Most people who have driven for any length of time have either had to have their water pump replaced or have known someone who has.  The water pump is just one of those parts of your car that goes bad – usually around 100,000 miles or so.  Interestingly enough, the water pump on a car will usually go out before the water pump on a truck – trucks, having larger, more robust engines, usually have larger, more robust water pumps.  In fact, the water pump is usually the first part of the engine to need significant repairs or replacement.  So what does the water pump actually do?

Think about what happens in your car’s engine.  The engine itself is made of steel and small explosions take place in every cylinder.  Explosions generate heat, so your engine gets hot.  Since thousands of those explosions may occur every minute, your engine gets really hot – so hot, in fact, that the steel can warp. Obviously, if this unfortunate scenario occurs, you’re in for a pretty bad day – and some pretty expensive bills – when you take your car into the shop for repairs.

Something has to keep your engine cool enough to keep it from warping.  Enter the mighty little water pump.  The water pump circulates a mixture of water and coolant – also known as antifreeze – through the engine, through the radiator for cooling and then back again.

As the water pump circulates water to and from the engine, the water and coolant mixture picks up heat, taking it away from the engine and cooling the engine down.  That water and coolant mixture then enters the radiator.  The radiator combines a large surface area and the cooling power of a fan to lower the temperature of the water and coolant mixture.  From there, the water pump sends it back to the engine again and the cycle repeats.

The water pump gets its power to run from the engine itself through a series of belts and pulleys.  Depending on the car, the water pump can either be easily accessible and simple to replace or harder to access and complicated to replace.  Unfortunately, the ease of repairing or replacing the water pump doesn’t seem to correlate with the auto models that need these new parts more frequently.

In addition, a thermostat in your engine helps the water pump know when it needs to step up its work to prevent the engine from overheating.  A car that is beginning to “run hot” most likely has a thermostat that’s beginning to fail and needs to be replaced, or it could need more water and coolant.  You’ll need a mechanic to figure out which is the case.  When the water pump fails, the engine will overheat.  If this occurs, you’ll notice the engine temperature climbing and not coming back down.  If this is happening to you, pull over immediately and have your car towed to your mechanic to avoid permanent damage to the car.

Your auto insurance is a personal thing and as such, it may or may not cover you if you use your car in your business.  Generally, a personal auto insurance policy won’t cover damage to your vehicle if it’s being used for business purposes.

“But,” you say, “My policy has ‘business-use’ coverage.”  Be sure to check on that.  How you define “business use” and how your insurance company defines “business use” may not be the same thing.  You may find yourself a bit short if, or when, an accident happens.  This may especially be the case if your liability limits aren’t high enough to cover the damage.  Make sure you’re protected.  The best way to go about that is to check with your agent.

See that you are not only covered for business use, but how the policy defines business use.  Ensure that there is no miscommunication between you and the insurance company and make sure that what you think is going on is really what the policy says.

In addition, it isn’t a simple matter of liability, though that could be a very expensive proposition.  There may also be some savings in overall insurance costs for you and your family by pursuing. Find a good agent who has other commercial clients and sit down for a review of your situation.

The following are some questions that you can ask either your insurance agent or a representative of the insurance company.

How does your company define “commercial use?”  Each insurer may have a different idea.  Some may simply define it as transporting goods for a fee, which could include pizza and paper delivery or catering.  Another company may include consulting services, landscaping or snowplowing.  Others may include day care or church van services.  There may even be a case where real estate agents may qualify.  If you fall into any one of these categories, you should talk to someone about a commercial auto policy.

What are the liability limits of my current policy?  A commercial policy should offer higher liability limits – much higher limits in most cases.  Larger vehicles, like delivery vans and trucks, can cause more damage than a passenger car and your policy should reflect that.  Your current policy probably doesn’t have sufficient liability protection.

Does my personal policy cover me for business specific issues?  Take, for example, the case of using a trailer to haul rental canoes.  If you use a trailer that damages another car when on a job, a personal liability policy won’t cover the repairs.  A commercial policy should do that nicely.

If someone else drives my vehicle for work purposes – for example, running a business errand, delivering goods or traveling to a meeting – are they covered?  In general, if someone else drives your vehicles for work, you’ll need a commercial policy that covers multiple drivers.

You also need of a commercial auto policy if your vehicle hauls tools or equipment that weigh more than 500 pounds.  In addition, if your vehicle makes deliveries, you’ll need a commercial policy.  Finally, if your vehicle – usually a truck – requires filings for interstate for-hire trucking business, you’ll need a commercial auto policy.

Here in America, we’re in love with our cars.  Getting your first car ranks right up there with other milestone events, like getting your first job and getting married.  There are many areas where driving is the norm and using public transportation is the exception – especially in rural areas where there may be no access to public transportation.  But there comes a time when age robs us of our ability to drive safely.  For different people, this comes at different times.  Whether you’re a senior citizen or are concerned about a family member, it helps to have some objective criteria to know when it’s time to hang up the keys.

Perhaps the most obvious place to begin is vision.  As we age, our eyes lose their ability to change focus quickly and we need better lighting to see.  Many illnesses, including cataracts and diabetes, also rob us of our vision.  Every senior who’s still driving should have an annual eye exam.  During that exam, ask the doctor if your vision is sufficient to allow you drive.  Ask not just about legal requirements, but about your own safety and that of others.  Your doctor may recommend that you limit driving at night, for example, even if you can still meet the legal requirements for your state.  If you have cataracts, consider cataract surgery – this can make a significant difference in your ability to see.

However, when you’re driving, you need to do more than just see – you need to be able to process that information to judge depth and distance.  If you have trouble judging how close you are to another car, for example, it may be time to limit your driving.

Your mental capacity is also an important consideration.  Are you able to make decisions quickly?  Are you still able to quickly assess situations?  Does your mind wander or do you have trouble concentrating?  The answers to these questions can help you decide if it’s still safe for you to drive.

Next, consider your mobility.  Do you have enough range of motion to manage the steering wheel and to turn your head to look over your shoulder when backing up?  Do your feet and legs respond quickly when it’s time to switch from the gas pedal to the brake pedal?  If your physical mobility is impaired, it may be time to give up driving.

In addition, senior citizens are often on a variety of medications.  Many of these can cause drowsiness, and driving while sleepy is just as dangerous as driving while intoxicated.  Whenever you start a new medicine, you should avoid driving until you know how that medication affects you – which typically takes about three to four days.  If you’re on a medication that causes you to be drowsy or slows your reaction time, talk to your doctor to see if there’s an alternative that doesn’t affect you.

As we age, it also sometimes becomes more difficult for us to hear, so an evaluation of your hearing should be part of your annual physical examination.  If you have trouble hearing, you could miss important warning cues while driving, such as the approach of an emergency vehicle or train or a friendly honk warning you of an oncoming car.

Each of these criteria should be evaluated individually, and then taken together as a whole.  It may be that you have only slight deficiencies in each of these categories, but when taken together, it’s no longer safe for you to drive.  If you’re having trouble being objective, ask a trusted friend or family member for their opinion.  And when in doubt, for your own safety and the safety of those you love, don’t drive.

When it comes to tips for buying a car, the one tip everyone wants is how to get the most value for his or her money.  This means evaluating the purchase terms, or “deal.”  You’ll find that car buying deals are as much a function of the car that you’re looking at as the market in which you’re shopping.

When you’re evaluating a car deal, the financial aspects aren’t the place to start.  The place to start is with what you want and need the car to do.  Few people buy a car just on a whim – you buy a car because you need or want something.  For example, maybe you need a car to get back and forth to work, or you need a car that’s bigger to accommodate your growing family.  In these situations, safety and reliability are probably your overriding concerns.  Or perhaps you need a working truck to haul supplies for your business.  In this example, cargo space may be most important.

These subjective factors can’t be underestimated.  You can make the best financial deal in the world, but if you end up with a car that doesn’t meet your needs, it won’t matter.  So reconcile your needs and wants, and then determine your budget.  Then you can begin the shopping phase of the car purchase activity.

Once you’ve found a car that meets your needs and wants, see how the sticker price compares to your budgeted spending amount.  This is where things become murky.  There’s no absolute percentage difference between the amount you have budgeted and the sticker price that will help you to determine whether or not the car might be a good deal.  The subjective factors once again come in to play.  For example, if you’ve budgeted x amount to spend on your working truck, but x + $4,000 will give you increased cargo space that will ultimately allow you to increase your business profits, is it worth it to go above your budget?  Only you can be the judge of that.  A good deal is very much a subjective evaluation and will vary from person to person.

In addition, it’s important to remember that the sticker price is just an opening negotiation position.  A copy of the Kelley Blue Book can give you helpful information on the estimated price you can expect to pay for various automobiles, both new and used.  Look at how the various options affect the price of the car and know which options matter to you.  Consider whether or not purchase incentives, such as rebates, buy-back programs, or reduced loan interest rates, are offered.  Warranties and maintenance must also be included in your consideration.

Consider the purchase price of a car independent of any trade-in you may be offering.  Negotiate with several different vendors and see what different dealerships have to offer.  If negotiation isn’t your strongest talent, take someone along with you who’s good at negotiating deals.  Just don’t lose sight of the fact that it’s your car – a good deal on the wrong car isn’t a good deal at all.

Purchasing a car and getting a good deal is like building a good lasagna, with layers of different considerations that must all come together to create a good final product.  In lasagna, some people want vegetarian and some people want Italian sausage.  Some people love ricotta, but others insist that it’s the Parmesan that really makes the difference.  It’s the same with car deals.  Figure out the various layers that mean value to you and you’ll ultimately find a car deal that you’re happy with.

The 2010 Mercury Milan Hybrid is a close cousin to the Ford Fusion.  Let’s be frank –sandwiched between the axles is an uncanny level of sameness, except for that distinctive Mercury bar grille on the front of the car to help it fit in better with its brothers in the Mercury line. Fortunately, this car has more than a little cosmetic surgery going for it.

The basic shape of the Milan hasn’t changed, but is that really so bad?  Americans have largely forsaken the coupe style cars in the last 20 years, and Ford has responded with the decision to make several cars available in the four door sedan models only.

In the front, the new Milan is more rounded, with a stand out area around the grille.  For all of this, it still flows well into the hood.  The headlights are a bit taller and narrower than in the 2009 model, and the rear is about the same as it was last year, although there are some minor changes.

Overall, the profile of the Mercury Milan hybrid is handsome and sharp.  There’s a overall sporty effect from the low roof profile that many buyers will find appealing.  This can be a bit of a headache for those in the over six foot club, but the legroom – both front and back – is substantial enough to make up for the lack in height.

The cockpit of the Milan is well planned and tight, like its first cousin, the Fusion.  In fact the interior is a lot like the Fusion, which isn’t necessarily a bad thing.  After all, if something’s working, why change it?

But then, who’s buying a hybrid for luxury and comfort?  What we really want is better fuel efficiency.  Testing in southern CA – even with the stop and go traffic that LA is famous for – the Milan gave 43 miles to the gallon.  Of course, on the west coast, you won’t need to use the heater, window defoggers, wipers or any of the auxiliary systems that drivers in other climatic regions.

For example, what happens when the conditions get to ten degrees or lower?  You know – when the windows are frosted and your breath alone is enough to fog up the glass.  Well, it’s true that the electric parts won’t kick in until the car is warm.  But once the car is warm, it stills gives an impressive 29 mph.  While that’s certainly not the best for a hybrid, it’s a respectable output for even the coldest of winters.

This makes Ford’s hybrid more than just a good effort.  It has a smooth operation – better than many of the hybrids on the market today.  Even an experienced hybrid driver will have trouble detecting the switch from a running engine to the electric mode.  When you’re cruising, there’s very little wind noise, and the road noise is just as quiet, leading to a quiet, enjoyable driving experience.

So, what’s wrong with this car?  Well the price is a bit much, coming in at $27,500 – about $1000 more than a Camry.  Since Ford has crossed the 60,000 hybrid sales mark, the federal tax credit is winding down.  But if you buy between now and October 1, 2009, you can still get $1200 back on your purchase.  After, you’ll receive only $850, and the credit will be totally gone by April 2010. But remember that the credit for other hybrids is already gone, so the Mercury Milan hybrid may be your last chance to take advantage of these savings.

A few years ago, letting a home go into foreclosure or having a vehicle repossessed was considered a major stigma.  However, as layoffs and business closures increase, more people are finding themselves forced into these previously-unimaginable situations.  If you find yourself in a position where you aren’t able to make your car payment, read on – you may have more options than you think:

Call your lender

As soon as you know you won’t be able to make your payment, give your lender a call.  I know this probably sounds like the last thing you want to do, but trust me – it will make your situation easier to deal with in the long run.  If you’ve been up-to-date on your past payments, your lender may be willing to allow you to defer payments for 30 days or more until your situation improves.  If you don’t anticipate your situation changing that quickly, your lender may be able to work with you to restructure the loan to a lower interest rate or a higher interest rate over a longer period of time – both of which will lower your monthly payments.

Sell the car

Of course, calling your lender isn’t going to make your problems go away.  If you can’t afford to make your payments, and don’t expect that situation to change any time soon, you need to try to sell the car.  Unfortunately, the number of cars on the market currently has lead to a softening in the demand for used cars, so you may find yourself in the unfortunate situation of being “under water” – owing more on the car than you can afford to sell it for.

If this is the case, you have a couple options:

Sell the car for less than it’s worth.  Sure – no one really wants to go this route.  Even if you do manage to sell your car, you’ll still have to come up with money to pay off the difference between the amount you sold the car for and the amount that’s left on the loan.  Unfortunately, if the alternative is repossession, it may be the smartest thing to do.  The upside?  Selling a car for less than market value is easier, since the market is already over-crowded with other desperate buyers trying to squeeze more value out of their cars.

Sell to a friend or family member.  Market conditions like these are the perfect opportunities for a little creative problem solving.  Say you have a car you need to get rid of and you have a friend who needs a car but can’t get a loan, and doesn’t have the money to buy a car outright.  If he can make the monthly payments on your loan, contact your lender to see if any loan transfer options exist.  If not, you can write up your own terms of sale that specifies who will pay whom and on what schedule.  Of course, it’s always best to consult a lawyer with this type of situation, should any conflict arise.

Let the car be repossessed.  Many people – frustrated with being unable to make their payments – simply throw their hands in the air and decide to stop paying altogether and let the car be repossessed.  However, even if this may be satisfying in the short-term, the black mark of repossession will stay on your credit report for as many as ten years.  Your credit score will drop significantly, which can make it harder for you to get credit when you really need it.  Furthermore, even if you do let the car be repossessed, you’ll still be required to pay the difference between the loan’s payoff amount and the amount the car brings in at auction.  Clearly, it’s in your best interest to do everything possible to avoid repossession.

Every day there is something new about the economic crisis. Right now, all the buzz is about the proposed stimulus plan. Nonetheless, the three-headed monster that is the major three US automakers will undoubtadly come back in the next few months asking Congress for more money.

The Bush administration gave Chrysler and GM a small loan to get them through the next few months and to let this Congress and the Obama administration deal with the problem in full detail. The same basic arguments will be brought up: the economy is too fragile to let the US automakers collapse, the government shouldn’t prop up a dying business, the automakers will fail eventually so any loan is throwing good money after bad, if the government will give the automakers money then the government should be able to pursue goals like fuel efficiency, etc. Here are a few of my thoughts:

1.  Given Congress is prepared to spend almost a trillion dollars on random government projects, it would make sense to continue an actual business, that is the US automakers, rather than use whatever money they would loan the US automakers on some pork project like building a bridge to nowhere. While the unions and the legacy health care costs have made the US automakers inefficient compared to say, Toyota and Honda, spending money on them is still more efficient than spending government money on something random like a bridge or giving every kindergartener a laptop. The cost of propping up the automakers is far less, in terms of efficiency and raw dollars, than the cost of replacing GDP and job lost by letting them go under.

2. Long-term, the unions need to make concessions. If the underlying business is constantly on the brink of failure because of some misguided concessions union members won 20 years ago, they need to give up those benefits in order to let the business thrive. The government can’t continue bailing out the Big Three forever. For now, that is fine. But the UAW’s control must be squashed if union members want to have any jobs at all.

3. Excessive demands on the part of Congress for hybrids and super green cars is ridiculous. If no one is going to buy them, then the government is just making the Big Three more inefficient, which means the Big Three will have to come back to the government again in the future for more money since they built a bunch of hybrids that no one wanted to buy.

The pessimist in me can’t help but think the US automakers will soon become a governmentally quasi-controlled companies. At first, this is because of their own stupidity in dealing with the unions. Then it will be because of the hybrid bubble they were forced into. Whatever the case is, it’s still better than letting them outright fail.

When gas was approaching $5 a gallon this summer, the whole world seemed to revolve around finding ways to save money on gas. Seemingly every TV commercial marketed towards society’s angst for high gas prices. Since then, the cost of oil has been cut by more than two-thirds. Prices at the pump are cheaper than they’ve been in years. It didn’t take long for the oil bubble to burst. When it did, many victims were left in its wake:

Airlines that Hedged

Some airlines, most notably Southwest, were betting big that the price of oil would continue to climb. Historically, this strategy worked out well for Southwest. A vast majority of the companies profits in the past decade have been earned by appropriately hedging against increasing fuel costs. No airline has been as aggressive about hedging against the high price of oil than Southwest, so no airline took as much of a beating when prices plummeted this fall. Their hedging strategy backfired this fall when oil prices dipped well below the prices that Southwest had “locked in” to pay. This misstep cost the company it’s streak of 17 years of being in the black for every quarter.

Car-Buyers that Locked In to Higher Prices

Auto-dealers were doing anything they could to sell cars this past summer, including offering “fixed price” deals that allowed buyers to pay $2.99 for each gallon of gas they buy no matter the actual cost of fuel. When everyone thought that oil was headed to $10 a gallon, this strategy helped auto dealers to move cars off the lot. Now the people who took this fuel “savings” in place of some generic $2,000 discount look awfully foolish.

Bubble Chasing Investors

A common investing fallacy is when people wait to spot a trend and then hop on board. In the case of energy stocks, many people waited until they reached their peak in the summer before pouring their life savings into what they perceived to be a “sure thing”. This investment strategy bankrupts uninformed investors in almost every instance where there is a bubble. Before putting their money in the stock market, these people would have been wise to learn that past performance is not a sole indicator of future direction.

Ultra Fuel Efficient Vehicles

People were doing anything they could to save money at the pump this summer, including switching out their SUVs for ultra fuel efficient vehicles like the Smart car. The Smart car, essentially not more than a moped with a frame (it has a puny 70 horsepower!) offers drivers the chance to travel about 40 miles on one gallon of gas. These were selling like hot cakes in the summer. Owners who previously thought they were making a cunning purchase now look like fools driving around in what looks like something you’d give to an eight year-old for Christmas.

Stocks rallied today, partly on news that the UAW is willing to negotiate its 2007 contract with the major car companies to help them reduce costs. This made many believe that the auto companies now have a greater chance of getting the bailout from Congress since a renegotiated deal means the auto companies may be able to reduce costs to the point of being able to turn a profit eventually (which means the government may actually get paid back on the loan).

Whether or not the auto makers get bailed out in time, I believe this crisis highlights the beginning of the end of the UAW and Big Labor in general. Anyone with half a brain who looks at the situation knows the major reason the auto makers are on the brink of failure are high labor costs, largely the legacy costs associated with past contracts with the UAW. It is estimated that for every car GM makes, consumers pay an extra $2,000 because of retiree health care costs that GM pays for its former employees, a sort of benefit unheard of for employees of foreign carmakers and manufacturing companies in general.

The UAW negotiated sweet deals for themselves in the past. To quell potential strikers, management of the auto companies gave into union demands, especially ones that would push costs off into the future (such as guaranteeing health care for retirees or making it expensive to fire workers). The Big Three didn’t eat these costs at the time; it took awhile for these added costs to kick in. As the Big Three have more retirees now and since they need to fire workers to slim down, they are now realizing these costs. The chickens have come home to roost, and they are about to bankrupt the auto makers.

While the UAW and the auto makers prefer to blame the credit crisis, an intangible third party that’s easy to vilify, one cannot help but ignore that the foreign automakers are struggling but doing ok. Like all companies, the Japanese automakers are making less money and their stocks are down, but their businesses as a whole are fine. Furthermore, even the US auto makers are doing just fine overseas. GM’s overseas operations are profitable, and they are even beating the Japanese automakers in countries like China and Russia.

The reason GM has done well in these foreign countries is because they don’t have to deal with the UAW and those contracts. They are competing with Toyota and Honda on equal terms; they are not handicapped by $2000 per car due to legacy health care costs.

The central thesis of Big Labor is that management is out to screw you, so you need to organize to retain your benefits. While employees certainly need to look out for themselves, ultimately, they need the company to thrive to stay employed. Taco Bell can’t pay its workers $50 an hour and remain in business, and car makers can’t be expected to pay for everyone in Michigan’s health care.

In today’s society, it is more important than ever to have a fluid labor force. While this is hard on workers, since they cannot necessarily to have lifetime careers at a company, it also makes it easier to find new jobs. Whether it is Monster.com, Craigslist, or an old-fashioned recruiter, it is not too terribly difficult to get a new job. Trying to negotiate a permanent job with insanely good benefits ultimately leads to no job at all.

If any of the Big Three go belly up, it’s the end of the UAW and Big Labor. When the car maker goes bankrupt, it can start from scratch, and it sure won’t make the mistake of hiring union labor next time. Even if the car companies get the bailout, I see a glim future for unions. Everyone will remember how the unions ultimately brought their employers to the brink of failure, which means everyone, including union members, would be out of a job.