Bottom Line
Insurance Update

Do you want to save thousands of dollars on insurance for the truck you just bought? I can show you a simple way to do just that, but you'll have to step off the yellow brick road that's leading you directly to your dealership's very own Wizard of Oz (a.k.a. the finance and insurance person). Caution: those bricks turn to solid gold bars, paid for with your money, once you enter his realm.

As an independent owner operator, you deserve the opportunity to take control of your own business and the insurance that protects it. Now's the time to get your head out of the clouds and look behind the curtain.

Let's say you're paying $100,000 for your new truck and financing it for five years, with a 10 percent interest rate, and your friend, the Wizard, has graciously included the physical damage insurance on your new truck within your financial package.

Pay attention, because now it gets interesting. Ten percent interest on a $100,000 truck over a period of five years totals approximately $27,517. However, since you're getting your physical damage insurance added in with the loan, the cost of the insurance along with the interest on the premium, will need to be included. This means that we need to do some math.

If the physical damage insurance premium on your truck for five years totals $16,980 (that's higher than OOIDA's rates, but we'll use this figure as an example), this means that you can expect to add approximately $4,670 in additional interest to your original finance charge for a total of $32,187 ($27,517 interest on truck plus $4,670 interest on insurance).

If we make it really simple and focus only on the insurance, you'll see that adding interest of $4,670 to your $16,980 premium, makes a whopping total of $21,650 for truck insurance. Do some more math, and you'll find that $360.83 of your truck payment will be for physical damage insurance premiums including the interest. That's what you'll pay the finance company if you decide it's more convenient to get everything in one big package deal.

Get your own physical damage insurance from an independent agency at the same price (or maybe less), but without the interest, and your monthly premiums would be $283 or lower, depending on the original cost of the insurance. That's $77.83 a month difference, or a savings of $4,670 over five years! Think about it – do you want to put a new gold bar in the Wizard's yellow brick road by opting for the package deal, or take your family on a nice vacation with the money you'll save by getting insurance on your own?

But won't the great and powerful Oz get mad and back out on the deal if you don't buy the truck insurance from him? It's true that you have to have insurance, or you can't take the truck off the lot. However, he can't force you to buy insurance from him as a condition of the sale. Does the Wizard even have a license to sell insurance to you? Maybe... or maybe not. The law requires him to have a license in order to sell insurance. You should ask him to make sure that he does. What if he offers to pay your first month's premium as an enticement? He'd be breaking the law.

It shouldn't take a diploma from the great Oz to prove that you've got the brains to know what to do next. You can make one phone call to OOIDA and save yourself at least $4,670 in interest charges on your truck insurance. You can save even more if you bypass the Wizard completely, and check into OOIDA's truck finance program. What do you have to lose?

You know you've got a heart, because it's pounding hard right now as you're making your decision. You've already proven that you have a brain because you've done the math and you know how much you could save by getting your own insurance. Now it's time to use your courage and take control. Click the heels of those boots together three times, while you dial 1-800-715-9369 and say... "There's no place like OOIDA for saving money on your insurance and financing for your truck." Welcome home.

March/April
Digital Edition