How Does A Used Car Affect The Insurance Premiums?

Several factors go into determining your insurance rates, such as your location, vehicle type, deductibles, and vehicle usage, to name a few. Due to the shortage of new cars in the market, the used car wing is in full motion. One major problem, however, most used car owners face is a higher auto insurance premium payment.

Read below to find out how the used car market is performing, how you can save up on rising insurance rates, and any other questions you may have.

The Used Car Market

The impact of the coronavirus continues to affect the way the automotive industry works. A disrupted supply chain means fewer cars being produced and a rise in the prices of older vehicles. The increased price of used cars has also increased the insurance payments on them.

Many experts suggest using the 20/4/10 rules when planning to finance your automobile purchase. This rule states:

  • Pay 20% of the entire purchase price as a down payment.
  • Set a 4-year loan maximum (or less)
  • Only 10% of your gross revenue should be used for monthly payments.

Now that you have a plan in place, all you have to do is find a suitable vehicle that will help you keep track of your budget, expenses, and auto insurance premium. Keep reading to see how you can save up on auto insurance premiums. 

An old truck up for sale

Saving Up On Auto Insurance Rates

If you are looking for cheap car insurance, below are some steps to help you get one. Since market conditions and stipulations are out of your control, a few things you can do to save up on insurance payments are:

1. Compare rate quotes

You can shop around for premium payments and quotations from various insurance companies in your area. Call insurance agents and inquire about their sub-policies and which ones you can cut loose. Although your current insurance company might seem like a good fit for you, another policymaker may offer you even better rates on your used car.

Key elements to compare are discounts, quotes, customer reviews and satisfaction, and any other features companies may offer. 

A pen and calculator placed on a legal document

2. Increase your discounts

Once you have chosen your insurer, speak with their auto insurance agent to discuss any additional discounts they can offer you. Companies can miss out on something important, so it’s better to ask them yourself.

3. Drop Out Of Extra Coverage Options  

Auto insurance programs usually provide liability coverage, medical payments, comprehensive coverage, motorist coverage, and collision coverage under a full coverage car insurance policy. You might not use each type of insurance, so opt out of the ones that seem extra. If your vehicle is financed, your lender might ask you to get comprehensive or collision coverage just in case.

4. Increase Deductibles

Comprehensive and collision insurance coverage comes into play when vehicle repair and maintenance are involved after an accident takes place. Consequently, these policies cause the premium payment to be higher.

Skipping these additional costs can help you avoid extra insurance costs and save up. You can also increase your pocket deductible to decrease the premium these coverage policies carry as long as you can afford to pay later. 

Car keys placed on white background

Frequently Asked Questions

If you still have questions, you are not the only one. Here are a few common questions customers ask us:

1. What are the best car insurance companies out there?

The best car insurance company differs for different people. Depending on the rate, the amenities, and other functional bits of your policy, you might prefer one insurance company over another. The best way to determine which company works best for you is to get online and find out about auto insurance policies that work best for you.

2. Where can I find cheap insurance companies?

There are many cheap insurance companies throughout the country. This, however, doesn’t mean that they cover all the services you require. Once again, cheap car companies may be different for different people.

If you want to pay lower insurance costs, seeking insurance companies offering usage-based programs might work for you.

3. Does paying off your car reduce insurance premium payments?

Insurance premium costs do not decrease as you pay off your car loan. While a loaned car is backed by a higher premium, you can choose to cancel out some auto insurance sub-policies, such as comprehensive or collision insurance. Most professionals and insurance providers do not recommend this cost-reduction method because of how limited the extra layer of safety it provides is.

A vintage car revamped for resale

Used car demand has driven up premiums on secondhand vehicles. When you choose your insurer, make sure to ask them about additional discounts and cancel out any extra coverage that might help you out of large insurance payments.

We Offer Affordable Insurance Rates For Your Vehicle!

Western Mass Auto Insurance Inc. is based in Springfield, Massachusetts, and operates in Indian Orchard and Forest Park. We provide multiple types of insurance, such as home insurance, auto insurance, renter’s insurance, and commercial auto insurance. Our insurance agents provide quick and friendly full registry services, insuring your license plates are in 15 minutes. We also provide free insurance quotes to our customers upon request.

If you are interested in multiple insurance policies, our expert insurance agents also offer personalized bundle offers at affordable rates for you. We also have online policy management for our customers that allow remote access to services like online policy viewing, making payments or filing claims. Western Mass Auto Insurance Inc. collaborates with various auto insurance companies to bring you the best rates in the market!

If you are interested in our services, give us a call today for more information on what we do. You can also click here to find out more about us.