Even if your driving record is clean, you may be paying more for car insurance than an individual who has a ticket or two. Why? Because insurance providers look at your credit as part of the approval and rate-setting process.
Why Do Insurance Providers Care About My Credit?
Fair or not, insurance providers evaluate your credit score and use it when determining whether or not to extend coverage and to set your premium. This is because insurance companies view bad credit as a legitimate risk factor.
Unfortunately for many responsible motorists with less than perfect credit and according to the insurance industry, their statistics show that a driver with bad credit is more likely to file an insurance claim than one who has a good score. As a result, these consumers are either denied coverage or are given a higher rate.
So, what can you do to save money on car insurance?
Tips to Help You Save on Car Insurance
If you need an auto loan but have less than perfect credit, don't just assume you will pay more for car insurance. There are measures you can take to get the best rate possible.
- Your Car Choice
If your car is financed, you are going to be required to get full coverage. But if you choose an inexpensive used vehicle, you can pay off the loan faster. Then you are free to choose the coverage that you want. Also, less expensive vehicles typically cost less to insure, so you should consider a compact or mid-size car if you have damaged credit.
- Shop Around For the Best Quote
There are three basic types of insurers: Companies who sell directly to you, those that work through exclusive agents and independent reps who sell policies from any of the companies they represent. Your best bet is to do a little comparison shopping and get quotes from at least one provider in each category.
- The Discounts You Didn't Know About
Your insurance provider most likely offers some sort of discount that you qualify for that will save you money. Here are just a few scenarios where you may qualify for savings: if you drive less than you used to, if your credit is better than it was when you got the coverage, if you are recently married, if you have taken a defensive driving course, if you bundle two or more types of policies with the same provider, if your car if equipped with some of the latest safety features (like forward collision warning), and more. Be proactive and see if you qualify for any of these by asking your provider about discounts at least once a year.
Where to Turn When You Need an Auto Loan
Saving on car insurance is only an issue you have to deal with after getting approved for an auto loan. Save yourself the time and hassle of looking for a lender who will approve you by teaming up with Drivers Lane. We specialize in helping people with bad credit find dealers who work with lenders that are willing to finance them, sometimes for little or no money down.
If you want to get the vehicle that you need, start by filling out our free and secure online application.