The budgets of bad credit car loan buyers are often stretched but here are eight tips could end up saving you money on your car insurance rates.
Insurance costs
At Auto Net Financial we understand the budget constraints many of our customers face when they fill out our bad credit auto loan application. But in working with credit-challenged consumers, we have also noticed that many of them are unaware of how they can save money and, at the same time, can ensure that they have a better chance of success in the process of raising their FICO scores and reestablishing their credit.
One of the things that we recommend is to keep the loan term as short as possible and the total monthly transportation budget as affordable as possible. This means bad credit car loan applicants should consider a mid-size or compact car instead of that SUV to keep their payments low and the loan term as short as possible in order to save on finance costs.
Picking out an affordable vehicle not only saves on finance costs, it can also be more affordable to insure. So with that in mind, here are some money-saving insurance tips to follow before making that final car-buying decision.
Eight insurance savings tips
1. Shop around for your policy
There are basically three types of auto insurers. Companies that use direct writers (i.e. Geico and Progressive) have employees who will sell directly to you. Other companies, (Allstate and State Farm are good examples) work through exclusive agents who will sell only their policies. Finally, independent agents are able to sell policies from those companies they are signed up with.
Although direct insurers are usually the most affordable, this also means that they can be picky about who they insure. Your best bet, then, would be to get quotes from at least one insurer in each category. You can also go online and receive quotes directly from insurers or go to one of the many insurance web sites that will comparison shop for you.
2. Consider combining your policies
In many cases, buying your homeowners insurance and auto insurance from the same provider will qualify you for an additional discount. But it’s always a good idea to check this out first. If you’re thinking of combining your policies, shop both of them around to make sure you’re getting the best deal on a combined rate.
3. Review your credit report first
Bad credit car loan buyers should always pull their credit report a few months before shopping for a car. By doing this, you can correct any mistakes and possibly raise your credit score before visiting the dealer.
Many auto insurance companies also look at your credit report, since it’s been proven that drivers with high credit scores tend to file fewer insurance claims. By improving your credit score before you get that new car, bad credit car loan consumers could also be saving themselves money on their auto insurance.
4. Join a professional association
Many auto insurers give discounts to associations such as AARP, university alumni, and military groups.
5. Check for student discounts
A number of insurers will discount your policy if your teenage driver is a good student or has taken a defensive driving course. If your children are attending college and at least 100 miles away, there is also a discount for that. You should also keep in mind that if you have a child that is sixteen or over and doesn’t have a driver license, you are not required to insure that person.
6. Choose your car wisely
Bad credit car loan applicants should realize that now is not the time to finance their dream car. But in addition to lowering your monthly payment and reducing interest charges, a small to mid-size sedan can also save on insurance costs.
One additional tip: if you’re looking at two different vehicles and can’t decide on which one to buy, check with your insurance agent before making that final decision – you could save yourself hundreds of dollars a year simply by choosing the model that is less likely to be stolen.
7. Check for low mileage discounts
Some insurers also offer discounts if you drive below certain mileage thresholds each year.
8. Consider electronic payments
You can save money with some insurance companies by having your monthly payment electronically transferred from your savings account, checking account or credit card account. Some insurers will also offer you savings if you receive your monthly bill electronically.
The Bottom Line
There is a smart way of approaching a bad credit car loan. By choosing an affordable car and taking advantage of as many auto insurance discounts as possible, you will give yourself a better chance of coming through the auto credit reestablishment process successfully.
Auto Net Financial is in the business of helping consumers with bad credit find a dealer that can get them financed so that they can begin to reestablish their auto credit and improve their FICO scores. These affiliate dealers are knowledgeable and treat all their customers, regardless of their credit background, with dignity and respect.
For more information on the bad credit auto loan process and filling out a bad credit car loan application, please visit our web site at www.autonetfinancial.com.
