How to Keep Your Car Insurance Payments Reasonable

by Chop Shop Customs
Buying car insurance can be a painful learning experience. Finding the best rate is just the beginning of your education. Your first challenge is to understand how the automobile insurance industry works. This business is remarkably tight-lipped about its inner workings.

As with all-things-financial, your credit score counts. If you have good credit, you pay less for car insurance. This is because the insurance industry has found a direct correlation between credit scores and the likelihood you will file a claim. This insight is informed by the financial stability of those who maintain good credit. The car insurance gurus use your credit information to calculate your “insurance risk score,” an important factor in the rate you will be quoted.

Your choice of vehicle definitely affects your premium. The auto insurers have a rating system for every car make and model based on its initial cost factored with safety and theft data. The insurance industry keeps these ratings to themselves, but there are sources for the information. Try an Internet search.

You’ll also pay less for your insurance if you can pay in full. Installment plans always come at a cost. The smaller your payments and the more numerous your billing periods, the more you will be paying. After all, the “installment plan” is a loan and usually involves extra costs.

It stands to reason that bad drivers always pay more for insurance. The industry standard calls for increasing your premium by 40% over the base rate after your first at-fault accident. If your base rate is $500, you’ll be paying $200 more after that accident. In most states, your insurance will go up if and when you receive a moving violation by Officer Friendly.  Safe drivers with no claim history or “points” from traffic tickets pay the least for their car insurance.

Comments

VALUABLE INFORMATION
THANKS!

[BookWise]

I did not know that the insurance company could be responsible for the sales tax on my replacement car!

Question: Does the replacement car need to be a NEW car or can it be a used car?

Thanks for all the great information.