Saving on Car Insurance with Poor Credit

In at least four states credit challenged drivers can save hundreds of dollars a year on the full coverage insurance required by lenders

Auto Insurance & People With Bad Credit

Saving on Car Insurance with Poor Credit

Here at Auto Credit Express we realize that borrowers with bad credit often work with budgets that are particularly sensitive to the premium costs their credit places on full coverage auto insurance required until the vehicle is paid off.

In some cases we’ve found that buyers can’t afford the monthly payment on the best vehicle they qualify for because adding in their car insurance premium would put the overall payment well above their car budget. In many states this problem is compounded by the reality that, in addition to other factors, insurance premiums can be partially based on the insured’s FICO scores.

But even under these circumstances there is a form of full coverage auto insurance that in many instances can make the monthly premiums for some drivers with poor credit easier on the wallet.

Per-mile Auto Insurance

We were reminded of this earlier this week after reading an announcement that “pay as you drive” insurer Metromile would be launching its program in California – offering motorists there a way to save on their car insurance premiums and much more.

“At Metromile, we are reinventing the car ownership experience to be smarter and more responsive to the needs of urban drivers,” said Metromile CEO Dan Preston. “By unlocking the data in your car, we empower you to make smart decisions about how much you drive, how to keep your car in safe running condition, and even how to avoid street sweeping tickets. As a result, our customers are able to control many of the costs of owning a car, like insurance, fuel, tickets, and maintenance, much more effectively.”

Unlike some pay-as-you-drive insurers like Progressive’s Snapshot, Metromile doesn’t collect driving behavior information (such as how hard you brake) to calculate costs – only the number of miles driven. It also states that it offers “significant” savings to consumers who drive less than 10,000 miles per year.

Metromile policies start with a monthly base rate that provides for full coverage when the vehicle isn’t in use. The total monthly bill is then calculated by adding a per-mile rate to the number of miles driven during the month. Unfortunately for most drivers, California represents just the fourth state Metromile does business in (the others are Oregon, Washington and Illinois).

The Bottom Line

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.

Something else with an upside potential: Auto Credit Express helps consumers with car credit issues find the right dealers for their best chances at approved auto loans.

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

Posted on July 25, 2014 by in Car Insurance
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