How COVID-19 is Affecting Auto Loans
COVID-19 is having a massive impact on the global economy and very few industries have been untouched by it. If your business relies on employees working in a physical space and profits only when people are willing to shop and spend, thereâs no escaping it.Â
Itâs no surprise, therefore, that the auto industry has been so negatively affected. In a recent guide, we looked at the many auto loan relief options that manufacturers offering in light of the coronavirus. In this guide, weâll highlight the ways this industry has been stung by the pandemic and look at what it means for the future of the US automobile and car financing sectors.
How is the Coronavirus Affecting Car Sales?
The automobile manufacturing industry experienced a minor surge at the beginning of 2020 but COVID-19 began to impact sales heavily in March. Many companies, Fiat Chrysler and General Motors included, began the year with strong momentum behind them, but March hit them hard and negated all the gains made during the first two months.
Both of these companies recorded losses for the first quarter of 2020, with Fiat Chrysler losing 10% in total.
Toyota, one of Americaâs biggest manufacturers, also recorded massive losses for March, with daily sales dropping by nearly a third during this month.
All of this is to be expected. The US has yet to announce the sort of national lockdowns we have seen in countries like the United Kingdom, Italy, Spain, and Greece, but many citizens are in self-isolation, countless businesses have shut their doors, and there are fewer cars on the road as a result.
Combine this with the fact that people are losing their jobs and worrying about their futures, and itâs easy to see why car sales have been affected so severely.Â
What are Manufacturers Doing About It?
Automobile manufacturers have moved quickly to stem the rising tide of financial devastation caused by COVID-19. Fiat Chrysler, for instance, is offering improved auto loan conditions to convince consumers to make sizeable purchases and keep the wheels turning. It has also made it easier to purchase a car for those in self-isolation or lockdown.
You can now buy a Fiat Chrysler online, with options for trade-ins, auto loans, and pretty much everything else you would get when buying in person.
Theyâre making it easier for you to buy because they need you to make that commitment. At the same time, the production of many new vehicles has been halted.
While some plants and showrooms are still open in the United States, Europe has experienced an almost continent-wide shutdown, leading to a decreased demand.Â
Manufacturers are also anticipating that things will get worse, as many experts predict that the USA will experience a spread similar to that of Spain and Italy.
How Has COVID-19 Hurt the Automobile Industry?
We have already touched upon some of the ways that COVID-19 has impacted the automobile industry, but the problem goes far beyond people not being able to make it to their local showrooms. Furthermore, if events in Europe are anything to go by, the problems will only get worse and it could be several years before the automobile sector recovers.
Here are a few reasons the industry has been hit hard:
Uncertainty
There is a genuine fear that the COVID-19 pandemic will remain for all of 2020 and even beyond that. It seems unlikely that it will last for that long, but if the country doesnât go into lockdown and a vaccine isnât produced, itâs possible.Â
With this in mind, many consumers are putting off buying new cars out of fear that they simply wonât need them. New cars depreciate rapidly and can lose 20% in the first year. Whatâs the point of spending $30,000 on a new car if it will be worth $24,000 by the time you actually get behind the wheel?
Struggling Stock Markets
The stock market doesnât just impact big companies and investors. It also affects average American families who have their money tied into savings accounts, stocks, and pensions. Savers have lost a lot of money and are worried that theyâll lose even more in the near future, making buying a $30,000+ vehicle incredibly reckless.Â
Price of Gas
One of the few things that the automobile industry has on its side is the price of fuel, which has plummeted in the past few weeks. The problem is, no one cares about the price of fuel when theyâre stuck inside the house worrying about their health and their jobs.
Closed Plants
Automotive plants canât simply shut down for a few weeks and then start up again when everything has cleared up. Many plants were already struggling to keep things together and once production stops and their profits disappear, they may close down entirely, taking hundreds, if not thousands of jobs with them.Â
Bottom Line: Car Sales After COVID-19
Itâs highly likely that the hard times will continue for the manufacturing industry. As the coronavirus continues to spread across the country, manufacturing plants will struggle to retain employees, showrooms will shut, and fewer Americans will be willing to pay the $30,000+ required for a new vehicle.
Whether this impacts the future price and availability of automobiles remains to be seen, but itâs highly likely that weâll see some massive changes in this industry. Americaâs best-loved manufacturers will lose millions and could be sent to the brink of financial destruction, while many salespersons and mechanics will likely lose their jobs as demand drops and garages/showrooms close down.Â
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How COVID-19 is Affecting Auto Loans is a post from Pocket Your Dollars.
Source: pocketyourdollars.com
Plymouth Rock Assurance Review
Founded in 1982, Plymouth Rock Assurance provides a selection of property insurance and bodily injury insurance products to customers across the states of New York, New Jersey, Pennsylvania, Massachusetts, Connecticut, New Hampshire.
In this Plymouth Rock Assurance review, we’ll compare this provider to other regional and national insurance carriers, helping you find the best insurance policy for your needs.
Plymouth Rock Car Insurance Coverage
Plymouth Rock Assurance offers a host of car insurance coverage options, allowing you to meet the minimum requirements in your state and go above and beyond those requirements when needed,
Bodily Injury Coverage:Â Limited to a fixed amount of money per person and per accident, bodily injury insurance covers the harm done to other people in an accident. It is designed to help them with their medical bills and other payments resulting from an accident.
Property Damage Coverage:Â Also fixed to a specific sum, property damage insurance is designed to cover the other driver’s vehicle in an accident, as well as other property that you damage.
Collision Coverage:Â A type of insurance that covers you for damages done to your own car. With collision insurance, you will be covered regardless of who caused the accident and you’ll also get cover if the accident involves an obstacle (tree, guardrail, wall, fence) as opposed to another vehicle. You will not, however, be covered if you hit a deer. One of the quirks of this coverage option is that you’re only covered for animal collisions if you swerve and hit a wall/tree.
Comprehensive Coverage:Â With comprehensive coverage, you’re generally covered for the things that collision insurance can’t reach. It covers deer collisions and other accidents involving animal strikes and it also covers damage caused by weather and vandalism.
Personal Injury Protection (PIP):Â This coverage option works like bodily injury coverage, only instead of protecting the other driver and their passengers, it protects you, covering you for lost wages and medical bills.
Medical Payments:Â A type of insurance specifically designed to cover your medical bills. Unlike PIP, medical payments coverage will not give you money lost as a result of missed work.
Underinsured/Uninsured Motorist Coverage: When the other driver’s insurance cannot cover your claims, either because they don’t have enough or they don’t have any, uninsured/underinsured motorist insurance will step in.
Plymouth Rock Assurance Auto Insurance Features
Plymouth Rock Assurance has three different levels of auto insurance: Plus, Preferred, and Premier.  There are different coverage options available at each of these levels and you can upgrade if you feel that those options will serve you well.
Some of the features offered at these different levels, along with the additional coverage offered to all policyholders, include:
- Door to Door Valet Claim Service: Plymouth Rock auto insurance customers can arrange for their cars to be picked up from their homes and taken to a nearby repair shop. Once it has been fixed, it will be returned at a time that is convenient to the policyholder.
- Guaranteed Repairs: If performed at a listed repair shop, all repairs will be guaranteed by Plymouth Rock.
- Comprehensive Claim Forgiveness:Â Plymouth Rock promises that your insurance premiums will not increase just because you make a claim about a stolen or weather-damaged vehicle.
- Get Home Safe: If, for whatever reason, you don’t feel safe to drive home, Plymouth Rock will cover your taxi ride. This can happen one time per year as part of most Plymouth Rock car insurance policies.
- Glass Coverage:Â Plymouth Rock offers several coverage options and policy features related to windshield repair and glass repair. This includes a $100 glass deductible and a waived glass deductible repair.
- New Car Replacement:Â If you have a new car that gets totaled within a specific timeframe, Plymouth Rock will replace it completely.
- Crashbusters: Plymouth Rock will send a Crashbusters team to your location at your request. They will assess the damage done to your vehicle and can help you to file a claim.
- Pet Injury: In the event that your pet gets injured during a car accident, some Plymouth Rock policyholders can claim a small portion of the vet fees. After all, your dog or cat needs cover too!
- Roadside Assistance: With the Plymouth Rock roadside assistance program, you’ll be covered for some of the services charged on broken down vehicles at the roadside, including towing, tire changes, fuel delivery, and more.Â
- Key Replacement:Â Lost your key? With the right cover from Plymouth Rock, you can get a replacement set.
Plymouth Rock Car Insurance Discounts
Plymouth Rock discounts differ from state to state and from user to user. The biggest of these are multi-policy discounts, which are offered when you purchase multiple policies, and prepay discounts, which are offered when you pay your insurance premiums upfront.Â
Other available discounts include:
- Paperless Filing:Â Go paperless and do your bit for the environment while helping to reduce waste and saving a few cents in the process.
- Membership Organization Discounts:Â Make big savings when you are a member of specific organizations.
- Senior Discount: Drivers above a certain age can apply.
- Good Student Discount: Offered to young drivers who obtain at least a B average.
- Safety Features and Anti-Theft Devices: If your car contains key features like trackers, alarms, airbags, seatbelts, and anti-lock brakes, these discounts will be available to you.
- Driver Training:Â Complete driver training courses to prove your skills, show your commitment, and make some savings.
- Low Mileage:Â Drive less and you could pay less.
Other Plymouth Rock Insurance Products
In addition to car insurance, the Plymouth Rock Assurance Corporation offers a wealth of insurance products. These are also confined to a very small part of the United States and include:
Home Insurance
Plymouth Rock offers comprehensive insurance quotes for all homeowners. These policies will cover you for the breakdown of key appliances, loss of personal items, identity theft protection, and even protection against hacks and cybercrime.
You can apply for Plymouth Rock home insurance directly if you live in New Jersey, New York, New Hampshire, Pennsylvania, and Connecticut.
Renters Insurance
Renters insurance will cover you for personal losses in the home, as well as providing liability protection for anyone who gets injured in your home. Plymouth Rock renters insurance is available in the same states as Plymouth Rock home insurance.
Life Insurance
Plymouth Rock life insurance policies are only available in the state of New Jersey. Both term life insurance and variable life insurance policies are available, of which term life is arguably the better choice.
Policyholders can opt for a term of between 10 and 30 years, with the insurance premiums and payouts dependent on your age, health, medical history, and other key factors.
Umbrella Insurance
An umbrella insurance policy essentially increases your liability limits, going the extra mile to protect you. It is a supplemental insurance policy, designed to be added onto car insurance or homeowners insurance and to protect you and your family in the event that a claim is made against you.
Plymouth Rock Customer Satisfaction and Claims Satisfaction
Plymouth Rock has good ratings from customers and experts. It has an A- rating from AM Best, which isn’t the highest possible rating but is a great effort from a relatively small company (when compared to giants like GEICO and State Farm).
The insurance claims process is quick and easy, and while there are a number of bad reviews and complaints out there, Plymouth Rock seems committed to remedying these as quickly and completely as possible.
Furthermore, if you have a bad experience with Plymouth Rock, make your discontent clear and they will make a donation to a charity of your choice. This proves that Plymouth Rock is committed to keeping customers happy and willing to do whatever it takes.
Bottom Line: Car Insurance in New England
Plymouth Rock is a very highly-rated insurance company offering a selection of products directly and through insurance agents. It has accident forgiveness and claims forgiveness; offers a multitude of ways to pay your premiums, and the support team is available around the clock.Â
If you reside in one of the states where Plymouth Rock operates, visit PlymouthRock.com, get a quote, and start comparing. If not, don’t worry, as there are many other great insurance company reviews to check out, including The General, Progressive, and Esurance.
Plymouth Rock Assurance Review is a post from Pocket Your Dollars.
Source: pocketyourdollars.com
How to Get Cheap Car Insurance
For many people, car insurance is a major expense category in the household budget. And because itâs against the law to drive without car insurance, itâs not a budget item that can be eliminated unless youâre willing to go car-free. That doesnât mean, though, that youâre stuck paying sky-high rates. Hereâs how to get cheap car insurance.
Learn about personal loan rates.
How Insurance Companies Set Car Insurance Rates
Like health insurance, car insurance comes with both premiums and deductibles. The premiums are what you pay the insurance company every month to maintain your coverage. The deductible is what youâll pay when you start making claims, up to a certain annual cap of, say, $1,000.
Itâs worth noting that most people who say they want cheap car insurance mean that they want car insurance with low monthly premiums. But, as with health insurance, thereâs a risk to having a policy with low premiums and a high deductible. In the event of a serious accident, youâll have to meet that deductible. So, one way to get lower premiums is to opt for a higher deductible, but this is only a safe strategy if you have enough liquidity to cover your deductible in the event of an accident.
When car insurance companies set insurance premium rates they take several factors into account. These include applicantsâ age, gender and driving history, as well as the type of car the applicant drives and the driverâs state of residence. While you canât change your age, there are other steps you can take to get favorable rates from car insurance companies.
Types of Coverage
Insurance companies charge more for comprehensive car insurance than they do for basic coverage. In most states youâre required to have liability insurance to cover any damage you do to another car or driver. The extent of that coverage requirement varies by state. In most states, youâre not required to have insurance to cover damage to your own car, or injuries you might suffer in an accident.
If you choose to add insurance coverage for yourself, you can opt for comprehensive coverage or collision coverage. Collision coverage, as the name indicates, covers damage from an accident with another car or an object, and in the event that your car flips. Comprehensive coverage covers things like theft, vandalism and natural disasters, too.
So, while youâll almost definitely need to buy liability coverage to cover other driversâ damages, you might not need to buy physical damage coverage for your own vehicle. It will depend on the terms of your lease if youâre leasing a car, and on your own assessment of the risks you face.
If youâre buying a valuable new car, youâll probably want comprehensive coverage. If youâre paying cash for an older, used vehicle, you can probably get away with a more basic level of coverage. Whatever insurance option you choose for yourself, be sure to comply with state laws relating to liability insurance for any damage you might do to another driver. Once you have a car insurance policy, carry proof of insurance with you in your vehicle at all times.
How to Get Cheap Car Insurance Rates
In the long term, one of the best ways to get cheap car insurance is to be a safe, responsible driver. The worst drivers have high rates because the insurance company needs financial compensation for the high likelihood that it will have to pay out in the event these drivers get in an accident. If you have a spotless driving record, keep it up. If you have some accidents or tickets in your past, they shouldnât drive your rates up forever. If itâs been a few years since your last incident, you can try calling your insurance company and asking for a lower rate, using your recent, safe driving record as a bargaining chip.
Another way to get cheap car insurance is to use the same insurance company for more than one type of insurance and get a discount for your loyalty. For example, you can contact the insurance company that provides your homeowners insurance, life insurance or motorcycle insurance and ask if the company can give you a good deal on car insurance. If you have more than one car, you can bundle the insurance coverage on both vehicles.
Your credit score will also affect your car insurance rates, just like it affects the rates youâre offered when shopping for a mortgage. If your credit has improved since you last bought car insurance, you may be able to negotiate your way to cheaper car insurance. And if you pay your car insurance premiums and bills on time and in full, youâll build up goodwill with your insurer and might qualify for promotional rates.
If you donât drive very much during the year, you might get cheaper car insurance from a usage-based plan than you would from regular car insurance. Track your mileage before you start shopping for car insurance and see if your low mileage makes you eligible for a better deal.
If youâre under 25, youâll pay higher premiums, all things being equal. Thatâs because insurance companies judge young drivers to be riskier drivers. You can get lower rates by joining your parentsâ plan, or by using your good grades to get a discount on rates, if your insurance company offers that option. Once you reach your mid-20s thereâs no reason to keep paying the high rates that insurance companies levy on young drivers. You can ask your insurance company to lower your rate, or shop around for insurance from another provider.
Finally, the type of car you drive can affect your car insurance rates. Big, powerful and flashy cars are more likely to trigger high car insurance rates because the insurance company assumes youâll be more likely to speed in that kind of vehicle, and that the vehicle will be a target for theft. Vehicles with high repair costs (such as foreign-made cars) may be more expensive to cover, too. In some states, having a used car will mean lower rates because rates are affected by your carâs replacement value. But in other states, rates are based on vehiclesâ safety features, so having an older car wonât necessarily help you get cheap car insurance. If your car has special safety and/or anti-theft features, you may qualify for cheaper car insurance on that basis.
Bottom Line
If you donât have a vehicle or youâre thinking about getting a new (or used) car, it may be worth doing some research to find out which kinds of cars will get you the lowest car insurance rates. And if youâre paying a lot for car insurance now, you may be able to get cheaper coverage by negotiating your premiums or switching providers.
Photo credit: ©iStock.com/andresr, ©iStock.com/ipopba, ©iStock.com/kate_sept2004
The post How to Get Cheap Car Insurance appeared first on SmartAsset Blog.
Source: smartasset.com
What Is High-risk Auto Insurance? Â
Insurance companies determine risk when calculating rates and offering coverage. If the company determines that your accident risk is higher than average, you’ll have to purchase high-risk auto insurance. Since companies base rates on risk, you can expect to pay more for coverage if you need high-risk insurance.Â
Find out why you might need high-risk insurance, how you can lower your premiums, and more. Then you’ll be ready to shop for high-risk auto insurance if necessary.Â
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Reasons for High-risk Auto Insurance
Insurance companies look at various factors when determining risk. You might need high-risk insurance if you:
- Have lots of at-fault accidents on your recordÂ
- Have a large number of speeding ticketsÂ
- Have reckless driving or racing violations
- Have been convicted of driving under the influence
- Are a young, inexperienced driver, or are over 65 years oldÂ
- Have bad creditÂ
- Use the vehicle for a ridesharing service or another high-risk activityÂ
- Drive a high value or specialized car
- Had your license suspended or revoked
- Let your insurance lapseÂ
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Lowering Your Risk
If you’ve been flagged as a high-risk driver, there are some things you can do to reduce your risk in the eyes of the insurance company. Reducing your risk can lead to lower premiums.
First, if you are high risk due to moving violations, take a defensive driving course. Speak with your insurance agent before taking a class to ensure it’s approved, though.Â
Also, practice safer driving behaviors while on the road. Follow the speed limit and obey all laws. After you hit the three-year mark without any tickets, your premium should decrease.
If you’re high-risk because of a DUI conviction, speak to your insurance company about installing an interlock ignition device. While most companies will not reduce the rates, some will, so it’s worth exploring.Â
Improving your credit score can also lower your premiums. Some insurance companies charge more for bad credit scores, so make your payments on time and reduce your credit-to-debt ratio. Â
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SR-22 Certificate and High-risk Insurance
If you require high-risk auto insurance because your policy lapsed, or your license was suspended or revoked, you might need an SR-22 certificate. This certificate is not insurance. Instead, it is proof that you have the required liability insurance. Your insurance company will issue the certificate and send it to the necessary state office on your behalf.Â
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High-risk Insurance Restrictions
Some high-risk policies include restrictions. For example, you might be the only person protected when driving your vehicle. If someone else drives your car, he or she won’t be covered. Also, if you are in an accident and the court assesses punitive damages, your policy might not cover it. Finally, the company might review your driving history annually and increase your rates if you have any infractions.Â
Because of these restrictions and the high cost of coverage, work hard to reduce your risk, so you can get a standard policy soon.Â
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Getting High-risk Insurance
Finding high-risk auto insurance is a bit harder than purchasing a standard policy. Some major insurance providers offer high-risk coverage, so you can begin shopping there. However, you might have to use a company that specializes in these policies. When you choose such a company, you’re less likely to get turned down for insurance.Â
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Compare Quotes
As with any insurance policy, you should compare quotes before purchasing high-risk coverage. Companies use different formulas for assessing risk. One company might see you as extremely high risk, while another might view your risk at a moderate level, meaning you’ll pay less. After you compare quotes, you can purchase your policy and hit the road once again.
What Is High-risk Auto Insurance?  is a post from Pocket Your Dollars.
Source: pocketyourdollars.com
VA Cash-Out Refinance: Is It a Good Idea? | Rates & Guidelines 2021
The VA cash-out refinance program enables veterans and active-duty service members to tap into their homeâs equity and, depending on current refinance interest rates, lower their interest rate at the same time.
The idea of getting cash out of your home is appealing, but is it a good idea for you? Below, weâll dive into some of the situations when a VA cash-out refinance might be a good fit â and when it might not.
Check your eligibility for a VA cash-out refinance loan today.
Reasons veterans get a VA cash-out refinance
Veterans use the VA cash-out refinance for plenty of reasons â the biggest being that they want to get cash. The cash comes from home equity. So, if you have a mortgage for $200,000 and youâve paid off $50,000, you can get up to $50,000 back in cash, while also potentially lowering your mortgage rate.
Veterans arenât required to take out the full amount possible, though. A homeowner in the same situation could take out $10,000 to fund a small kitchen remodel, to buy a new car, or pay for a vacation, for example.
The most common reasons to get cash from a cash-out refinance is to fund remodels, renovations, and repairs to your home â or to use the cash to pay off other debts. (It may be financially responsible to use a cash-out refinance to pay off credit card debt if the rate on the other debt is significantly higher than the new rate youâll get from a cash-out refinance.)
But, there are other potential benefits to a VA cash-out refinance. You may be able to lower your interest rate and monthly mortgage payment. And, if you have an FHA or conventional loan with mortgage insurance, you could remove that extra monthly cost by refinancing into a VA loan.
Reasons to avoid a cash-out refinance
While itâs a good decision for many homeowners, refinancing isnât the best option for everyone. You should only refinance if you can gain something from the new loan. When determining whether youâre benefitting from a cash-out refinance, itâs important to consider your whole financial situation and your goals.
It could increase your mortgage rate.
When veterans apply for a VA cash-out refinance, theyâll need to supply their credit score. If your credit score is lower than it was when you first applied for your mortgage, then thereâs a good chance that the refinance could increase your mortgage rate.
The clock restarts on your mortgage.
Itâs also important to remember that a cash-out refinance restarts the clock on your mortgage â youâre opening up a new loan with new terms, likely 30-years. This means additional interest costs. Because of this, itâs best to use a VA cash-out refinance for things that will improve your financial situation, and, in turn, improve your ability to repay the loan.
Riskier than other loan types.
VA cash-out finances are often used for home improvements that increase the overall value of the investment, education expenses to increase earning potential, new business ventures, or debt consolidation. Still, all of these options can represent a financial risk. Before proceeding with a cash-out refinance, itâs worth investigating other funding options such as personal loans, specialized loans (like student loans or small business loans) or second mortgages.
Finally, if youâre using cash from a VA cash-out refinance to pay off credit card debt, itâs important to remember that youâre paying off unsecured debt with secured debt â in other words, you risk foreclosure on your home if you are unable to make your mortgage payments for any reason.
VA cash-out refinance rates
VA cash-out refinance rates are currently low. According to Ellie Maeâs Ocober 2020 Origination Report, interest rates for VA loans hovered at an average of 2.75% â 0.26% lower than interest rates for 30-year, fixed-rate conventional loans.
Read more: Current VA Refinance Rates
With rates projected to remain low, Veterans who purchased a home within the last few years should check to see if a refinance could reduce their interest rate and monthly mortgage payment. Your potential savings are dependent on your unique situation â remember to comparison shop with multiple lenders to see who can offer you the best deal.
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When a VA streamline refinance is right instead
If you donât need cash, thereâs no reason to get a cash-out refinance. In these situations, a VA streamline refinance (also known as an interest rate reduction refinance loan or IRRRL) makes more sense. The rates associated with the IRRRL tend to be lower, so you could save more money with that type of refinance.
If youâre looking to take out cash for energy-efficiency improvements to your home, the IRRRL allows homeowners to finance up to $6,000 in improvements that will save money over time, including programmable thermostats, insulation, solar heating, and caulking/weather stripping.
VA streamline refinance vs. VA cash-out refinance
If youâre looking to lower your interest rate and monthly payment, donât need cash out and already have a VA loan, an IRRRL is the easier, quicker, and just plain better option. In fact, streamline refinances require that Veterans lower their mortgage rate to qualify for the loan (also called a net tangible benefit). Thatâs not a requirement with the cash-out refinance.
If you are looking to get cash for an expense like a remodel or debt consolidation, then a VA cash-out loan is likely the better option. Itâs also a good option for Veterans with a non-VA loan requiring mortgage insurance. VA loans donât require mortgage insurance, so refinancing into one, could remove that monthly expense.
How to apply for a VA cash-out refinance
The application and approval process for a VA cash-out refinance is very similar to the loan application process for a home purchase, including:
- Youâll likely need a VA appraisal, especially if your existing loan is a non-VA loan. This establishes the current value of your home and helps determine the amount of cash you can take out.
- Youâll need a credit check and income verification to verify that youâre able to make the new VA loan payments.
- Youâll need to establish eligibility with minimum service requirements, especially if you currently have a non-VA loan.
Also, shop around with multiple lenders to compare rates and terms. This can save you lots of money over the life of the loan and allow you to negotiate better terms.
Check your eligibility for a VA cash-out refinance loan today.
Source: militaryvaloan.com
How To Get The Most Out Of Your Auto Insurance Coverage
Recent data suggests that the average driver will spend close to $100,000 on car insurance over their lifetime. That’s a staggering sum of money, especially when you consider estimates that suggest Americans will pay over $500,000 in that time just to own, operate, and maintain a car.
$100,000 is a lot of money to spend on something that you may never benefit from, something that you’re only buying because your state authorities told you too. But while car insurance policies are essential, the amount that the average consumer spends on them is not.
In this guide, we’ll look at the ways you can save money on auto insurance premiums and get the most value out of this necessary expense.
Build Your Credit Report
Never underestimate the value of a high credit score and a clean credit report. Not only can it help when applying for a car loan, increasing the value of the car you can purchase and decreasing the interest rates you’re charged, but it will also reduce your car insurance rates.
There is no easy and quick way to turn a bad credit report into a good credit report, but there are a few simple changes you can make that could increase your score enough to make a difference. These include:
- Stop applying for new lines of credit.
- Become an authorized user on a respectable user’s credit card.
- Increase credit limits on your active credit cards.
- Pay off as much debt as you can, focusing on credit cards and personal loans first.
- Don’t close your credit card accounts after clearing them.
If you don’t have any credit at all, which is true for many teen drivers getting behind the wheel for the first time, try the following options:
- Credit builder loans
- Secured credit cards
- Lending circles
Choose Your Car Carefully
A new car is a great way to get a high-tech, customized vehicle, but it’s not ideal if you’re looking to save on insurance costs.
New vehicles cost more to insure because they are a greater liability, with more expensive parts and greater overall value. If you want to save on your auto insurance coverage, look for a car that is at least a few years old, has a number of safety features and a high safety rating.
The cheaper, the better, but only to a point. You want something that won’t leave you in complete financial ruin if it’s wrecked in a car accident and you don’t have the insurance to cover it, but something that won’t breakdown every few miles and leave you stranded and broke every other week.
Drive Safely and Prove Your Worth
Your driving record is just as important as your credit report, if not more so. The more at-fault accidents, traffic tickets, and insurance claims you have, the higher your car insurance rates will be.
A single conviction won’t last forever and the impact will eventually dissipate, so even if you have a few blemishes on your record now, just keep driving safely and you’ll be able to reap the benefits before long.
It takes time to prove your worth to insurance companies, but there are a few things you can do to expedite this process. The first is to take a defensive driving course. In some states and for some demographics (mostly seniors and young drivers), you’ll be offered a discount for completing one of these courses.
The next step is to consider a usage-based program. These are offered by most major insurance companies and can track your driving habits to determine what kind of driver you are. If you’re driving safe and doing very low mileage, you could start seeing some noticeable changes in just a few months. The majority of providers will even give you a discount just for signing up.
Pay Everything Upfront
Most policyholders pay their premiums monthly and it may seem like thatâs the best thing to do. $100 a month seems infinitely more manageable than $1,200 a year.Â
It is an attitude that many people have, and itâs one that often leads to debt and poor decisions.
Millions of Americans have credit card debt because a $200 monthly payment seems more achievable than a $5,000 payoff, even though the former carries a phenomenal interest rate. It’s also why countless first-time buyers rush into getting mortgages with small down payments and high-interest rates, even though doing so could mean they are paying twice as much money over the term.
Whenever you can benefit from making an upfront payment, do it. This is true for your loan debt and credit card debt, and it’s also true for your car insurance premiums.
Many insurance providers offer you an upfront payment discount of up to 5%. It doesn’t sound like much, but every little helps. If you have a $3,000 car insurance policy, that 5% adds up to $150. Add a few more discounts and you can save even more money and make an even bigger dent in your insurance rates.
Combine Policies and Vehicles
Insurance companies that offer multiple types of insurance tend to offer discounts when you purchase several products from them.
Known as multi-policy discounts or “bundling”, these offers are common with homeowners insurance and auto insurance, but they are also offered with renters insurance and life insurance.
You can combine several vehicles onto the same auto insurance policy, as well, saving much more than if you were to purchase separate policies.
These discounts are essential for multi-car households, but they are not limited to cars. Many insurers will also let you add boats, ATVs, motorcycles, and other vehicles onto the same policy.
Shop Around
Before you settle on a single policy, shop around, compare as many car insurance quotes as you can, try multiple different insurance options (uninsured/underinsured motorist coverage, comprehensive coverage, collision coverage) and make sure you’re getting the lowest rates for the best cover.
Too many drivers make the mistake of going with the same provider their friends or parents have; the same provider they have used for a number of years. In doing so, they could be missing out on huge savings.Â
You could be forgiven for thinking that all providers offer similar rates and that the difference between them is minor. But regardless of your age, gender, and state, the difference between one provider and the next could be up to 200%!
Check if You’re Covered Elsewhere
Car insurance companies offer a number of add-ons and optional coverage options. These are enticing, as they cover you for numerous eventualities and some of them cost just a few dollars extra a month. But all of those dollars add up and could result in you paying much more than you need for cover you already have.
Roadside assistance is a great example of this. It will help you if you are stranded by the side of the road, assisting with services such as tire changes, fuel delivery, towing, and more. But if you have a premium credit card or are a member of an automobile club, you may already have that cover.
The same goes for rental car coverage, which is often purchased at the rental car counter. Although it has its uses, if you have an auto insurance policy, travel insurance, and a premium credit card, you’re probably already covered. In fact, many Visa credit cards offer this service completely free of charge when you use your Visa to pay the bill, but only if you reject the waivers sold by the rental car company.
Bottom Line: Best Auto Insurance Companies
âCar insurance coverage varies from state to state and provider to provider. There is no “best” company, as even the ones with consistently affordable rates will not be the best option in all states or for all demographics.
In our research, we found that GEICO was consistently one of the cheapest providers for good drivers, bad credit drivers, and even high risk drivers. GEICO also offers personal injury protection, collision insurance, medical payments, uninsured motorist coverage, and more, making them the most complete provider for the majority of drivers.
However, in some states, local farm bureaus come out on top, offering very cheap bodily injury liability coverage and property damage liability coverage, and giving policyholders a level of care and attention that they might not find with the bigger, national providers. USAA, which offers cheap car insurance to members of the military, also leads the way in the majority of states, but only for those who meet the criteria.
Simply put, there is no right insurance provider for you, just like there is no right coverage. That’s why it’s important to shop around, chop and change your coverage options, and don’t assume that any type of coverage or provider is right for you until you’ve looked at the numbers.
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How To Get The Most Out Of Your Auto Insurance Coverage is a post from Pocket Your Dollars.
Source: pocketyourdollars.com