Five Auto Insurance Facts for Used Cars
Important information you need to know about used car insurance
Fact 1: You could be paying for auto insurance you don't needIf you own an older used car, and you're paying for comprehensive and collision coverage, you might not need to. Keep in mind that if you still owe money on your car, your lender might require that you have it. However, if you own the car outright, do the math to determine if you actually need it.
As a general rule, consider dropping collision and comprehensive coverage if the blue book value of your car is 10 times less than the premiums you pay, or conversely, if your yearly comprehensive and collision coverage premiums are more than 10 percent of the value of your car.
The common consensus is that claims don't occur that often — usually an average of every 10 to 11 years. What's more, any payments on claims you submit probably wouldn't be much more than the cost of the premiums minus your out-of-pocket deductible.
Be sure to discuss dropping comprehensive and collision coverage with your insurance provider, before you actually do.
Fact 2: You can save money on used car insurance by regularly comparing insurance providers and ratesDue to recent changes in the insurance industry, today's rates can vary widely from provider to provider. That's why it's smart to check in with competitive carriers on a regular basis, to ensure you're getting the best price for the used auto insurance coverage you need. And don't think that by switching providers, you'll risk losing added benefits your existing insurance company provides, such as responsive customer service or low complaint ratios. There are a variety of great auto insurance companies on the market today competing for your business, with affordable rates and good customer satisfaction ratings. Do your homework, compare carriers and rates and if it makes sense, make the switch.
Fact 3: Your insurance provider can cancel your policy at any time, if you violate its guidelinesIf you violate your insurance provider's guidelines during the time in which you're a policyholder, it can cancel — or refuse to renew — your used car insurance coverage at any time.
If you're habitually late in paying your premiums, if your license is suspended or revoked during your policy period, if you submit more claims than your provider allows, or if you misrepresented information on your application, such as your driving history or prior claims history, your provider can choose to cancel your policy. If your policy is cancelled, your carrier must let you know, in writing, within a certain period of time legally required by your state.
Fact 4: There are plenty of lesser-known auto insurance discounts you could qualify forIf you qualify, there are lesser-known car insurance discounts you may be able to take advantage of. Savings for seniors, college commuters and members of professional associations are available, as are discounts for group plan policy holders, teenage drivers who have completed a driver's training course and drivers of vehicles with certain safety features installed.
With a little bit of legwork on your part, it's possible to save money on used car insurance by taking advantage of lesser-known auto insurance discounts.
Fact 5: By paying your premiums in full, you could save money on auto insuranceSome insurance companies charge a fee for processing premium payment installments. Hence, the more often you pay (every three months versus every six months, for example), the processing fees can be higher. Ask your insurance carrier if it charges processing or administrative fees and if it does, find out how much they are. If you can afford it, consider paying your premium in full to avoid the additional charges.
Get pre-approved today!