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High Risk Car Loan Insurance Choices

Since all higher risk car lenders require full coverage auto insurance the results of the most recent JD Power and Associates auto insurance customer satisfaction survey should help credit challenged buyers

Auto Insurance

At Auto Credit Express we’ve spent the past two decades helping car buyers with credit problems find dealers for their best chances at approved car loans. Along the way, one of the points we stress is that car shoppers need to consider not only the loan payment but also the cost of the full coverage auto insurance that’s a requirement of all high risk car loans.

This means that when putting together a budget these consumers need to know which kind of car insurance to shop for.

Partial Coverage Auto Insurance

Partial coverage car insurance is probably best known by its’ initials: “PLPD.”. PLPD stands for “public liability and property damage”. This basic insurance covers the damage your vehicle might cause if you were involved in an accident. It also typically satisfies the minimum amount of coverage required by your state. The biggest drawback to PLPD auto insurance is that it does not cover any damage to the vehicle itself.

Full Coverage Auto Insurance

In addition to the basic coverage of a PLPD policy, full coverage auto insurance adds comprehensive as well as collision protection. This type of policy not only covers the damage your vehicle would cause in an accident, but also any damage to the vehicle itself.

To make this additional protection more affordable, full coverage insurance is available with differing levels of deductibility. The “deductible” is the amount that you as the insurer contribute to the total repair bill. For example, if you were in an accident that resulted in $2000 in damage to your vehicle and you had a $500 deductible amount for collision coverage, you would contribute $500 towards the cost while the insurance company would pay the $1500 balance. In another example, if total damages are under $500, you would be responsible for paying the entire amount.

An important point to consider is that as the amount of the deductible rises, the cost of the coverage decreases. That is, the higher the deductible, the lower the insurance premium.

What you’ll need

To protect their investment, banks as well as all other lenders will always require that borrowers have full coverage auto insurance. They’ll furnish the minimum requirements and the deductible amount is typically up to buyers to decide – just be sure not to set the deductible amount so high that it becomes unaffordable to pay if an accident does occur.

Choosing the insurance company is also up to the buyer, which brings us to the rest of today’s subject: the most recent Buyer Satisfaction study from J.D. Powers and Associates.

J.D. Power Auto Insurance Customer Satisfaction Survey

“Among customers whose insurers meet or exceed all their service expectations, modest rate increases appear to be well tolerated, provided the rate adjustment amounts to less than $50,” said Bowler. He adds that, “Our research shows that most customers who shop for insurance ultimately do not switch. However, among those who are driven to shop because they are dissatisfied with the service they receive, three of four will keep shopping until they find a new insurer.”

The study considers customer satisfaction in five areas: interaction, price, policy offerings, billing and payment, and claims.

Here are their lists of insurers by region and ranked according to overall satisfaction:

As we see it

The latest Power rankings should help car buyers – even those with bad credit – find the best insurer to fit their needs in their region of the country. At the same time, it’s important to remember that insurance companies in many states are allowed to base their rates, at least in part, on FICO scores. This means that as your credit scores rise, the rates you pay should also improve.

One more thing that’s important to remember: Auto Credit Express matches applicants that have experienced auto credit issues with dealers that can offer them their best opportunities for car loan approvals.

So if you’re ready to establish your car credit, you can begin now by filling out our online car loans application.

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