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What Color Is Your Advertising? How Color Theory Can Make Your Marketing More Effective

If you’re planning a marketing or advertising campaign, color is sure to play a key role in the success of your venture. After all, it’s pretty much the first thing your consumers will notice*, making color your best – and sometimes only – chance to get a message across.

Use of color in most design for marketing and advertising is dictated by certain obvious requirements; the need to reflect a specific brand, as well as the attempt to communicate a certain mood dictated by the product itself.

Company branding is pretty straightforward – specific colors dictated by logos and other devices will need to be incorporated into at least part of your design. It’s the choice of color scheme for conveying the ‘personality’ of a product that’s often a lot harder to come up with.

Sometimes the decision is partly intuitive – most people understand even at a very basic level that bright, saturated colors will convey a different kind of mood to neutral grays or browns. Experienced designers, of course, go further still, selecting and implementing colors on the basis of their effectiveness in the overall design. Here, the guidelines of traditional color theory often come into play as a kind of balancing act to ensure that all parts work together well and that the right kind of colors are used.

But what if some colors are actually more right than others?

We’re about to embark on an exploration of color related not just to its use in layout, but rather, the psychological and physical impact it’s likely to have on a viewer.

A big, and sometimes controversial undertaking, and we’ll first need to get a couple of things straight. While people often talk about a psychology of color, in reality, most psychologists would find fault with the accuracy of this term. This is because the significance given to various colors isn’t universal and unchanging – in many ways it’s quite the opposite: various cultures quite often associate the same color with very different emotions and ideas.*

Yet colors and their underlying fabric of sociological and historical connotation certainly do produce specific reactions in particular contexts – emotions, associations and even physical effects that can help advertisers in their quest for ever more accurate targeting.

And if this all sounds a bit hokey, at the very least, the idea that color can actively influence consumers shouldn’t be disregarded entirely. So let’s take a look at what colors seem to be telling us.

Red

Red, the most vibrant and powerful of colors, seems like a good place to start. Particularly since studies have shown that it’s the first color babies recognize, and one that continues to appeal to most people throughout their childhood and into their adult lives.

At a purely symbolic level, it’s the color of fire and blood, an association that’s common to all cultures and therefore extremely powerful. Less specifically, it’s a color that seems to be associated with energy, war, danger and power, not to mention passion, desire, and love.

So what does that mean for marketing?

To start with, some of these associations are so deeply ingrained that it wouldn’t be wise to use a color other than red to represent certain states. Try depicting extreme emotions such as violence or passion with shades of blue and you’re going to run into problems.

What’s more, it has been shown that in its brighter variations (tomato, pillar-box), red actually provokes a physical response by raising respiration rate and blood pressure.

For this reason, its use in ’sexy’ advertising scenarios or as an erotically charged statement (on lips or fingernails) should quite literally set hearts beating faster – and unusually, it’s regarded as equally arousing by men and women.

Whether the physiological ‘red effect’ occurs simply as a result of its associations; or because the color itself somehow provokes such a response; or, if, indeed, this effect relies on a combination of the two isn’t something that necessarily matters here. What is important is that red, like virtually every other color, exerts a measurable influence on the consumer.

More about the ‘red effect’

Quite apart from any physical reactions it might provoke, red’s association with force, and therefore power, is an extremely dominant one. Consider all the small details in our everyday lives that support this notion: red icons on switches to indicate their ‘on’ state, the plastic coating on ‘live’ wires, the tiny red glow that tells us an electrical appliance is working.

All of which makes red an ideal color to suggest fast-moving action or extreme force – examples of products that might fall into this category include computer games, action-adventure books or movies.

This deep-rooted association with power, coupled with the fact that it actually raises metabolic speed, also makes red a good candidate for any product that seeks to impart the idea of improvement, rapidity or physical change. Just a few of many possible examples include anything related to sport or speed (think of those red sports cars), energy drinks, self-help guides, or batteries. Even ‘fast-acting’ or ‘powerful’ over-the-counter drugs can support their status with at least a dash of red.

Perhaps as a result of all that heavy breathing, red also increases appetite, making it an excellent choice for advertising food (it’s popularly claimed that Chinese restaurants often use red color schemes for this reason, but there’s little truth in this – red simply happens to be a very popular and ‘lucky’ color in Chinese culture).

However, if enticing diners to eat heartily is something you’re aiming to do, an all-red environment is a good way to get stomachs rumbling.

Pink

Although it derives from red, pink has little of its big brother’s forceful qualities. In fact, although it’s usually perceived as a warm and fairly upbeat color, it is, of course, popularly associated with femininity and even passivity. A cliche, perhaps, but its vigor-reducing reputation has again been shown to have some basis in fact.

Famously, a shade of bubble-gum pink used in certain cells in a men’s prison was unexpectedly found to placate aggressive inmates. Research corroborated the fact that pink did indeed have significant calming qualities – although subsequent study revealed that after a certain time these effects were dramatically reversed as prisoners became more agitated and aggressive than before. (Surprised? You try living in a bubble gum pink environment).

Nevertheless, the fact that pink does induce at least a temporary sensation of calm makes it a powerful factor in the color-coordinated approach to advertising. Its peaceful, relaxing qualities and general evocation of comfort and softness have long made it a favorite for items such as toilet paper, cotton wool and ‘gentle on the skin’ toiletries, especially baby lotions.

This association could possibly be explored further as a background or accent color for items where comfort is key, such as bedding, sofas or carpets. Apply with caution, however – the strong association with femininity means that anything ‘too’ pink is likely to be snubbed by men.

There’s one other area in which pink has an interesting effect, however – and one that’s far less likely to alienate males. It’s well known that a high concentration of color in foodstuffs will lead consumers to believe they’re tastier, or even identify a flavor that isn’t actually present.* And pink coloring is a particularly effective way of suggesting sweetness.

This may relate to the fact that it’s often used as a coloring in candies, but whatever the case, the association is powerful enough to substantially increase a food’s perceived sugariness or even depth of flavor. Pink sprinkles or toppings will add oomph to vanilla ice cream, and pink marshmallows are often assumed to be sweeter than white ones (they aren’t).

Although in these health-conscious times sweet, sugary foods have lost much of their popularity, the marketing of certain products is still likely to benefit from a little pink-appeal: feel-good desserts, ice creams, shakes and certainly artificial sweeteners. It’s also a color that could be used to make sugar-free, healthier foods seem more enticing to kids – as long as Mom and Dad are able to see through the ruse themselves.

Green

Occurring naturally as a sign of plant growth and renewal, green is one of those colors that’s universally seen as positive, fresh and fertile. It’s also a color that, once again, produces noticeable physical effects. it’s the easiest color for the eye to assimilate and therefore one of the most relaxing; it induces feelings of calm and restfulness, and can even improve vision. In short, it’s a very positive color indeed.

This emphasis on nature, freshness and renewal means that it’s commonly used to emphasize the cleansing, ‘regenerative’ aspect of household items such as bleaches, detergents, air fresheners. But if you notice a certain irony in this, well-spotted, because green, of course, has steadily evolved into the symbol of all that’s ecologically aware. Which isn’t a label that applies to most cleaning products.

The widespread acceptance of ‘green’ in its current sense is actually a fairly recent phenomenon*, but with increasing focus on ecological issues it’s extremely powerful and will only gain in strength. So much so, in fact, that real care needs to be taken now that use of green doesn’t suggest a product is all-natural, organic or additive-free if it isn’t. Congruity in advertising – or the notion that what’s implied about a product should be supported by its reality – is one of the most vital aspects of marketing. Get this wrong, and there’s no consumer forgiveness.

Yet despite green requiring caution in advertising, its current associations have equally led to opportunities for more refined targeting. Wholesome, healthy food items are likely to be quickly identified as such through predominant use of green, and the same can be said for products or services associated with any type of healing, spirituality, or personal growth: yoga, slimming programs, alternative medicines.

Different greens, different meanings

Green is a symbolically complex color, and particular shades transmit subtly different messages. Darker greens – the classic color of bank-notes and bills – have long held an association with finance. The added implication of growth and fertility therefore makes green a good choice for promotion of many financial products, particularly saving schemes, pensions and insurance plans.

Lime greens, which emerged as popular trend color in the ’90s, denote an especially vibrant freshness due to their close relationship to effervescent yellows. As such, they make excellent keynote colors for fresh, healthy, energy-inducing products such as juices, tonics, vitamin supplements and energy drinks.

Finally, a further modern-day association with green stems from its use in traffic systems to signify ‘go’. This link with movement, forward motion and vehicles make it a potentially good choice for anything related to transport: carriers, train networks, buses. And for online advertising, try using green for buttons or links you’d particularly like clicked – you’re practically inviting a user to go ahead and do so.

Blue

Blue is by far the world’s most popular color. And as one that, like green, occurs in nature – the hue of skies, water and sea – it’s not surprising that it’s so well loved. With such universal associations and widespread appeal, blue is an important asset to any color theorist.

Unlike very warm colors, which provoke impulsive, passionate responses, blue is a cerebral color that’s commonly associated with clear thinking and intellect. For good reason, too, as its use in offices and workplaces has been shown to dramatically increase productivity and a sense of well-being. Perhaps more surprisingly, other studies indicate that blue can even improve physical prowess – weight-lifters typically perform better in blue surroundings. However, this is probably a secondary effect of its ability to sharpen concentration.

This association with clear thought and precision make blue a good choice for anything involving a high degree of complex manufacture, such as computing products, electronic goods or hi-tech appliances in general. Darker blues emphasize this association even further, and their widespread appeal among men provide a perfect keynote for high-end, precision-made items with a masculine focus – expensive cars, bespoke tailoring, luxury grooming products.

Given such a setting, it’s no real surprise either that blue emerges as a clear favorite in the corporate world. Its implication of steadiness and reason continue to make it an effective choice for much company branding, although its white collar associations can also suggest stuffiness and conservatism.

In its lighter, brighter shades, blue loses much of its cool aloofness and takes on happier, sparkling and spontaneous overtones. The pure and natural aspect of such blues convey a sense of cleanliness and freshness and are often used for cleaning products, detergents, deodorants and toothpastes.

Bright blue is also an obvious choice for the typical vacation. Evocative of cloudless skies and inviting pools or seas, it also gives a tantalizing taste of tranquility and relaxation by slowing down the metabolism and producing feelings of calm and well-being. A powerful message indeed, and one that makes blue an equally effective choice for health spas, beauty clinics and any other service where deep relaxation or therapy is a key selling point.

In fact, blue is such a flexible and well-liked color that it’s almost impossible to mis-use – with one major exception.

Foods, particularly meats, dairy products and staples such as pasta or rice, really don’t benefit from any kind of association with blue. To start with, that drop in metabolism will certainly reduce the appetite; but this doesn’t explain the fact that a blue/food combo can even induce feelings of nausea. (Try it. Add a little coloring to pasta, white sauce, or even better, light-fleshed meat such as pork or chicken. See how far you get before pushing your plate to one side).

It’s been suggested that we instinctively associate the color with something that’s rotten and unsafe to eat, but whatever the case, it’s not a great choice for marketing a ready-meal. And if you find yourself running low at your next dinner party, bring out the blue plates. There won’t be many requests for second helpings.

Yellow

Yellow is clearly vibrant, energetic and fun – it’s the color of sunshine, flame and fire and is closely associated with warmth, happiness and the positive energy such states create. It produces bodily responses that are perfectly in keeping with this reading, too; an instant feeling of well-being along with a noticeable boost to mental activity.

For this reason, it’s a color that effectively communicates the nature of products associated with vitality and stimulus, such as energy drinks, sports equipment, vitamin supplements or remedies. And as the perfect feel-good color, it’s a great choice too for promoting group leisure activities, clubs and social networks.

Visually, yellow has a high impact that’s hard to ignore, a fact reflected in its use for items such as sticky notes and highlighter inks. Since it demonstrably sharpens attention, too (back to the notes and highlighter pens!) it’s worth considering lighter yellows as a background for large amounts of text, especially copy that requires close attention such as tutorials, instructions, or rules and regulations.

Yellow does requires a certain amount of care, however. Very light yellows can often appear drab, especially on-screen, while brighter shades tend to become overpowering.

The yellow effect is an intense one, and its enervating qualities can quickly put people on edge. Yellow rooms make babies cry more, and they also provoke hot tempers and arguments. And finally, while it’s a color that can be used to market most products to women – from washing up gloves to expensive scents – men are far less likely to appreciate its use with expensive or luxury goods.

White

Pristine and pure, white appropriately signifies cleanliness, spiritual health and, of course, purity in most cultures. It’s considered a non-color to which nothing has been added, making it an ideal choice for products wanting to accentuate their unadulterated, un-tampered with goodness: no-frills items, reduced fat, low-sugar or no-additive foods, pure juices, skin-care products.

White is also the classic ‘clean’ color, providing the easiest way to add a sense of uncluttered spaciousness to print or screen graphics. Yet its association with cleanliness and hygiene (white clearly shows dirt so is commonly used in hospitals, for example) lends it a certain clinical quality that can deprive a marketing message of warmth or even context. For this reason, it’s best used with an accent color to combine the best of two worlds – the visual clarity of white and the emotional resonance of a carefully chosen highlight.

Remember, too, that on-screen, the combination of light-filled white with black text is fairly hard on the eye. Try choosing a tinted background for large quantities of copy (yellow is often a good choice, as mentioned above) or change the color of the text itself.

Black

Although in western culture the color black certainly holds several negative linguistic connotations (black magic, black market) it’s also very positively associated with authority, prestige and exclusivity (black tie event, black credit card, black mercedes).

A slightly confusing message, but in general, black can be used very effectively to denote cool sophistication and a powerful sense of extreme luxury or expense.

Pair this with the fact that visually, it’s a color that creates a real sense of depth while also focusing the attention more completely than white, and black makes an ideal backdrop for images of luxury goods or services such as high-end hotels. Men seem to respond particularly well to such a combination – perhaps because it’s also been shown that for guys, black is a color with marked erotic overtones (combine it with red and you’re onto a testerone-charged winner that’s bound to attract male attention!)

Black is also by far the most common text color; perfect in print, although on-screen the contrast with white can often seem harsh. A good tip is to consider using a very dark gray instead. And colored text against a black background is rarely a good idea except in small areas, as black backgrounds diminish readability and will quickly tire viewers.

Orange

With Its combination of energetic reds and feel-good yellows, orange is a color that’s clearly suggestive of fun, warmth and pleasure. And like its constituents, orange exerts an invigorating effect by increasing oxygen to the brain and stimulating mental activity. It’s therefore an excellent choice for any product associated with energy and vigor, such as sporting equipment or services, adventure holidays, theme park rides, energy drinks.

Think you’ve read something like this before? Well in fact, orange can impart very similar messages to red, but importantly, without its slightly aggressive edge.

Of all the colors, orange is also the best at stimulating appetite. So good in fact, that you may notice a lot of it in the snack or candy shelves near a checkout. Strategic thinking, because the orange ability to generate sudden hunger pangs will often lead to impulse purchases.

Yet orange, particularly in its brighter shades, is also a color that’s perceived as lacking prestige. Perhaps this is because its high visibility means it’s a frequent factor in motel signs, fast food outlets and similar ‘low-frills’ businesses, but whatever the reasons, it’s a color that’s become associated with lower-budget options and shouldn’t be used extensively for products wanting to impart a high quality message. (The opposite also holds true, however, making it a very good choice to indicate value for money, savings and discounts).

Purple

Mysterious, alluring, and very definitely regal, purple is a relatively uncommon color in nature. In the ancient world, its scarcity meant that it was highly valued, and rare, expensive purple dyes were used exclusively by nobility.

This association with wealth and prestige remains to this day, making purple, especially in its darker shades, an excellent complement to luxury items.

In fact, the association with expense is so strong that it can even be used to add a touch of instant class to cheaper products. For example, a bus company using purple livery would almost certainly be perceived as more luxurious than one using orange. The risk here, though, is that the consumer’s perception of comparative price might also rise accordingly – even if fares are identical.

Purple secrets

Purple also has some interesting hidden talents. It’s been noted, for instance, that many women find it an extremely erotic color, making it the female equivalent of the guys’ libido-enhancing black.

In fact, purple turns out to be a very girly color indeed – far more so than pink, the usual suspect. It’s a definite hit amongst young and adolescent girls for example, with some studies claiming that almost 75% rate it their favorite color. So while men seem fairly neutral about purple, if you’re looking for a color that speaks directly to the ladies, this may well be the one to choose.

Brown

And what about the guys? Well if you tried to guess, chances are you’d get it right. Brown, along with blue, is consistently voted a favorite color by men. And why not? Solid, earthy, dependable; it might lack the zing of the brighter primaries, but it resonates with a sense of trustworthiness and dependability. And if that’s the kind of message you’re looking to add to your marketing strategy, brown is often the right color to convey it – especially of course, if the product’s aimed specifically at males.

An interesting off-shoot of all this earnestness is the fact that brown is often claimed to be a highly ‘believable’ color, too. In other words, it’s more likely to add credibility to an advertising message – an important factor if your communication makes claims that may seem extravagant.

Bear in mind though, that if used too extensively brown can also have a stodgy, dampening effect. And whatever message your marketing is ultimately trying to convey, its main purpose is to stimulate enough visual interest to attract and excite instant attention.

But even in this respect, brown turns out to be pretty dependable: it easily converts into lighter and darker shades without losing depth, and can also be mixed with more dynamic colors – reds, yellows, oranges for a much more upbeat feel. So use the color recommendations given here to spice up a brown accordingly.

Planning an ad for well-made, hard-wearing, yet sporty gear for guys? Brown combined with a hint of red should give just the right message.

FOOTNOTES

* While images are generally more noticeable than flat blocks of color, they are, of course, usually dominated by a particular color in order to enhance and support an overall layout.

* One example would be the use of white clothing to signify mourning in India and many parts of Asia. In this article I’m focusing on color in the context of western culture.

* Numerous studies have shown that higher levels of coloring in food or drinks leads to the belief that they are stronger in taste than identical items with less color. Assumptions regarding color-taste correlation can even cause errors when identifying flavor; for example, a cherry-flavored drink colored purple may well be identified as grape.

* The color green has long been a symbol of ecologically motivated political parties and movements, but it’s only in recent years that this meaning has become completely mainstream through widespread media emphasis on global warming and other ecological issues.

* Oddly enough, red in this context don’t seem to provoke a ’stop’ response and will also work well for buttons, particularly if a quick decision is required. Green, however, will always be perceived as a less risky click.

REFERENCES

Bellizzi, Joseph A., Ayn E. Crowley, and Ronald W. Hasty (1983), “The Effects of Color in Store Design,” Journal of Retailing, 59 (1)

–, and Robert E. Hite (1992), “Environmental Color, Consumer Feelings and Purchase Likelihood,” Psychology and Marketing, 9 (5)

Birren, Faber (1978), Color and Human Response, New York: Van Nostrand Reinhold.

Gorn, Gerald J., Amitava Chattopadhyay, Tracey Yi, and Darren W. Dahl (1997), “Effects of Color as an Executional Cue in Advertising: They’re in the Shade,” Management Science, 43 (10)

–, and Patricia C. Smith (1959), “A System of Color Preferences,” American Journal of Psychology, 72 (4)

Hall, Richard H., and Patrick Hanna (2004), “The Impact of Web Page Text-Background Colour Combinations on Readability, Retention Aesthetics and Behavioral Intention,” Behaviour and Information Technology, 23 (May/June)

Hevner, Kate (1935), “Experimental Studies of the Affective Value of Colors and Lines,” Journal of Applied Psychology, 19 (2)

Jacobs, Keith W., and James F. Suess (1975), “Effects of Four Psychological Primary Colors on Anxiety State,” Perceptual and Motor Skills, 41 (1)

Madden, Thomas J., Kelly Hewett, and Martin S. Roth (2000), “Managing Images in Different Cultures: A Cross-National Study of Color Meanings and Preferences,” Journal of International Marketing, 8 (4)

Meyers-Levy, Joan, and Laura A. Peracchio (1995), “Understanding the Effects of Color: How the Correspondence Between Available and Required Resources Affects Attitudes,” Journal of Consumer Research, 22 (2), 121-138.

Middlestadt, Susan E. (1990), “The Effect of Background and Ambient Color on Product Attitudes and Beliefs,” in Advances in Consumer Research, vol. 17, Rebecca Holman and Michael Solomon, eds., Provo, UT: Association for Consumer Research,

Schaie, Klaus W., and Robert Heiss (1964), Color and Personality, Berne, Switzerland: Hans Huber.

Schindler, Pamela S. (1986), “Color and Contrast in Magazine Advertising,” Psychology and Marketing, 3 (2)

Wilson, Glenn D. (1966), “Arousal Properties of Red Versus Green,” Perceptual and Motor Skills, 23 (3)

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Expat Life in Sri Lanka, Colombo

I recently visited the wonderful island of Sri Lanka, and found a country full of surprises.

Sri Lanka is situated just south of India, in the Indian Ocean. Once known as the Dominium of Ceylon and often referred to as the tea country, tea plantations abundantly thrive across the island, with spice gardens, banana and coconut palms growing randomly to create a jungle of natural resources.

People, animals and transport seem to co-exist side by side with no animosity towards each other. Dogs wonder aimlessly across or bask in the sun at the side of roads, cows and goats roam around everywhere, even on the beaches (which I found rather amusing) and people are everywhere, whether walking, cycling, using a tuc-tuc, motorbike with 5 astride, in a taxi, bus, car or truck, each takes up a space of the not too wide road. But co-exist they do, there is no anger at being stuck behind a truck, merely a short hooting of the horn to say I am here and would like to pass, politeness abounds and the expression and sounds are all of friendliness, within a country that sorely needs help at redeveloping itself since the tsunami. People are poor and yet happiness is everywhere…. Not just for the child on the hip or the person at their side, but for expats and tourists as well.

Tourists fluctuate towards the resorts and some chance the areas slightly outside of these areas, to experience a quieter less harassed holiday. Small pockets of expats can be found, dotted all over the country. When you bump into these people and chat about life on the island, there is not much to complain about. Yes, sometimes the water gets turned off or the electricity, yes the internet is not as fast as they would like it to be. Isn’t that how most people feel in developed countries anyway: The faster it gets the faster we want it. In this little piece of paradise, expats are not too concerned that it takes a little longer to do things here, the people are prepared to wait, not too hasty to move forward too quickly. There was a lot of talk and concern about the elections and safety within the country and there are still road blockades and police / army personnel with guns wandering around keeping peace if necessary. However, with 70% of the population being Buddhists, the lifestyle is peaceful and life simplistic.

From an expat perspective, I could not fault the lifestyle. As said above, yes there are definite things missing, things are slower, it takes a good 4 – 6 hours to get from Colombo to Galle and similarly to anywhere about 200km’s apart. I cannot say that the roads are particularly in good condition, but in the 10 days that I visited, I did not see one accident. Hardships could include the lack of being able to get from one part of the island to another quickly, the lack of fast internet connection, perhaps the human waste / refuse, which allows for the influx of flies, the dirt which is left to lie around and lastly the lack of funds to rebuild the country to what it was before the Tsunami.

Having said that, I have to look at all the good things that you find there, the beauty of the natural resources, how the nationals and expats are trying to rebuild the country, the beaches, game parks and mountains. This is truly a beautiful part of the world.

Expat Cost of living summary

The currency in Sri Lanka is the Sri Lankan Rupee LKR

The Exchange rate as at 15 January 2010 was $1 = 114.217 Rupees

I am going to break the Cost of living down according to some of the basket items:

Alcohol and Tobacco: Alcohol at Bar, Beer, Cigarettes, Locally Produced Spirit, Whiskey, Wine

Cigarettes (20s) – $3.14 to $9

Domestic Beer(500ml) – $2.50

Imported Beer (330ml) – $5.80

Wine at a bar – $6 a glass

Wine at a shop – $15 (750ml bottle)

Hotels tend to increase the prices of alcohol as it is the one way that they can make a profit. There are many small hotels and restaurants which create a competitive edge to where you can stay.

Clothing: Business Suits, Casual Clothing, Children’s Clothing and footwear, Coats and hats, Evening Wear, Shoe Repairs, Underwear

Casual Long Sleeved Shirt (Men) – $12

Casual Long Sleeved Trousers (Men) – $20

Shorts (Men) – $11

T-Shirt (Men) – $6

Casual Blouse (Women) – $7

Casual Skirt (Women) – $12

Children’s Jeans (Boys) – $5

Children’s Jeans (Girls) – $3.50

Children’s Shirt(Boys) – $5

Children’s Shirt(Girls) – $4

Clothes are extremely cheap, in Colombo a person can get most of the name branded clothing at fairly reasonable prices in Factory shops.

Communication: Home Telephone Rental and Call Charges, Internet Connection and service provider fees, Mobile / Cellular Phone Contract and Calls

Monthly phone rental – $4.36

Phone call rate – $0.05 for a local call

Internet line connection fee – $104 (buy all equipment with installation)

Internet service provider fee – $17 (1 geg free thereafter)

Monthly mobile contract fee – $2.18 (for the year)

Mobile / cellular call rate – 90% of phones are prepaid,

Mobile Phone 100 Minutes Call – $38

- $0.012 – $0.05 sms peak times

Due to so many of the nationals working overseas to send money home, the communication costs are extremely low and there are often special deals or no cost is involved in the actual call.

Education: Creche / Pre-School Fees, High School / College Fees, Primary School Fees, Tertiary Study Fees

Annual Creche fee – $4.36 per month

Annual Primary school fee – $260 – $436 per month

Annual High School fee – $260 – $436 per month

Annual 1st Year Tertiary / University fee – $260 to $436 per month (dependent on which

private school they go to)

Private schooling is the most expensive on the island for expat children to attend, however the rates in comparison to other countries are reasonable. Expats that I came across spoke highly of the education system in the country and were happy with the private education that their children were receiving.

Furniture and Appliances: DVD Player, Fridge Freezer, Iron, Kettle, Toaster, microwave, Light Bulbs, Television, Vacuum Cleaner, Washing Machine

DVD Player – $87

Fridge / Freezer – $489 (LG / Whirlpool – 4 year guarantee)

Iron – $12 cheap to $35 top of the range

Kettle – $20 cheap to $37 top of the range

Microwave – $191

TV 21 inch – $244 (2 year guarantee)

Washing Machine LG – $570

Discounts can be negotiated with stores on all items

Groceries bought in a grocery store: Baby Consumables, Baked Goods, Baking, Canned Foods, Cheese, Cleaning Products, Dairy, Fresh Fruits, Fresh Vegetables, Fruit Juices, Frozen, Meat, Oil & Vinegars, Pet Food, Pre-Prepared Meals, Sauces, Seafood, Snacks, Soft Drinks, Spices & Herbs

Powdered baby formula (400g) – $7

Plain biscuits (100g) – $0.20

Loaf white bread (200g) – $0.70

Cake Flour (1kg) – $2.80

Baked Beans (415g) – $1.92

Tuna (185g) – $2.75

Cheese: Cheddar (250g) – $6.63

Crisps: Pringles (139g) – $2.50

Autowash clothing powder (750g) – $1.57

Dishwash liquid (500g) – $0.87

Clothing Softener (2l) – $5.40

Breakfast Cereal (250g) – $2.45

Butter (227g) – $2.18

Milk (1l) – $1.40

Eggs (12) – $1.80

Orange Juice (1l) – $2.80

Frozen Mixed Vegetables (1kg) – $6.20

Cooking oil (1l) – $3.22

Olive oil (500ml) – $8.28

Can of cola (355ml) – $1.00

Local Fizzy Soft Drink (1l) – $1.30

Local Natural Mineral Water (5l) – $1.08

Tea Bags (200g) – $1.85

Instant Coffee (100g) – $6.75

Local Ground Coffee (200g) – $3.66

Salt (400g) – $0.26

Pepper (400g) – $0.35

Prices were obtained from local grocery stores, there are no big department stores to shop in.

Healthcare: General Practitioner Consultation rates, Hospital Private Ward Daily, Rate, Non-Prescription Medicine, Private Medical Insurance / Medical Aid Contributions

GP Private rate visit with meds – $3.50

Hospital Private ward rates – $28 per day

Dentistry – Tooth extraction – $4.35

Most expats use Bupa or the Sri Lankan Equivalent

Household: House / Flat Mortgage, House / Flat Rental, Household Electricity Consumption, Household Gas / Fuel Consumption, Household Water Consumption, Local Property Rates / Taxes / Levies

Rent 2 bed Apartment City Centre – $700

Rent 2 bed Apartment outside of City Centre – $600

Electricity, Gas, Water, Garbage per – $80 to $90 per month for an average

household, this is expensive when taking household

air conditioning into account

Gas / Fuel – 12 ½ kg bottle – $14

Local property Rates – 8 to 10% of value of property

Expats cannot buy a property directly, this has to be done via a Lawyer who owns the property. Mortgage for locals is 4/5%. This is where most expats find the costs creep in, running the air conditioners is extremely expensive as well as the cost of water.

Miscellaneous: Domestic Help, Dry Cleaning, Linen, Office Supplies, Newspapers and Magazines, Postage Stamps

Domestic Rates – full time per person – $80 average

1 Black inkjet printer cartridge – $14

1 Color inkjet printer cartridge – $21

500 sheets printer paper – $5.23

Local Daily Newspaper – $0.17

International Daily Newspaper – $0.45

International Magazine – $20

International Airmail Stamps – $0.22

Domestic Stamps – $0.12

Domestic help is cheap and most employees either live on the property or close by. Office supplies are reasonable, with CD’s and DVD’s freely available on the street where most locals buy them.

Personal Care: Cosmetics, Haircare, Moisturiser / Sun Block, Nappies, Pain Relief Tablets, Toilet Paper, Toothpaste, Soap / Shampoo / Conditioner

Body lotion (400ml) Vaseline Intensive car – $4.53

Toilet paper 1 ply per roll – $0.50

Toothpaste (200g) – $1.92

Shampoo (200ml) – $2.40

Some of the items that can be purchased can be expensive, like creams, sunblocks and cosmetic creams. Name brand products are the most expensive.

Recreation and Culture: Books, Camera Film, Cinema Ticket, DVD and CD’s, Sports goods, Theatre Ticket

Books paper back – $10

Cinema ticket – $0.50

DVD / CD Imported – $2

Cricket ticket – $0.50 to $8

Theatre Ticket – only in Colombo – $30

Hard cover books are expensive in the country, but paper back books are of a similar cost to the US and UK. Cinema tickets are cheap due to the availability of cheap DVD replicas which can be bought on street corners. International cricket tickets are also kept cheap for the local population.

Restaurants / Meals out / Hotels: Business Dinner, Dinner at Restaurant (non fast food), Hotel Rates, Take Away Drinks & Snacks (fast Food)

Business Dinner excl Alcohol – $22 per person

Dinner / lunch at local restaurant – $8 per person

McDonalds Big Mac – $4.10

Hotel Rates 3* – $8 to $50 pppn

Hotel Rates 4* – $80 to $120 pppn

Hotel Rates 5* – $140 pppn upwards

Take away – Can of cola x 1 – $0.70

Medium pizza – $3.50

Hamburger – $2.00

Coffee – pot x 3 cups – $1.40

As in most countries how much you pay for a meal is dependent on where you go, the local restaurants have great local meals, as well as international flavours, we found a fabulous vegetarian restaurant in Galle, well worth a visit and all prices were fairly cheap. Some restaurants do take advantage of the tourist population and serve sub standard meals. However, most restaurants were good with their portions and meal plans.

Transport: Hire Purchase / Lease of Vehicle, Petrol / Diesel, Public Transport, Service Maintenance, Tyres, Vehicle Insurance, Vehicle Purchase

Hire / Lease car – Sedan Toyota Corolla – $37.14 per day for 1 week

Hire / Lease car – Toyota RAV4 – $46.71 per day for 1 week

Petrol unleaded per litre – $1.23

Diesel per litre – $0.64

Bus Ticket (one way) – $1.00

Taxi Ride – per km – $0.50

Tuc Tuc – 10 km ride – $6.00

Train Ticket 2nd class – $1.57

If you are visiting I would suggest you use the local taxis and tuc-tucs, driving can be a head-ache and unpleasant experience if you are not used to the local norms. However, speeds do not go over 80km on the bigger roads and overall a safe place to drive.

The above detail are some of the items form the basis of the cost of living indexes for each basket group in the Xpatulator calculators, these costs are then used with their indexes and exchange rates to calculate the cost of living in different locations.

For more information on Sri Lanka read more at www.xpatulator.com/outside.cfm.

Loan Customer Annuity Cash

Tire Insurance: Myths and Facts About Road Hazard Policies

Insurance–it’s everywhere. One can insure just about anything. Are tires an investment one needs to insure? Tire insurance, also called a road hazard policy, road hazard warranty, or tire reimbursement plan, is a rapidly growing industry in the automotive world.

Tire warranty plans pay in full or in part for the replacement or repair of damaged tires and/or rims from “road hazards.” Road hazards are defined as pot holes, debris, nails, wood, and other hazards found in the road. Curbs, sidewalks, and stone walls are not road hazards. This is an important distinction to consider when deciding if tire insurance is right for you (discussed further ahead).

Tire plans last for a specific period of time and tire wear tread-depth. Some plans last 2-3 years. Others can last 5 years or 60,000 miles. Several plans come with fixed amounts of coverage: $500 per year up to 4 years. Many contracts require three years of law school to comprehend. In terms of tread depth, a tire is usually considered worn out (and thus the plan null and void) at 2/32 to 3/32 of an inch.

Another important distinction is in the type of plan.

Tire reimbursement plans are just what they say. You, the plan holder, will be reimbursed after the claims process is finalized–usually 2-8 weeks. There is an out-of-pocket expense. These plans are often sold by new car dealerships. The prices can range from $300 to $600 dollars.

Road hazard policies operate similarly to reimbursement plans. However, some tire insurance providers, in partnership with the repair facility, may have a direct-pay relationship. Thus, there would be no out-of-pocket expense, except for applicable deductibles, and items not covered in part or in full. These plans are primarily sold by tire dealers and repair shops. The prices range from $10 to $30 per tire. They also can be based on a percentage of the cost of the tire: usually 12% to 15%.

Both types of plans have a number of variables, requiring a magnifying glass to read the fine print. Also, many are pro-rated warranties, covering only a percentage of the cost of the tire based on its wear.

Claims and Coverage

Depending on the plan, claims are initiated by the repair shop. The process is fairly smooth, although there can be a significant delay from the provider for authorization. This delay may be an hour or an entire weekend. This means that you’ll have to “ok” the tire replacement, and then hope it’s authorized for the full amount, or drive on your spare.

Some plans offer national coverage either among their service facilities or from other repair centers. Claims procedures will vary. Others only provide local coverage, or coverage at the selling facility.

Limitations

Tire insurance does not mean that everything is covered. Pro-rated warranties are based on the wear and tear of the tire. You may get 75%, 50%, or only 10% coverage depending on the tread-depth. You’ll pay the remainder. While there are plans that offer full coverage, even these have limitations, or they may conflict with a repair shop’s policies.

For example, many plans allow for a maximum of $30 to mount and balance one tire, and a maximum of $15 to repair a tire. However, sport tires often have significantly higher mounting and balancing fees–upwards of $50 per tire–and tire repair prices can exceed $90. There are also discrepancies on the tire and rim prices themselves, which in the end, may have to be supplemented by the service customer.

Although there usually is not an issue with the latter given the competitive market, the service center’s price mark up may be unacceptable to the plan provider. In this case, the service center needs to lower the price or you, the service customer, need to pay the difference–or go somewhere else. This does happen!

Rim Replacement and Repair

Rim replacement is becoming less frequent. With the high cost of aluminum wheels and sport wheel packages, tire insurers have opted to have them repaired. Repair will only be done if the rim does not hold air. What this means is that even if the rim is warped–enough to cause a vibration and even premature tire wear–they won’t replace it. Rather, they will send it out to be straightened and repaired.

Rims are replaced only if the damage is so extensive that the new tire, when mounted on the rim, won’t hold air. However, even in this case, especially if it’s an expensive sport wheel, they may still attempt to repair it.

Repairing rims is a bad option. While some rim repair is acceptable, badly warped or damaged rims will in no way ever be the same.

Alignments

If a car hits a road hazard hard enough, such as a pot hole, it’s wise to have the alignment checked. Road hazard policies and tire reimbursement plans do not cover alignments. The service customer will have to pay for this procedure.

Road Hazard Protection Positives

Some plans include tire rotations, wheel balancing, and nationwide coverage.

Myths

Can I pop all 4 tires and get a new set of tires?

You can try. But this type of claim will trigger a number of red flags with the insurer. The policy holder will likely send out adjusters and/or require photographs. You will also have a difficult time explaining how a “road hazard” caused all 4 tire pop.

New tires come with a warranty.

New tires do come with a warranty by the tire manufacturer (Michelin, Yokohama, Goodyear…etc), but not a road hazard warranty. The warranty by the tire manufacturer only covers defects in workmanship. New tire warranties do not cover punctures or damages from external sources. This is why “road hazard” protection is being pushed.

New tires are rarely defective. If there is a problem, it’s usually noticed when balancing the tire. Or, there is a drivability concern such as vibration or noise. If there’s a defect it’s generally caught right away, and the tire swapped out.

It’s so cheap; it’s a no-brainer, right?

Actually, the experts don’t agree with this statement.

The Economics of Tire Warranties

An article from the Washington Post by Terence O’Hara explains the economics of extended warranties and purchase protection plans in general. It is quite fitting for road hazard warranties. He writes:

The decision to buy an extended warranty…defies the recommendations of economists, consumer advocates and product quality experts, who all warn that the plans rarely benefit consumers and are nearly always a waste of money.

‘[Extended warranties or purchase protection plans] make no rational sense,’ Harvard economist David Cutler said. ‘The implied probability [of having an issue with the product] has to be substantially greater than the risk that you can’t afford to fix it or replace it. If you’re buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances.’

In short, road hazard warranties are a waste of money. Don’t insure that which you can afford to replace.

Numbers Game and Slim Chances

Like all insurance, tire insurance plans are a numbers game. However, this is a game you have a 98% chance of losing. Insider statistics show that the percentage of claims paid out by providers is as low a 2%.

Curbs

Another interesting note is that a lot of tire damage is caused by curbs. Curb damage is not covered under most road hazard policies. High granite curbs with sharp edges slice through tens of thousands of tires per year.

You Won’t Notice

Many people don’t even notice tire damage. Other than to see if the tires are holding air, who “really” looks at tires? Tires are subject to a whole host of external influences which cause bubbles, slices and gouges. Despite the potential dangers of damaged tires, the damage very often does not translate into any noticeable drivability issue. The point is that if you don’t notice any tire damage you can’t benefit from the coverage.

Research Shows

Those raving about the benefits of a road hazard policy are the actual folks in the industry who stand to benefit from the sale. They’ll argue that it’s so cheap–only $10 to $20 per tire. Even so, for four tires, that’s $80 based on the “possibility,” the “chance,” of damaging a tire that meets the repair/replacement requirement protocols.

Auto Insurance

If a rim and tire has incurred significant damage, it’s quite likely that other problems have resulted as well. The first is that the vehicle may have been jarred out of alignment. Secondly, hub bearings, front end components: tie rods, spindles, ball joints, and a variety of other components may have sustained damage. In this case, auto insurance, which you are already paying for, will pay for everything–brand new.

Free Road Hazard Warranties

Many tires come with road hazard warranties FREE. In other words, in an effort to secure retailers, many tire distributors provide service centers FREE road hazard insurance. Some shops pass this on to their tire customers, others sell them. Ask if the tire “comes” with a road hazard protection policy. If not, request that one be provided at no additional charge. It’s worth a shot.

Also, some car manufacturers provide road hazard warranties FREE of charge for 12 months or 12,000 miles. If you’re buying a new car or even used, ask that the dealer provide a complimentary road hazard policy (after all the wheeling and dealing is done, of course), and just before you commit.

What’s the best road hazard policy?

Money in your bank account.

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