January 27, 2012

Choosing An Auto Insurance Deductible For An Inexpensive Vehicle

The reason that most people buy an inexpensive car in the first place is to try and save money. That means that auto insurance shouldn't take that away. While there are many ways to try and keep the insurance affordable, looking at the car insurance deductible is the most effective way to keeping everything as affordable as possible.

There are several factors that go into the cost of auto insurance. The make, model and year of the car have an impact and the zip code of where the policyholder lives also has an impact. These aren't very flexible because they are what they are.

What a person does have control over is their car insurance deductible. This is the amount of money that comes out of a person's pocket after a claim is filed before insurance will begin paying for the damages. This can range from about $250 per accident to well over $1,000. By taking into consideration how inexpensive a car is, it will be easier to decide on the appropriate deductible.

The more expensive the car is, the more expensive the auto insurance will be. The reason is because the insurance companies know that it will cost them more to replace the car in the event of an accident being severe enough to total the car. That being said, however, insuring a cheaper car doesn't necessarily make auto insurance cheaper.

What a person pays out of pocket for the deductible should be representative of the car itself. If the value of the car is very low, a person may only want to pay a few hundred dollars of their own money to get it fixed. After a certain point, a person may need to cut their losses and just consider buying a new car, especially if the value of the current car is very low.

Looking at a person's driving history can be a good indication of how many times they may have to pay the deductible. If a person has never gotten into an accident, then they aren't likely to get into an accident. As a result, paying a higher out of pocket deductible will keep the cost of auto insurance down. However, if a person is constantly getting into accidents, a lower out of pocket may be a better idea to help keep the cost of auto insurance in check, even though the premium will be a little higher.

Unfortunately, the liability portion of your insurance premium mostly determines the total premium when it comes to inexpensive cars. But no one wants to pay a fortune to insure their inexpensive car so deductibles need to be managed effectively.