Raising the deductible amount on their auto insurance policies certainly can save drivers money on their monthly premiums. But those consumers with little wiggle room in their monthly budgets would do well to think twice before making a move.
In most cases, gap insurance can save borrowers a lot of grief – and money – when the finance term is over 48 months and when the down payment is less than 20 percent. Smart borrowers – especially those with credit issues on tight budgets – then need to decide if they want to purchase it through a dealer or their auto insurance company.
Since insurance can be particularly expensive for credit-challenged borrowers, these consumers need to carefully weigh whether or not they should file a claim with their car insurance carrier – especially if the damage is only a few hundred dollars above the deductible amount.
If you have problem credit, it’s important to realize that taking out a subprime auto loan (or any auto loan, for that matter) will require that you buy full coverage auto insurance. And while it’s important that you get the right deductibles for both collision and comprehensive coverage, it’s also necessary that you have enough liability coverage, as well.
Taking out a minimum car insurance policy could probably save you money in the short term. But at the same time, this type of policy won’t satisfy the requirements of a lender if your vehicle is being financed and, even if your vehicle is paid off, if you have any assets such as a home, taking out this type of policy could end up costing you your current assets plus any in the future, as well.
Although the service area is currently very limited, we see the program offered by Metromile, which includes its “pay as you drive” billing model, to be of real value to drivers – even those with less than perfect credit.
Per-mile car insurance certainly has the potential to help low-mileage drivers – even those with low credit scores – as the additional costs associated with a driver’s poor credit can be at least partially offset in a Metromile policy by those driving fewer than 10,000 miles per year.