A recent report from insuranceQuotes.com shows how even credit-challenged consumers can save money on their car insurance premiums.
Car Insurance and Bad Credit
Unfortunately, consumers with less than perfect credit often pay more for car insurance simply because their FICO scores are low. That's because, in states that allow this practice, insurance companies can charge more for the same coverage because it's been shown that drivers with poor credit scores file more claims with their insurers.
But even though there are other ways even credit-challenged drivers can save money on car insurance, very few car owners take advantage of a number of common discounts – at least according to a new report from insuranceQuotes.com.
The first step to saving is to ask your provider for any common car insurance discounts, but according to the report, only 16 percent of Americans even ask for them.
Here are some additional findings from the study:
- Someone who drives 5,000 miles annually pays an average of 8% less than someone who drives 15,000 miles each year. The average savings is highest in California (25%), followed by Washington, D.C. and Alaska (both 11%). The only state that doesn't reward drivers for logging fewer miles is North Carolina.
- Insurance companies also charge less to married people, but only 13% of Americans have let their insurance carrier know that they tied the knot. The savings is greatest for young adults (a married 20-year-old pays 21% less than a single 20-year-old). The gap narrows to 7% at age 25 and around 2% after age 30.
- Certain occupations (e.g., teachers, nurses and accountants) are viewed as safer drivers and qualify for discounts from many insurance companies. But again, few Americans are asking for this discount (just 8% have done so).
- All of the 10 largest car insurers give good student discounts, yet just 21% of millennials and 20% of the overall population have asked for one of these. The percentages are similar for defensive driving courses.
Laura Adams, insuranceQuotes.com's senior analyst had this to say about the results, "These discounts can add up to hundreds of dollars per year, and in many cases, they reward people for things they were already doing. I encourage everyone to be proactive and seek potential discounts at least once a year; it should only take a few minutes."
The Bottom Line
Even drivers with credit issues should ask their car insurance provider about low mileage, marriage, occupational, good student, and defensive driver discounts. Although they must be self-reported (by the driver), taking advantage of even a few of them could save the policyholder a substantial amount of money – but only if they inform the insurance company.
One more tip: Auto Credit Express matches people that have experience problems with their credit with those new car dealers that can offer them their best opportunities for auto loan approvals.
So, if you're ready to reestablish your credit, you can begin now by filling out our online auto loan application.