It felt like you were in control of your life when you signed the contract for your auto. You felt like you were getting a bargain when you went to buy your new car. Then, your perfect little world was ruined when you received the insurance bill. What happened?
Although people may not be aware of this fact, the bank will insist that they have full coverage for the duration of the loan. You can still get liability coverage if you don’t finance your car, but it’s a different story when banks get involved. It is possible to believe that there is a conspiracy between the banks and the insurance companies. Although it may sound like a great theory, the reality is that banks want to make sure they get their money. This is why they require full coverage insurance for a new car. Who would pay the monthly payments if the car was totaled in an accident?
But why are these rates so high, you ask?
There are many factors that go into determining the insurance rate for a new car. Rates are determined by the driver’s age, driving record, number of accidents, and even where the driver lives. Insurance companies must charge high rates in order to cover the cost of fixing a damaged auto.
Are there any ways I can lower these rates?
Although auto insurance for newer vehicles is expensive, there are ways to lower your rates. Shopping around is a great way to save money. Although all insurance companies use statistics for setting their rates, not all of them interpret the statistics in the same way. Never insure your car with the first company that you call.
You can increase the deductible that you pay in case you damage your car. In return, you will receive lower rates. Your auto insurance premiums will be lower if you have a higher deductible.
What else can you do? These rates are killing my soul!
Let’s get to the point. Slow down. Your new car shouldn’t be driven like a Nascar speed demon. Your auto insurance rates will increase if you are cited for moving violations or get tickets. Insurance companies will consider you less risk if you drive less with your new car. This could increase your resale price when you are ready to purchase a new car.
Your location can have a significant impact on your insurance rates for a new or used car. You might consider moving to a less populated area that has a lower crime rate if the rates really bother you. Purchase an alarm system for your new car and keep it in a garage at night.
Is it true?
Although there is no guarantee that your new car will have the best insurance rates, you can improve your credit score. Insurance companies look at credit scores and driving habits as a way to determine if they will offer better rates to those with higher credit ratings. However, your insurance costs for your new car will be much higher than what you paid for the liability coverage when you drove the “beater” that got to college. That’s only part of the cost you have to pay for a new car. While there are ways to lower those rates, you will need to accept the fact that you are no longer covered by “liability only” insurance.