How To Save On High Risk Auto Insurance | VAL Blog

How To Save On High Risk Auto Insurance

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High risk auto loans are for people who need credit to buy a car, but have a bad credit record. Since, for them, getting a loan usually means paying a high interest rate, it is much more expensive than the same loan would be for someone with a good credit record. However, there are good options out there for people to get the car they need to get to work and try to improve not only their credit rating but also their lifestyle.

People, who have signed on for a high risk auto loan, often try to think of other ways to reduce their spending, and one way that comes to mind is to reduce their auto insurance payments. This may mean not getting full coverage auto insurance. One way to compensate for this problem is to select the right type of car. Believe it or not, one way insurance companies decide how much to charge a person for auto insurance is by the type of car they have.

Reduce Insurance Rates

Certain BMW models can cost more than twice as much to insure than a small compact car. High horsepower engines, two-seater, racing tires and even racing stripes on the side will all contribute to higher insurance costs. Other things that affect the price of car insurance:

  • Where the car is parked at night can also raise interest rates. If it is parked on a street where it could easily be stolen, the insurance rate will go up. If it is regularly parked in a garage or even in a driveway, the price will be reduced.
  • Adding security devices to the car is another way to reduce the insurance. A GPS tracking device will help the authorities find the car if it is stolen. An alarm system that will deter auto theft is another accepted security device. Automatic seat belts, air bags, daytime running lights and anti-lock brakes can all contribute to car insurance savings.
  • Avoid moving violations and accidents. In many cases, the people who have a good driving record get lower cost insurance.
  • Only buy the coverage you need. If your car is old, it may not be worth paying for a policy that cost more than the value of the car. You should also check if you have roadside assistance through your credit card or the AAA. If so, don’t buy roadside assistance through your insurance policy.
  • Increase the deductible. This means you pay more at the time of an accident before the insurance company starts to pay. This is one of the best ways to reduce the cost of insurance, but you must be sure to keep the amount of your deductible somewhere safe and not touch it for any reason. Then, you’ll have it when it is needed.

There are more ways to reduce the cost of auto insurance. Consumers who do a little research will end up paying much less for insurance than those who simply follow the first information they get. It is important not to believe the advertisements of the insurance companies but to ask questions and completely understand the type of coverage you are buying as well as how to make a claim. Here are a few more ways to save on insurance:

Compare

This is probably the most important because insurance companies want business, the more the better, so they tend to be competitive. The three main types of insurers are companies that sell through agents such as State Farm and Allstate, companies that sell directly to the consumer such as Progressive and Geico and independent agents who sell policies for several different companies.

The lowest quote for auto insurance isn’t always the best option. This is why comparison is crucial. Not only should the price be compared, but the coverage also needs to be compared. The low price from one company may not give enough coverage. The opposite can also be true. A high price may also not give the right coverage. Before doing the research, consumers need to decide what kind of coverage they need.

There are websites that automatically compare auto insurance rates from different companies. This is the easiest way to begin a comparative study but not the only way. It’s a good idea to talk to someone from the different companies too, before making a selection.

Combine

If the consumer already has other insurance policies such as life insurance or home insurance, it is often the best bet to get auto insurance from the same provider. For one thing, insurance companies often reduce their rates for customers who have been with them for years. Another possibility is to bundle the auto insurance in with the other insurance policies. This can only be done if all of the insurance policies are with the same carrier.

Even if you have policies from other companies, it is a good idea to compare prices for a combined policy from several insurance companies. This may mean losing any advantage you had for being a long-term customer, but, in some cases, it might be worth the switch. You won’t know unless you ask.

Raise Credit Score

It is a well-known statistic that people with better credit reports, file fewer insurance claims. This translates into lower costs for insurance for people with higher credit scores. Even though you are looking for help in getting a car loan with a low credit score, it doesn’t hurt to do a few simple things that may raise your credit score. Here are a few suggestions:

  • The first thing to do is find out what your credit score is. You have the right to one free copy of your credit report from each of the three credit bureaus, Equifax, Experian and TransUnion, every year. Some credit reports change several times a year. This gives you a good opportunity to raise it, even a bit, before you apply for an auto loan.
  • Once you see your report, check to see if there are any errors. The people who report your credit to the bureaus make mistakes all the time, and it is important to make sure there are none on your report. If there are mistakes, you can send a letter requesting the mistakes be removed or corrected. This could raise your credit score.
  • Make an effort to reduce your debt. If it’s at all possible, it’s a good idea to stop using credit cards. At least for a while. You can look on your credit report and see what accounts you have. Then find out which ones have the highest interest and make the highest payment to them. The rest can get a minimum payment.
  • Pay bills on time. If you have missed payments, try to get them up to date. Missed payments impact your credit score. Also, try to pay on time. Late payments can also reduce your credit score. It may help to set up reminders for paying bills.
  • Ask a legitimate credit counselor for help. This will not hurt your credit score and many creditors may be willing to reduce your debt if you are trying to make a genuine effort to make payments. You can also talk directly to your creditors. Creditors have been known to forgive debt and reduce payments simply because the borrower made an effort to demonstrate that they are serious about repaying debt.

Discounts

As mentioned earlier, insurance companies are in competition with each other and usually give discounts for various reasons. In some cases, if you don’t ask, you don’t get, so there’s no harm in asking if any discounts are available. You may qualify for a low-mileage discount. If you reduce the amount of miles you drive by carpooling or taking public transportation some of the time, most insurance companies offer discounts for this. Some of the most common discounts are for:

You have learned several ways to reduce your auto insurance rate. Start with buying a car model that insurers consider less risk, improve your credit score as much as you can, combine your auto insurance with any other insurance policy you have and, the most important, compare, compare, compare.

With all of these suggestions, you may still find yourself in the position of having a low credit score and needing a car loan. Don’t worry, there’s hope. We offer unique lending connections to get you secure auto financing quickly. You’re credit history is not an issue.

We have a huge network all over the country of bad credit finance companies that are willing to give the loans. We focus on the goals of the customer, and seek to help them reduce their debt and raise their credit score. We do our best to provide the lowest interest rate possible and monthly payments through our trusted partners.

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