You have to have full coverage insurance on a car that you’re financing. Unfortunately, depending on multiple factors, your insurance premium could make your vehicle unaffordable. But, there are tricks to saving money on auto insurance and lowering your premium.
Tips for Saving Money on Insurance
Auto insurance can be costly, and if you don’t take the time to do the research, you could be missing out on a great deal. When you’re ready to get insurance on a car, here are four tips you can follow in order to save money:
Shop around – Don’t settle on one insurance company, get at least three quotes and compare their offers before making a decision. Make sure you pay close attention to any additional charges for paying monthly.- Raise your deductible – If you have the cash set aside, you can increase your deductible which lowers your premium.
- Ask about discounts – Some insurance companies offer discounts if you opt for a low mileage offer or have group insurance. Many times, if you purchase two or more types of insurance with the same company (auto and homeowners), they may offer you a discount.
- Reconsider optional insurance – If you’re financing an older vehicle, you could skip comprehensive and/or collision coverage and save yourself some cash.
What Factors Determine the Cost of Your Auto Insurance?
There are three main factors that determine the cost of your auto insurance:
Demographic factors
- Age and gender – If you’re a young adult or teenager, you have a higher chance of being in an accident than someone who's been driving for 20 plus years. Older men statistically have better insurance rates than women, but female teenagers and young adults have better rates than young men.
- Marital status – Single drivers tend to be in more accidents than married people. So, if you’re married, your rate is typically lower.
- Location – If you live in an area that has a high population and traffic rate, such as New York City or Los Angeles, your rates are affected in order to offset the greater risks of accidents and thefts. If the area you live in has a high rate of uninsured drivers, you can expect your insurance rate to increase as well.
- Credit score – The lower your credit score, the higher your insurance premiums are likely to be.
- Profession – If you drive a lot for work, or driving is a part of your job, your insurance rate could be affected.
Car-related factors
- Vehicle’s safety rating – If the car you choose to buy has a high safety rating, your insurance could be lower.
- Vehicle size – The larger the car, the less likely it is to experience extensive damage in an accident. But, if you buy a sedan that has a larger engine size, like a V8 instead of a four-cylinder, you could see an increase in insurance costs.
- Vehicle’s age – Newer cars tend to come with higher collision costs, which hikes up the premium. The older the vehicle is, the lower the insurance cost could be.
- Theft risk – If you buy a car that’s in the top 10 most stolen vehicles, you could see a higher rate. But if your car has advanced security features, it could lower your premium. It really depends on the vehicle and the equipment it has.
Driving habits
- Driving history – The more accidents, tickets, or auto claims you’ve made in the past, the higher your insurance is likely to be.
- Driving activity – Depending on the insurance company, how you plan to use the car can affect your insurance rate. For example, if you commute to work and have to drive in and out of a major city, the insurance company could raise your premium based on the higher accident risk of driving in a city during rush hour.
The Bottom Line
Just because you can afford to buy a vehicle doesn’t mean you can afford the insurance costs that come with it. If you’re ready to finance a car and can afford to insure it, but worry you credit is in the way, let Auto Credit Express help.
We work with an extensive network of special finance dealerships across the country that are signed up with a wide range of lenders that know how to help bad credit borrowers. Get started today by filling out our online auto loan request form.
