So it’s finally time to replace your 1986 “classic” car with another. Maybe it’s time to upgrade to the current year? Actually, due to the state of the economy, it might make more sense to just aim for a car from the last decade. A used car might be the way to go; you know, nothing fancy, but reliable! Whether you’re purchasing a used car, or have been in a committed relationship with one for a while and looking for better coverage, in this article, you’ll learn the Dos and Don’ts of shopping for an auto insurance policy for your used car.
Perhaps you’re on a high after buying a new-to-you sports car, but nothing forces the dream off the road faster than a high insurance bill. Consult with your agent before buying a used car to see how your auto insurance will be affected.
An auto policy is a package of different coverages. Each coverage has a premium associated with it. Before you start eliminating coverage to seemingly save money, ask your agent to explain your policy. Some companies offer a better rate if you have more coverage.
If you have to take out a loan to buy the car, then yes, you need both comprehensive and collision coverage in addition to your state-mandated liability coverage. Sometimes the lender will specify the deductibles that you need to have on your policy. In the case of leased vehicles, the agreements specify the liability limits as well.
Your credit score does count when obtaining both car and home insurance. Typically, the better your credit, the better your rate. When your credit score is a part of a company’s rate calculation, it can’t be the total determining factor, but it is a significant part of it.
Even if your driving record is less than perfect, you can get a credit for being a homeowner with a larger number of insurance companies. Some companies offer a stability credit if you have lived in one place for over a year, even if you are renter.
Some companies offer you an option to completely replace your car if it is totaled due to an accident, theft, or any other covered loss. It is a coverage written for later model cars. If you are purchasing a late model vehicle, ask your agent if it is available.
If you are buying a 20-year-old car for $600, don’t worry about it. But if you are spending seven- to ten-thousand dollars for your main transportation and are paying cash, can you afford to replace the car if it gets stolen or damaged? Even if you don’t have a loan on the car, full coverage is good idea. It’s coverage to repair or replace the car in the event of a “covered incident”.
Use a service like AAA instead if you need a “jump” or a tow. If you access the towing and labor coverage on your policy, it counts as a claim! If you use it three times or more, those show up as 3+ claims, which harms you when it comes your policy renewal or future insurance shopping.
This coverage pays for a rental car if your car is damaged due to an auto accident. That is the only time you can access this coverage. To purchase it, you will either need to have full coverage on your car (comprehensive and collision), or just comprehensive; it all depends on the company.
Do you have a college degree? Do you own your own home? Did you take an accident prevention course? All of these and more are scenarios can act as potential credits that can provide further coverage and/or cheaper rates on your auto insurance policy.
The downside of buying a used car might be a high insurance bill. To avoid that, work with your independent agent to make sure you are getting all of the credits available to you, and that you’re driving away with the right coverage. It’s always a good idea to consult an independent insurance professional who knows the ins and outs of auto insurance. Let us help you make buying that used car a good experience all around.
More expert advice about Home, Auto, and Theft Insurance
Photo Credits: Happy face © pixelthing - Flickr.com; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com