Amazon and Tiny Homes (How to Buy and Build One)

Amazon has progressively grown as they have dabbled in the retail, book publishing, and grocery industry. Aside from the various industries they associate themselves with, their delivery time is impeccable, and their customer service is not too shabby either. So how surprising is it to know Amazon can help you step into homeownership?

For the average person, it is probably not too surprising. As people have grown more fond of minimalistic living, tiny homes have also grown in popularity. Since Amazon is great at keeping up with trends and expanding into other industries, it is not unusual for Amazon to start to offer Tiny Home options through their site.

But before you get excited, order your tiny house builder kit, and start building your home, be careful what you share online because home insurance and social media can be a bad mixture when trying to find low rates. Insurance companies use social media to configure rates for clients, so be sure to follow this guide thoroughly before sharing your new home building project with all of your followers!

How can Amazon sell tiny homes?

Tiny homes are all about living small and minimalistic. There is no one definition for tiny homes, but they are usually homes that are much smaller than the average house. Their popularity has increased throughout the United States as citizens search for ways to diminish the economic and financial strain of life.

Though there is not a solid definition for a tiny home, the goal is to live small while still having everything you need. For a general reference, tiny homes are usually around 2.4 x 5 meters and have a living area, sleeping loft, kitchen, and bathroom. They are intended to be easily moved, so they are typically constructed to fit a trailer.

The structure of these tiny homes is very similar to sheds and small cabins which is how Amazon can sell them. You can find these structures listed as “Cabin Kit” on Amazon’s website and they sell for roughly 20 thousand dollars — and this price is already cheaper than what your average home would sell for.

Construction of Your Amazon-Bought Tiny Home

Amazon advertises that it can only take two days to construct these tiny homes with the kits they deliver right to your doorstep. Constructing a traditional home requires one having to visit multiple stores to get the needed materials. So having all of the supplies already together gives an advantage to this route.

One of the tiny home designs sold is called the Lillevilla Getaway. It is a wooden home that features three rooms on the main level and a loft on the attic-level, averaging 292 square feet. It is promoted as a “build-it-yourself” kit, and the home includes a deck.

Now, since this is something that the average person can build, it does not come with instructions for installing gas, water, electricity, and any other utility needed within a home. You can construct the foundation of your home by yourself, but unless you are equipped with the necessary electrical skills, you will have to call in professionals.

To make up for the lack of utilities, these homes come with windows to let in natural sunlight. Installing utilities can cost anywhere from ten to thirty thousand dollars. Add that to the initial cost, updating this tiny home from Amazon with utilities would be just under $100,000.

The average cost of a home is just around $200,000 in the United States. If you take this cheaper route to own your home, be sure to avoid home improvement scams when searching for a professional to install utilities which could cost you more money and time to fix.

Location of Your Amazon-Bought Tiny Home

Now that you know that Amazon ships ready to build home kits and that you have to find a professional to install utilities, you have to figure out where to set up your future home.  This should actually be decided before you order everything and hire someone to construct your gas, water, and other utilities.

The costs of living in the suburbs can actually be unreasonably high due to Home Owner Association (HOA) fees, so if saving money is your goal, you should look to stay on the outskirts of the suburbs or even in a more rural setting.

Being that these types of tiny homes are intended to stay in one place once finished, it would be ideal to buy a plot of land and install a permanent foundation beneath it. There are also tiny home communities where people can rent a lot and place their tiny home on the land with other tiny home homeowners.

The instructions for the building of the foundation on a tiny home are pretty flexible and can be tweaked for creating a foundation that is not as permanent.

Depending on your desired location, purchasing one acre of land can range from $5,000 to $45,000 while renting a lot to place your tiny home on can cost about one to two hundred dollars a month. Choosing between the two options depends solely on personal preferences and circumstances.

Is tiny-home living right for me?

Choosing to live in a tiny house is a decision that only you can make because only you know what your desires in life are more than anyone else. If you are someone who loves to go big and to be dramatic with decor, then this may not be the route you want to take.

This type of home is ideal for someone who enjoys leading a minimalist lifestyle. You should also keep in mind that living in a small area can present unexpected issues down the road. For example, expecting a new baby can make living in a tiny home uncomfortable.

Before you make the decision to plunge into the tiny home life, weigh out every potential possibility.

If you decide that you want to take this route to homeownership, take the time to save your money for this project for any unexpected mishaps can happen. As you save, be sure to avoid falling short on your financial goals so you can live care-free in your tiny-home as soon as possible.

How Multiple Car Loans Can Increase Your Insurance Rates

One of the most expensive household bills is insurance, no matter what type of insurance you are paying for, whether home, car or health insurance. People are constantly questioning how they can save money on car insurance or how much does adding a second car to insurance cost because they want to keep more of their money in their pockets.

Despite constantly searching for ways to save money on car insurance, people continuously make decisions that raise their rates, sometimes without even realizing the consequences. One of those decisions is financing a car or taking out a car loan in order to purchase a newer car.

So although you may not realize it, car loans can be counterproductive to saving money on car insurance

How Financing and Car Insurance Work Against You

Even though life happens and you cannot help but make certain decisions, financing a car probably will hinder the goal of reducing your monthly bills.

In fact, it can actually increase your monthly bills because financing a car completely alters the insurance requirements you must meet. There is very little flexibility and freedom when choosing insurance coverage because your lender will also be regulating your insurance requirements.

Not following their insurance coverage requirements can result in forfeiting your agreement and losing your car which, in itself, can be an added expense.

Often lenders require coverage throughout the entire year, even if you store a vehicle or do not use it. Additionally, lenders require physical damage coverage. This coverage increases your insurance rates if you were not already planning on buying that type of coverage.

You may not be able to easily shop around for insurance coverage when financing a car due to a number of reasons.

#1 – Lenders Require Full Coverage

In most states, there is a minimum coverage requirement for car insurance, but most lenders require more than the minimum. This is the top expense when you insure a car that has a lien on it because lenders require drivers to have comprehensive and collision coverage.

Aside from paying more for the comprehensive and collision coverage, insurers note that most people who are leasing a car need to have a $500 deductible for both coverages. Having a lower deductible usually increases the cost of monthly payments.

If you were to pay off the remaining balance to your car loan, you could be charged a cancellation fee for ending the specific coverage you have on your vehicle. This equals more money out of your pocket.

Now imagine how much money you will spend when you have multiple outstanding auto loans.

#2 – Relocating Can Increase Insurance Costs

Relocating to another city or even moving into another home can present a number of unexpected costs on its own, but moving can even increase your insurance rates. Usually an increase happens if the area you are moving to has more traffic and people or if you are moving somewhere where your car will not be stored in a garage or covered lot.

Surprisingly, even if you are moving across the street from your job and never use your car, you can still be charged the same rates as if you were driving. This can be counterproductive to your saving goals, but because of the lender requirements, you may still have to pay that sum of money to keep your car insured.

#3 – Your Lender Becomes a Payee

Lenders almost always request to be listed as the payee or the additional insured on your insurance policy. So if your car is totaled during a car accident, they will receive the payout from your insurance provider, not you.

Adding your lender to your policy does not cost more money.

But if, for example, you total your car after being hit unexpectedly and the amount of money the insurance company offers does not cover the total of your car loan. Well, the lender will receive the payout, and you will be stuck with a remaining car loan balance without a car.

Now you have to find a way to pay off the remainder of the loan and find a new car. Once you find a new car, you will have to spend more money on insuring that new vehicle as well. So in a matter of a few days, you could be out of thousands of dollars.

#4 – Insurance Lapse Fees from Your Lender

Since your lender is listed as a loss payee on your insurance plan, they will be notified if you lapse or cancel your policy. Similar to how the state charges you fees for not keeping up your car insurance, your lender can do the same.

Being that following certain insurance requirements is a part of your loan agreement, you will be in breach of contract if you lapse on your insurance. A lapse can result in them charging lapse or cancellation fees. The worst-case scenario is that you lose your car or the lender increases your car loan rates.

Beyond the fees implemented on you from your lender, the state will also charge fees and can suspend your registration. So not only will you have to pay your lender, but you will also have to pay your state to avoid having your car towed or ticketing while operating your vehicle.

#5 – Having a Newer or Older Car

If you are financing an older vehicle, your insurance rates may be higher because your car is more of a risk than a newer one. Older cars are prone to breaking down and having more technical difficulties than newer vehicles.

However, on the other hand, newer cars can increase your insurance rates as well.

If you are financing a newer and more expensive car, your insurance provider may charge you more because the expensive car would cost more to fix. Financing alone already spikes your rates, so adding these two factors on top of it only puts the odds against you.

Several Factors Impact Insurance Rates

There are other factors that could make insurance rates higher when you are financing a car such as your credit history, specifically your payment history and debt. Your driving history and any moving violations you have received, and even where you live and work can affect your rates.

One of the most important things you can do to keep your insurance rates low is to be smart with your money. An easy way of being smart with your money means knowing how multiple car loans will impact your rates, and making the right decisions based on that knowledge.

 

 

 

Imani Francies writes and researches for the auto insurance comparison site, AutoInsurance.org. She earned a Bachelor of Arts in Film and Media and specializes in various forms of media marketing.

 

Reasons to Prioritize Paying off Your Car Loan

When you pay off your car loan, feel free to celebrate! This is a major milestone. After devoting anywhere from 24 months to 84 months to such a large expense, no longer having that bill is quite a welcome relief.

And you can give yourself an extra reason to celebrate this event. Contact your insurance company and see the ways you can reduce your premiums with your new status. But don’t just focus on car insurance policy changes directly related to paying off your car loan.

There is a long list of discounts you owe it to yourself to explore. Most insurance companies make it fairly easy to look into them.

State Farm does this the best with their Discount Double Check program. What does discount double check mean? This program can help you save up to 40 percent on your car insurance rates.

What Happens When You Pay Off Your Car Loan

Obviously, you no longer have that monthly outlay for your car or possibly your child’s car. Did you know that these days, a car loan is one of the things parents of millennials are likely to pay for?

But you need to know what else actually happens when you pay your car loan off. Here are a few specific things that come with this financial milestone.

#1 – Your Car Title is Yours

Luckily, getting your car title takes virtually no effort on your part. After you make your last payment to the bank (or dealership), you will receive your title in the mail.

If you don’t receive your title in a few weeks, contact the bank that had your car loan to find out when you will receive it. If more time passes without receiving your title, then get in touch with your local DMV.

Your car title is important for your records, and it is needed for selling your car. Additionally, it can be used as collateral when you apply for credit.

#2 – Your Finances Have Some Flexibility

The urge is understandable to now see that car loan money as “play money.” You can treat yourself a little bit, but try to be smart. Don’t spend money just because you have it. You can reevaluate your budget and use these funds wisely.

First, think of your car. Yes, your loan is checked off, but there will always be gas, regular maintenance, the possibility of repairs, and the cost of any modifications you may wish to make.

You may even want to think ahead to your next car. If you save money, you can get a smaller car loan or perhaps you won’t even need a car loan at all.

Second, think of your car insurance. Having extra money put away can lower your insurance rates even more. You’ll be able to be better prepared for those unexpected costs if you save now.

#3 – Your Insurance Policy Needs Updated

Your initial contact with your car insurance company is to share the news that you paid off your loan. You need to do this in order for the lien holder to be removed from your policy, but you don’t need to wait until you have the title in hand.

This first step with your insurance company is essential. Without it, if your vehicle was totaled, the insurance payment would go to the lender named on your policy, not you.

Review Your Car Insurance for a Paid Off Vehicle

While there are common car insurance milestones you can benefit from like turning 25, getting married, and retiring, truly owning your own vehicle can be another one.

#1 – Check Collision and Comprehensive Coverage

Most lenders require additional insurance beyond the state-required minimum collision, which pays for vehicle damage caused by crashes and comprehensive, which pays for damages not related to an accident such as theft, falling tree, or a deer running into the road.

Check the car insurance requirements in your state. You may be able to drop collision and comprehensive coverage when you have fulfilled your loan responsibilities. If you can, just take into account that if you get into an accident, you may be responsible for covering repair costs or a new vehicle.

Shortly after your car is paid off, you may want to review whether to drop or not. Again, dropping this coverage is easier to do the bigger your emergency fund is.

#2 – Update Your Deductible

Now that you have a few hundred dollars extra a month, perhaps you can put all or a portion of that into savings, raise your deductible, and lower your car insurance rate.

If you are required to retain your collision and comprehensive coverage or if you choose to do so, you can save on your premium costs by raising your deductible.Since you’re accepting more risk, that gives your insurance company less risk, so they pass that savings on to you.

Just make sure you can afford to do it.

The deductible is the amount of money you will pay out-of-pocket when you make a claim. So if you are raising your deductible, have that extra amount of money in reserve so you’re not in trouble in the event of an accident.

Keep Saving with Discounts on Car Insurance

When you review your coverage with your insurance company, also ask them about all of the discounts they offer.

Common Car Insurance Discounts

Some common car insurance discounts include:

  • Multi-Policy – If you bundle your home insurance policy and auto insurance policy with one provider, you could save up to 20 percent on insurance rates.
  • Multi-Car – You will have a cheaper rate if you insure all of your vehicles together rather than individually.
  • Good Driver – This discount is usually for every driver who has been accident-free for a period of three to five years.
  • Good Student – Good grades ( usually a 3.0 grade point average) can translate to being rewarded with a discount.

Hidden Car Insurance Discounts

Don’t be shy in asking about these additional discounts:

  • Defensive Driving – Find classes in your area
  • Military – active and veterans
  • Group Affiliations – employment, service, or membership
  • Occupations – nurses and doctors, first responders, and federal employees
  • Car Safety Features – extra airbags, anti-lock brakes, anti-theft
  • Customer Loyalty – staying with the same insurance provider

Compare Car Insurance to Save

Shop around for car insurance at least annually. You may be happy with the changes already made to your car insurance just from now owning your car.

But check out at least a few other companies, and don’t just compare rate quotes. Check into their financial and consumer ratings as well. Seeing if you can do better with another company is another tip on how to save on your auto insurance once you’ve paid off your car loan.