Consumer Car Buying Advice Blog

The current economy has the budgets of many bad credit car loan shoppers stretched to the limit but these tips could save your budget and save you money on your car insurance rates.

Remember the cost of insurance

At Auto Credit Express we’ve spent close to 20 years working with credit-challenged applicants and helping these same consumers raise their credit scores and reestablish their car credit by financing a vehicle with a bad credit car loan. Along the way, we try to provide our applicants with the information needed in order to make educated decisions that will ensure they have a better chance of success.

One of the things we try and stress throughout the entire process is to keep the loan term as short as possible and the total monthly budget as affordable as possible. This means bad credit car loan applicants should consider a mid-size or compact car instead of that SUV to keep their payments low and the loan term as short as possible in order to save on finance costs.

Picking out an affordable vehicle not only saves on finance costs, it can also be more affordable to insure. So with that in mind, here are some money-saving insurance tips to follow before making that final car-buying decision.

8 Tips for saving on car insurance

1. Shop around

There are basically three types of auto insurers. Companies that use direct writers (such as Geico and Progressive) have employees who will sell directly to you. Other companies such, as Allstate and State Farm, work through exclusive agents who will sell only their policies. Finally, independent agents are able to sell policies from those companies they are signed up with.

Although direct insurers are usually the most affordable, because of this they can also be choosey about who they insure. Your best bet, then, is to get quotes from at least one insurer in each category. You can also go online and receive quotes directly from insurers or go to one of the many web sites that will comparison shop for you.

2. Combine your policies

In many cases, buying your homeowners insurance and auto insurance from the same provider will qualify you for an additional discount. But it’s always a good idea to check this out first. If you’re thinking of combining your policies, shop both around to make sure you’re getting the best deal on the combined rate.

3. Pull your credit report first

Bad credit car loan buyers should always pull their credit report a few months before shopping for a car. By doing this, you can correct any mistakes in your credit report and raise your FICO score before visiting the dealer.

Many auto insurance companies also look at your credit report, since it’s been proven that drivers with high credit scores tend to file fewer insurance claims. By improving your credit score before you get that new car, bad credit car loan consumers could also be saving themselves money on their auto insurance.

4. Professional associations

Many auto insurers give discounts to associations such as AARP, university alumni, and military groups.

5. Student discounts

A number of insurers will discount your policy if your teenage driver is a good student or has taken a defensive driving course. If your children are away at college and at least 100 miles away, there is also a discount for that. You should also keep in mind that if you have a child that is sixteen or over and doesn’t have a driver license, you are not required to insure that person.

6. Choose the right car

Bad credit car loan shoppers should realize that now is not the time to finance their dream car. But in addition to lowering your monthly payment and reducing interest charges, a small to mid-size sedan can also save on insurance costs.

One additional tip: if you’re looking at two different vehicles and can’t decide on which one to buy, check with your insurance agent before making that final decision – you could save yourself hundreds of dollars a year simply by choosing the model that is less likely to be stolen.

7. Low mileage discounts

Some insurers also offer discounts if you drive below certain mileage thresholds each year.

8. Electronic payment and paperless discounts

You can save money with some insurance companies by having your monthly payment electronically transferred from your savings account, checking account or credit card account. Some insurers will also offer you savings if you receive your monthly bill electronically.

As we see it

There is the smart way and there are other ways of approaching a bad credit car loan. By choosing an affordable car and taking advantage of as many auto insurance discounts as possible, you will give yourself a better chance of coming through the auto credit reestablishment process successfully.

For nearly 20 years, Auto Credit Express has been helping people with credit problems get approved for new and used car loans. Our dealer affiliates work with a broad spectrum of bad credit auto loan lenders to get you approved. Since our inception, we have processed over 2,000,000 online bad credit auto loans and our dealers have closed over 1 billion dollars in auto loans.

For more information, please visit www.autocreditexpress.com to see what we can do for you.

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