Auto Insurance for Used Cars

For people who live and work in large centres, public transportation such as busses or taxi cabs are available options to commute to work and back. Those who reside in smaller cities or towns don’t always have that choice. They will more than likely be required to drive to work. Especially in today’s economy, it may not be feasible to purchase a brand new vehicle. Some people don’t have the money for a down payment at their disposal, and many cannot afford to be locked in for years paying a monthly car payment with high interest rates tacked on. Their other option is to purchase a used vehicle. This is considerably cheaper.

There are a few things to keep in mind when it comes to insuring a used vehicle. From the moment a vehicle is purchased it depreciates in value and continues to do so every year. If you obtain a used vehicle, the value has already depreciated substantially. If you are involved in an automobile accident in a used vehicle, the insurance company will determine if the repair costs are more than the value of the vehicle. If they deem this to be the case, they will consider your automobile to be a total loss and will only pay you what the actual cash value of the vehicle is at the time of the loss. This can amount to a very low cash settlement.

Because of this reason, you need to determine what insurance coverages are more beneficial and feasible to add on. Liability is always a mandatory coverage. This will protect a driver against any damages or injuries that result from an accident that is determined to be their fault. Bodily injury will cover any injuries sustained in a collision, and property damage will cover any damages to another party’s vehicle. If your used vehicle is worth less than $2000, then you are better off just purchasing liability insurance. Liability limits are the same regardless of whether you driver a new or used vehicle. Either one has the potential to cause the same amount of injuries or damages.

Another coverage which is not always mandatory, but is certainly highly recommended, is uninsured/underinsured motorist coverage. There is a percentage of motorists who choose to not put adequate liability coverage on their vehicle and some just flat out neglect to purchase insurance at all. If you happen to be involved in an accident with one of these drivers, this coverage will protect you against any financial losses you may be subject to.

If your automobile is used, but still worth more than $2000, you can consider adding on additional optional insurance coverages. Collision covers any damages to your vehicle should you hit another vehicle or object. Comprehensive will protect you from financial losses incurred as a result of fire, theft, vandalism, hit and run, and animal collisions. Each of these coverages involves a deductible, which is the amount you are required to pay out of pocket before your insurance company will pay for damages. If you have a small claim, you may want to consider not claiming through your insurance company and just pay for the damages yourself. If you increase the amount of your deductible, your rates will be reduced, but you should keep in mind that the deductible chosen must be feasible for you to pay. It won’t benefit you if you choose a higher deductible to lower your rates and then find that you can’t afford to pay it.

Glass coverage is also something that should be considered when insuring a used car. Glass is usually covered under comprehensive insurance. If you desire to have all of your windows covered for any type of damage, then the premiums will be substantially higher. You can opt for limited glass coverage which will still cover your windows in certain situations but not in others. If you are involved in an accident or an animal collision, you will be able to have your glass damage repaired. However, in the case of vandalism or rock chips, there may be limitations and conditions that will determine if the damage will be insured. By adding this endorsement onto your policy, your premiums will be reduced.

You will still be responsible for paying the deductible, so you should compare the deductible and the extra cost of insurance to the expense of paying for a new windshield yourself. For a basic windshield, you would more likely be better of just buying it yourself.

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