Do not let something like this cost you more than it should!

Making the right choices about your auto insurance could prove vital to maintaining financial stability in the future. If you are financing your vehicle you will need full coverage insurance. The bank will require this. If you aren’t financing, you will need at least liability coverage but should consider more comprehensive insurance. Better coverage may cost less than you think per month, and it may save you a ton of money in the future.

Liability pays to fix someone else’s car if you are at fault. Collision pays to fix your car if you are at fault. Comprehensive pays to fix you car for non-accident related damage like vandalism or storm damage. Uninsured Motorist Coverage pays to fix your car when the at-fault driver does not have liability insurance.

Your Deductible is the amount of money you pay before the insurance company starts to kick in per incident for collision and comprehensive claims. If you choose a $500 deductible and cause $750 worth of damage to your car, you pay the first $500 and the insurance company pays the last $250. If you choose a $250 deductible in the same situation, you pay the first $250 and the insurance company pays the last $500. Lower deductible policies cost more per month, but the difference is usually minimal. Many lenders limit you to a maximum of $500 deductibles for comprehensive and collision coverages. Consider even lower deductibles.

Repair shops require full payment before they release a vehicle. Many people find themselves between a rock and a hard place when they can not get their car back until they pay their deductible, but need their car to drive to work to earn the money. Some people fall behind on other bills and risk their credit score so they can get the car out of the shop. Could you continue to make your car payment if you had to shell out $1000 all-of-a-sudden to get your car repaired? Would other bills suffer? Would this harm your credit possibly costing you more in interest on the next loans you take out?

If your vehicle is only worth $500 to $1000 you probably do not need full-coverage insurance. Most of us need full coverage because we have loans on our cars. If this is you, get insurance quotes for a variety of coverages and choose an option that will really save you money in the long run. No one can know when an accident may occur. We can not plan for how often we will be out that $1000 deductible, but it may pay big to opt for the better coverage when purchasing insurance.

At WashingtonAutoCredit.com, we want to help you make smart financial decisions in all aspects of your life, not just auto loans. Please consider WashingtonAutoCredit.com for the help you need to get your next car loan.

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This entry was posted on Wednesday, March 12th, 2008 at 10:23 AM and is filed under Autos, Car Buying Tips, Car Loans, Credit, Financing, Vehicle Financing, auto financing, auto loans, bad credit, bad credit auto loans, bad credit loans, car buying advice, cars, general. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.