This is especially important if you have a certain garage that you get all of your work done at.

Vehicles Covered

Some breakdown cover policies cover only certain types of vehicles like sedans, SUVs and pickup trucks. If you have a motorcycle or recreational vehicle (RV), you will need to make sure it is covered under the policy before moving forward. If you have a certain type of vehicle, there is a chance that you’ll need to get a different policy and possibly pay a little more.

By taking the time to consider all of these things before getting breakdown cover, you will greatly improve your chances of getting exactly what you need overall. There are many different providers to consider before you make your final selection. The more time you spend doing this research, the better your chances are of getting your needs met. You should take as much time as necessary to review the policies of various providers. This will make it much easier to get your money’s worth in the end.

Will my Mortgage Interest Rate Make a Huge Difference Long Term?

As we take on a mortgage for between twenty and thirty years, it can be easy to think that interest rates will not make that much difference as the term is so long. If the difference between two lenders is very small with regards to the rates, then it is easy to think that it is not worth worrying too much as it will make very little difference. However, it is important to understand about the way that charges and rates work for mortgages and therefore whether changing to a lower rate will help.

How mortgage charges work

Mortgage lenders charge in a selection of ways but interest rate is the main one. You may be charged fees for setting up a mortgage, for overpaying, for switching lenders, for repaying early and all will charge for missing repayments. However, the interest rate is the one that we tend to compare them on. This is because these one-off charges tend to be small in comparison to the interest which has to be paid until the loan is fully repaid. The interest is charged on the money owed and so the more you owe, the more interest you will pay in monetary terms. So if you have a repayment mortgage, then you will repay some of what you owe each month and this means that the amount that you pay in interest would fall each month if the rate of interest stayed the same. With an interest only mortgage, you do not have to repay any of the balance until the mortgage term is up which means that your interest payments would stay the same. This means that assuming both of these were charged at the same rate of interest, the interest only would be a lot more expensive. However, you should be making monthly investments to build up a lump sum to repay your mortgage at the end of the term. This money should be making a better return than you are paying in interest which means that you should be better off by the end of the mortgage term. This means that the rate of interest can be much more significant for those with interest only mortgages but also for those who owe more money as they are being charged interest on more.

Can savings be made by swapping?

Switching mortgages can feel like a big effort for very little. You will have to research different companies and find out what their rates are. As well as comparing rates though, you also need to take into account charges. You may be charged for leaving your current lender, for example and you may be charged for joining a new one. It is really important to find out what these charges are and calculate whether you will still make savings by switching despite having to pay them.

Significant savings can be made by swapping in some cases though. Even a small difference in interest rates can make a significant difference, especially if you owe a lot of money still. It can be worth calculating to find out. Find out form your current lender what your interest charges are and then ask the lenders you are considering what they will be. You will then be able to compare. If you are saving £20 a month it might not seem like much but if you add that up over what is left of your mortgage term it could be significant. If it is over ten years then you will save £2400, for example, which is not a n insignificant sum of money and all you need to do is to fill in a few forms. If you check every five years or so and switch to the cheaper lender then you could end up saving even more money. How much you can save will all depend on how competitive your lender is.

Is it worth the effort?

It is really up to you to decide. For some households even a very small saving will make a big difference to them but for others they will want to see a significant saving to make it worthwhile. However, it is worth noting that if you regularly switch to other providers as well such as insurance and utilities, then you can save money in lots of areas and make significant gains by adding up those savings. You may also think that you just do not want to pay more than you have to for anything as then you will have extra money to treat yourself, save up or spend on other things. It will not take that much time to look at what other lenders are offering and even to switch over to them. It could be just a little work for a huge saving and so it is well worth considering.

Should I Get a Fixed Rate Loan?

There are two main types of loan and they are a fixed rate loan and a variable rate loan. It is important to understand what the difference is between them so that you can work out whether one or the other is better for you and your needs.

What is a fixed rate loan?

A fixed rate loan will have a fixed rate of interest either for the whole loan term or for a certain part of a loan. For example, a fixed rate mortgage will generally only have the fixed rate for three to five years and then will move onto a variable rate, whereas a payday loan such as those offered by Emu will have a fixed rate for the who loan period which is likely to just be a few weeks.

If you feel that the interest rate is likely to rise during the fixed rate term, then taking a loan like this will protect you form this rate rise. However, a fixed rate tends to start out dearer than a variable rate so if rates do not go up you could end up paying more. A fixed rate will also not go down if the base rate drops, whereas a variable rate might drop. Some people do like the fact that with a fixed rate they will know exactly how much they will have to repay each month and if they are short of money, then this could mean that they do not take on the risk that their repayments might go up.

What is a variable rate loan?

A variable rate loan will vary in interest. The lender will be able to put the interest rate up and down when they wish. Often this will be in response to a change in the base rate, however, they are more likely to put a rate up when the base rate rises than they are to put it down if the base rate falls. Some variable rate loans are set up as a tracker which means they will track the base rate and this will mean they have to go down when the rate falls, but they will also always go up when it rises but they should not change at any other time (but this will depend on the way that the loan is set up). Some lenders will change the rates in between base rates changes as well, especially if the rate has not gone up for a long time.

Some people like the fact that the rate can go down and therefore if they choose a variable rate they will not be stuck into a higher one.

Which is best?

It is also worth noting that many fixed rate loans will tie you in to their loan. This means that if you want to swap to a cheaper lender or even change loans with the same lender then you will not be able to do this without pay a fee. These fees can be quite small but sometimes they can be very high. It is worth finding out if there is a fee and how much it will be so that you are prepared for this when you sign up for the loan.

As you can see it can be quite tricky deciding which loan type to get. If you feel that you may struggle with repayments if they go up any higher then fixing can protect you against rate changes and mean that you will be more likely to be able to make all of your repayments on time. If you are confident that you will be able to make the repayments, then it is wise to calculate how much they might go up if rates rise. You will then have an idea of whether you will still be able to pay these amounts of money and this will help you to know whether you will be able to afford a variable rate.

It can be hard to predict the future, even in the short term. It is therefore very hard to know whether rates might rise or fall and whether your capability of making repayments will change as well. However, if you have a stable job in a company that is doing well then you should have more confidence compared with someone that has a temporary job or is working for a struggling company. Also, with rates, if they are high, then they are more likely to fall than rise but if they are low, they may go up. However, this is more speculation than prediction and so it is good to be prepared for the worst, just in case. You can protect yourself against rate changes by having some savings behind you which will help you to afford a higher amount of necessary or have a plan on how you would reduce spending or earn more should you need to.