May 20, 2010

Finding The Best Auto Insurance Quotes For A Fully Financed Vehicle

There are two ways to buy a new vehicle. The first is to pay for it yourself, outright, be it with cash or on a credit card. For many consumers, however, having that much cash on hand or dealing with interest rates and other credit card charges just are not feasible. The second way to purchase new vehicle is to have it financed, either through a bank or a credit organization run by the car dealership itself. This can yield more options than an out-and-out purchase, such as cash back, discounts, or a zero percent interest rate over the term of the payments. What is important to bear in mind, however, is that financed vehicle auto insurance is subject to different rules than typical auto insurance – because the financing company essentially “owns” the vehicle, they are able to insist that some types of coverage are always present on the vehicle.

Typically, a financing company will require any vehicle they have paid for to have physical insurance on it, which is a combination of collision and comprehensive insurance. Collision insurance is just that – it covers damages sustained as a result of a collision. Comprehensive auto insurance takes care of any other damage to the vehicle including theft, fire, or vandalism. It can often be difficult to find the best financed vehicle auto insurance quotes, as more coverage is required and often at a greater price than a typical car. One way to help ensure that the best coverage options for your vehicle are purchased is to do a survey of online auto insurance quotes to see what choices are available based on your year, make, model and insurance history.

While premiums for financed vehicle auto insurance can be costly, having the right kind and amount of insurance is essential, as the financing company is able to force insurance onto a vehicle if their conditions for the coverage amounts are not being met. In this case, the premiums for the insurance and the company supplying it will be out of the owner’s hands, and the cost can be astronomical. Once physical coverage is in line with what the financing company wants has been obtained, the forced coverage can be removed.

When looking for auto insurance for a financed vehicle, be sure to keep in mind the fact that it must meet all requirements laid out by the financing company. The typical requirements are for physical damage insurance, but a company can impose whatever requirements they choose in order to loan out money for a vehicle purchase. So long as care is taken when searching for quotes online, finding a reasonable rate for a financed vehicle should be possible.