With many budgets stretched thin, drivers who can’t put off replacing their vehicles may consider a used, or “pre-owned” car. CarInsurance.com just published comprehensive guidance on used car insurance, including:
· What coverage is required
· Average insurance rates for used cars, by year, make and model
· Comprehensive vs. collision insurance considerations
· Information needed for insurance application
· Time limits for obtaining insurance
· Tips on getting the lowest premium rates
Because auto insurance can significantly impact the total cost of car ownership, it’s best to understand differences in insurance costs when comparing used vehicles.
Review the complete report: Do you need insurance when buying a used car?
“Regardless of financial circumstances, consumers may prefer used cars to avoid the large depreciation associated with new car purchases,” notes Michelle Megna, CarInsurance.com’s editorial director. “We’ve prepared this guide with a convenient tool enabling all used car buyers to be well-informed about the requirements, options and costs particular to specific vehicles.”
I had a chance to interview Penny Gusner from CarInsurance.com to learn more.
How can people make informed decisions about how their cost of insurance compares to others?
Typically, you don’t need to compare your cost of insurance to others as each person or household has their own unique personal information (driving record, how long you’ve been licensed, credit score, etc.) but to get the best price on car insurance, you should compare the cost of a policy by getting quotes from multiple insurance companies. To comparison shop and get the best deal, you must make sure you are comparing apples to apples, meaning the same coverages and limits.
If you are interested in what affects car insurance there are common rating factors that insurance companies use (though may vary a little due to state laws or internal guidelines):
Location
Years of driving experience
Driving record
Claims history
Credit history/score
Age
Gender
Marital Status
Previous insurance coverage
Vehicle type
Vehicle Use
Miles driven annually
Selected coverages, limits and deductibles
We have more in depth information on these rating factors here:
https://www.carinsurance.com/Articles/10-factors-that-affect-your-car-insurance-rates.aspx
https://www.insure.com/car-insurance/car-insurance-factors.html
The basics for your rates is the insurer reviews these factors to see how much of a risk you pose to the insurer. The more risk you pose, the more you’ll pay. This is why you can’t really compare how much you pay for insurance compare to your friends or family since their specific personal information is different than yours. What you can do is comparison shop to make sure you are getting the best deal based on your specific rating factors.
What are collision and comprehensive insurance and how can drivers choose between them?
Collision and comprehensive insurance are physical damage coverages, meaning they cover damages to your vehicle. The property damage liability coverage that most all states require drivers to carry only covers damage to other’s property that you damage, not your own car.
Collision and comprehensive usually are both purchased on a policy as they go hand in hand to give your vehicle the best coverage. Collision covers your vehicle for damage due your vehicle hitting, or being hit, by another vehicle or another object, regardless of fault. It also covers the upset of your vehicle, so if it rolls or flips in an auto accident. So if you cause an accident and your car is damaged or if your car is damaged due to a hit and run, you can make a claim with your collision coverage.
Comprehensive covers your vehicle for damages for things other than a collision. The covered perils include: fire, theft, vandalism, glass damage, striking an animal or bird, damage from falling objects, floodwaters or severe weather.
Both comprehensive and collision come with a deductible, which is an amount you must pay before your coverage kicks in. So if your damage will cost $3,500 to repair and you have a $500 deductible, you pay the $500 and your insurer pays the remaining $3,000.
I would recommend buying both coverages instead of choosing between them as they both cover different things. Most insurance companies offer the coverages together. If you have a financed vehicle, the finance company will require you to carry both. If you own a car outright, then you can drop the coverages, though if you want your car protected, it’s wise to keep them.
You can read more on the coverages here:
https://www.carinsurance.com/what-is-collision-coverage-insurance
https://www.carinsurance.com/coverage-definition/comprehensive-insurance.aspx
How can people compare different policies well?
When buying a car insurance policy, you want to compare the same coverages, limits and deductibles. So, the first step is to decide on what you need. If you have an old vehicle that isn’t worth much, you may only want state minimum requirements. However, most people want full coverage on their vehicle, which is state required coverages plus collision and comprehensive. If you have a house, family and assets to protect, higher liability limits, such as 100/300/100 or more, are recommended as most state limits are too low to give any real protection.
Once you know what exact coverages, limits and deductibles you want, shop with at least three insurers to compare costs. And, while price is important, make sure before you purchase a policy from the cheapest insurer to check out their financial strength and reviews on customer service and claims. Their financial strength rating will show if the company is on firm ground to pay out on potential claims, then you also want to know their service for claims and with customers is satisfactory. It’s easy to shop around online now with comparison sites or if you’re old school, you can call and have agents give you quotes.
If you’re looking for certain perks in a policy, such as disappearing deductible or accident forgiveness, compare rates for companies that offer this.
What can drivers do to get the best insurance for their budget?
Comparison shopping is the best thing to do to get the best price for their budget. Also, making certain that the coverages, limits and deductible chosen are the right ones. You can save by raising your deductible from say $500 to $1,000 and can save by making sure you’re getting all the discounts you’re eligible for. If you want to go for the bigger discounts offered by insurers, try out a usage-based policy. With this the insurer monitors your driving and if you show to be a safe driver, you can get discounts of up to 30% or more. Also, see about bundling your home and auto insurance to get discounts on both policies, plus with this you’ll only have one insurer to remember and deal with for payments.
About CarInsurance.com
CarInsurance.com is owned and operated by QuinStreet, Inc. (Nasdaq: QNST), a pioneer in delivering online marketplace solutions to match searchers with brands in digital media. QuinStreet is committed to providing consumers and businesses with the information and tools they need to research, find and select the products and brands that meet their needs. CarInsurance.com is a member of the company’s expert research and publishing division.
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