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How do I get insurance when buying a used car?

Here's what you should know...
  • In most states, you are required to carry auto insurance whether you own a new or used car
  • The value of the used car you purchase will affect the auto insurance premium you pay and how much coverage you may need
  • If you are planning to finance your used car, then you should request an auto insurance quote before purchasing the car so you can have a better idea of what your totally monthly payment would be
  • Rather than just speaking to one insurance agent, you should consider calling multiple companies or using an auto insurance broker to make sure that you are getting the best rate
  • In addition to getting a good rate on your premium, you should make sure that the insurance company has a good track record for handling claims and is in good standing with the insurance department of your state

The process of getting auto insurance for a used car is almost the same as insuring a new vehicle. The major differences you should be aware of are the types of coverages that you should consider and paying close attention to the actual value of your vehicle. Before you purchase a used car, it is a good idea to get several quotes for auto insurance rates because the type of vehicle you buy can affect your insurance rate.

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Deciding What Coverage You Need for a Used Car

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Before you shop around for auto insurance quotes for a used car, you should have a general idea of the types of coverage that you will need. The amount of coverage you decide on will affect the rate that you will pay.

In addition to the minimum liability coverage that is required by your state, you should also find out whether the car dealer or lender will require you to purchase additional coverage. Collision and comprehensive coverage help to cover damage sustained by your vehicle in the event that you are responsible for a car accident or your car is stolen or vandalized.

Even if additional coverage is not required by your lender or the car dealership, you may decide that having extra coverage is a good idea for you. If you are purchasing an older car that is less than $1,000, then collision and/or comprehensive coverage may not make sense for you based on the low value of the car.

Gap insurance may also be something you want to consider. Generally, gap insurance covers the difference between what your comprehensive and/or collision coverage would pay for the loss of your car and what you still owe on your car loan. Gap insurance is a good idea if you have a car that depreciates in value very quickly. It may also be required by your lender or car dealership.

Requesting a Quote for Auto Insurance for a Used Car

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You will need to have certain information available for the insurance agent you are requesting a car insurance quote or applying for coverage. Your driver’s license will have all of your relevant contact information, and you will also need to provide a phone number.

Along with your driver’s license, you will need to provide information about your vehicle, such as the vehicle registration number (VIN), license plate number and vehicle registration. You should be prepared to offer your Social Security number as well.

The insurance agent will use this information to determine the premium you will pay for the policy. You should make sure to keep a copy of the policy information in your records along with carrying proof of insurance whenever you drive.

Questions You Should Ask When Buying Auto Insurance for a Used Car

As you shop around for car insurance quotes for a used car, you should ask the insurance agency for a breakdown of exactly what is covered under your policy. You should also be sure to read the policy agreement very carefully so that there are not any surprises about what you would have to cover out of pocket if you need to file a claim.

Inquire as much as you can about discounts that may be available to you when shopping for car insurance. This could include lower rates for having a good driving record or credit score as well as other discounts for having safety features in your car or purchasing certain kinds of vehicles. Certain occupations qualify for discounts on rates along with group discounts available through employers or professional associations.

If you already have auto insurance through an insurance company, you may be able to get a lower rate by adding the additional used car to your existing policy. In general, there are discounts offered for combining other policies with the same insurance company, such as renter’s or homeowner’s insurance, boat insurance or life insurance.

Understanding What Affects Your Insurance Premium for a Used Car

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There are many factors besides your driving record that insurers consider when determining what rate you will pay for auto insurance on a used car. The way auto insurance rates are determined is different for every auto insurance company.

For example, if you live in an area with a high crime rate, your insurance rates may be higher. You may also have higher rates if you have a poor credit history because insurance companies consider you at a higher risk of filing a claim under your insurance policy. Your age and driving experience can also come into play in determining your auto insurance premium. If you are a student, having good grades can help you qualify for a good student discount as well.

Lowering the Cost of Your Auto Insurance for a Used Car

One of the ways to lower the premium for your auto insurance on a used car is to choose to pay a higher deductible. With a higher deductible, you will have to pay a greater amount out of your own pocket before the insurance company will cover your claim, but your monthly or annual premium will be lower.

The process of requesting a quote for auto insurance on a used vehicle is not time-consuming, but you should do your homework to make sure you are getting the best rate and have the appropriate coverage.

If you have an existing auto insurance policy, that is a good place to start to add a used vehicle to your policy. Be sure to ask the insurance agent about what discounts you are eligible for and how you can reduce your auto insurance premium.

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