A lot of things influence how much you pay for car insurance. Factors involved include: your age, your driving record, your marital status, the type of vehicle being insured, and where you live. But did you know that your credit score can play a role too?
Your Credit and Car Insurance
Most people aren't aware that auto insurance providers also factor a consumer's credit score into the rates they offer. Why?
Studies have found that drivers with poor credit scores are more likely to file a claim than those with good ratings. Because of findings like this, auto insurance providers (in states that allow it) now factor in credit scores to their consumer-scoring models.
As a result, consumers with bad credit can generally expect to pay higher auto insurance premiums than those with prime credit.
Why This Matters
At Drivers Lane, we help match consumers with poor credit to a car dealer in their area that offers them their best shot at an auto loan approval. And when you buy a vehicle using an auto loan, the lender will require that you have full coverage car insurance for the entire length of the loan. This is because lenders want to recoup as much as possible from the value of the vehicle in the event it is declared a "total loss."
Full coverage auto insurance includes comprehensive coverage, which covers incidents that have nothing to do with an accident (theft, vandalism, fire, weather, etc.), and collision coverage, which protects you in the event of an accident.
If you currently don't have full coverage car insurance, then you can expect to pay a higher premium after changing your policy.
Tips to Save Money on Auto Insurance
Nobody likes devoting mental energy to a subject as dull as the particulars of an auto insurance policy. But if we told you that hundreds of dollars in savings are possible, you would probably be more likely to pay attention, wouldn't you?
The fact is, it is really easy to reduce the amount you are paying for car insurance and it doesn't require all that much effort. Try these tips:
- Shop Around
This may be your first time needing car insurance, or you could have a provider that you really enjoy. But if you shop around and compare some rates, you will soon realize that prices can vary drastically between providers.
- Know What You Are Paying For
It is entirely possible that you are paying for a service or item that is optional, such as a roadside assistance service. Call up your provider and ask if you're paying for any of these and remove them from your policy if you don't think they are necessary.
- Ask About Discounts!
You are probably missing out on some sort of discount that your insurance provider offers. They offer a lot of them, and all you need to do is ask. Examples include: renewal discounts, low-mileage discounts, defensive-driving discounts, bundling discounts, and many more.
- Raise Your Deductible
Raising the amount of your deductible will lower the cost of your collision and comprehensive coverage premiums. While that may mean you have to shell out more in the event a repair is needed, it could end up saving you in the long run.
- Consult Your Provider on Car Choices
If you have your next vehicle narrowed down to a few choices, why not check with your provider to see how much it would cost to insure each. Also, cars with better safety features could unlock discounts, so make sure to inquire about this. Even if you have to pay extra for an optional safety feature, it may be that the discount will save you more over the course of the loan than what the feature costs.
Also keep in mind that insurance is not just about the cost. If you are thinking about switching providers to save money, make sure that the company is reputable and trustworthy. Oftentimes, you are better off paying a little extra for a provider with impeccable ratings and customer service.
Even if you have damaged credit, Drivers Lane can help you find financing for your next car. We even have dealers that have been able to get customers approved with little or no money down.
You don't have to let your credit problems hold you back from getting the car you need. Get the process started by completing our secure and obligation-free auto loan application today.