May 23, 2010

How Auto Insurance Changes When A Vehicle Is Paid Off

So the 60 months that seemed like forever are finally up and your car is finally paid off. Yes, you own your own vehicle and you start imagining all the money you’re going to save now that you’re no longer obligated to the ball and chain of your car payment. What’s the next step? After you jump for joy and do a celebratory victory dance, your next step should be shopping around for auto insurance quotes to reduce your rate and save money by dropping coverage you no longer need. Understanding the dynamics that come into play after a car is paid off can assist you in finding reasonably priced auto insurance for your paid-off vehicle, while maintaining the right amount of coverage that you’ll need.

One of the requirements when purchasing a vehicle through a finance company is to maintain comprehensive and collision coverage. Once your loan is paid off, you will no longer be legally responsible to carry this coverage, which in turn may reduce your rates and save you money, but you should not just drop the entire coverage completely without some careful thought and consideration. Comprehensive and collision insurance includes a wide array of coverage including vehicle damage during accidents and vehicle theft. Therefore, this coverage should only be dropped once one has taken time to evaluate its necessity to his/her own situation. You must understand that once you have paid off your car, and its value decreases. Even though you may consider dropping this coverage to save money on premiums, you should take into consideration whether or not the savings would be enough to offset the risk of having to pay the entire cost of repairing or replacing the vehicle .

Once you do decide on the coverage you want, when shopping for auto insurance quotes you should be sure to ask about any available discounts such as reductions for drivers who own their own vehicle. Being that you own a recently paid-off vehicle, you want to make certain that your vehicle remains well protected. You should obtain several quotes to contrast and compare while making sure that the coverage you select considers such factors as the make and model of the vehicle, its features, such as air bags and an anti-theft deterrent device, along with your driving habits to ensure the best quality and coverage at an affordable rate.

Remember, it’s much better to have too much coverage or more than you need rather than not having enough, especially when you’re driving a car that you own. By shopping around, you can definitely keep an adequate amount of coverage while still getting a very good premium.