Find Out the Cost of Insurance BEFORE Buying the Car

Don't let this happen to you: You make the decision to purchase a vehicle, get it home, call to add it to your insurance, and then find out that your monthly insurance premium just did a big jump UP?

This can be stressful if you’re not expecting it!  Here are a few things to keep in mind before you sign on the dotted line:

One important thing to remember when purchasing a vehicle is that the salesperson wants to make a sale.

Unfortunately, they might lead you to believe that this model of car has cheaper insurance than your old one, even if they don’t know for sure!  For a long time, there was a myth that red cars cost more than other colors to insure, but it’s just not true. 

Some dealerships will offer car insurance at their location and may give you a general “quote” on the cost, but this can be unreliable as well.  The information may assume a better credit rating or driving record than you have, leading to an unexpected rate hike after the sale. 

You need to research the vehicle costs on your own first and verify them.  Don’t just go by the information you receive at the dealership. 

If you’re making a huge jump in vehicles, prepare to pay more for insurance.  If you have an older vehicle that currently is insured for liability only, and you’re upgrading to brand new vehicle with a loan on it, you’ll also be looking at higher insurance costs. 

Some lienholders also require that you carry a $500 deductible on your new vehicle, which can make a difference if you’ve had a higher deductible in the past.

Here’s the best advice we can offer!  BEFORE you purchase the vehicle, write down the year, make, model (and even VIN number if available) and call SAV-ON Insurance at 888-867-2866.  We’ll go into your current policy and put in the vehicle you're interested in to give you an EXACT cost.  If you’re trading in another car, we’ll remove that one, too.

We won’t officially make the change until you confirm it, but this will take away any surprises.  You’ll know exactly what your pro-rated premium will be and can make an informed decision on if that vehicle is the right choice for you.  If you’re comparing several, feel free to call with them all! 

That’s the benefit of having a local insurance agency like SAV-ON!

Is 'Liability Only' a Bad Idea?

Most people think there are only two kinds of auto insurance – full coverage and liability only. But, there's more to it than that.

Full coverage typically means that someone has liability PLUS collision and comprehensive coverage.  That means that they are covered if they cause damage to someone else (liability), if their vehicle is damaged in an accident they cause (collision) and for things like hail damage (comprehensive). 

“Liability only” is the bare bones option that ONLY covers damage that you cause to another person.  It means that there is NO coverage for your vehicle included.  Why would someone want that? It depends on your financial situation and your car's value.

Mandatory Coverage  

Liability coverage is what is required by the state in order to operate a vehicle.  You don't have a choice on that.

Without it, you can get a ticket or even lose your license. This protects others from getting in a collision with someone and not being able to collect for damages.

However, collision and comprehensive are only required if you have a lienholder that requires them.  Most lienholders do require it, but if your vehicle is paid off then it is up to you to cover the vehicle or not.

Here are things to consider before choosing to carry liability only:

How much money do you have in savings?  If your car was totaled tomorrow, would you have enough to purchase a vehicle to replace it?  If you only have enough for a down payment, could you financially handle car payments?

How much is your car worth?  If the car is worth $10,000, then you would be more likely to want to insure that value.  If it’s worth only $1,000 or less, you might feel it’s a risk you’re willing to take.

The key here is to think about what would benefit you the most.  Look at the insurance cost of liability only or full coverage.  (We can run this comparison for you.)  Personal finance expert Dave Ramsey says “It may save you a little money to drop collision insurance on your car, but it usually isn’t worth the risk.”

Call SAV-ON today at 888-867-2866 for a quote to look at what coverage is right for you!