Even consumers with damaged credit can save money on the full coverage auto insurance required for as part of a car loan

Our experience

Car buyers with problem credit that are currently financing a vehicle can, under the right circumstances, lower their car insurance costs while still maintaining the type of coverage that's necessary for an auto loan.

Here at Auto Credit Express we realize that it's important for these drivers to reduce their expenses whenever possible because we've spent the past two decades helping consumers with bad credit looking for online auto loans find those dealers that can offer them their best opportunities for auto loan approvals.

We also know that in many cases the car insurance costs these buyers are faced with can be considerably higher than average because, in some states, insurance rates can be based, in part, on the policy holder's FICO scores. But there is a type of auto insurance that, even under these conditions, could make their premiums more affordable.

Pay as you drive

For example, GMAC Insurance offers a discount to policy holders that drive lower-than-average miles in a year. Called pay as you drive (PAYD), it's a type of car insurance that, in addition to the usual factors, calculates a portion of the premium by how far a vehicle is driven. By taking into account the reduced risks that lower mileage poses, it gives car owners a discount over what they might normally pay.

"For those people who annually drive fewer than 15,000 miles, the Low-Mileage Discount can help them save money on their auto insurance throughout the year," says Wade Bontrager, senior vice president of GMAC Insurance.

OnStar subscribers

Although OnStar subscribers are eligible for a discount from GMAC Insurance that comes from an active subscription, they can also take advantage of low mileage discounts that can be as high as 54 percent (based on annual mileage of less than 2,500).

How PAYD works

So how does it work?

If you're familiar with OnStar, you'll remember that the system comes with an onboard diagnostic capability. Using this technology (and with the customer's permission), GMAC obtains a monthly odometer reading from the vehicle. With this information as a verification tool, GMAC Insurance will apply the appropriate discount (it should be noted that only distance, not locations or speed, is contained in the information).

PAYD states

The low mileage discount for OnStar subscribers, according to GMAC Insurance, is currently available in these 35 states: Alabama, Arizona, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia and Wisconsin (more ore information can be found at the OnStar web site).

The Bottom Line

PAYD auto insurance, such as the GMAC Insurance program, could certainly help drivers with credit issues that drive low miles – particularly in states where they are faced with paying auto insurance premiums that are partially based on credit scores.

Something else that's good to know: Auto Credit Express matches people that have experienced problems with their auto credit with new car dealers that can offer them their best chances for approved auto loans.

So if you're ready to reestablish your car credit, you can begin now by filling out our online auto loan application.