Obtaining a good car insurance rate with bad credit

The increase in a cost of car insurance is one of the financial hardships that come if you have a poor credit score.

According to the statics, the premiums tend to rise because a driver with poor credit is 40% more likely to file claims as compared to drivers with good credit. To determine the insurance rates credit is not the only factor.

While you rebuilt your credit the insurance cost can be kept down by taking several steps to address the issue.


Shopping Around

Every insurance company calculates your credit score in a different way as compared to other factors but charges more for the drivers having bad credit. If you have a bad credit, then some insurers may increase your premiums by 50% while other insurers will increase it to 20% which is tolerable.

Select the policy where your bad credit won’t affect it much and get the quotes from as many insurers as possible. By shopping around take the advantage between the companies.

It is much easier to shop around by comparing policies online as multiple insurance companies offer the quotes on a one phone call.


Check for a discounts

The increased cost of your premiums that comes due the bad credit can be lowered if you qualify for discounts. It is better to spend the money for one time on driving classes as it will help to save you on premiums because some insurers will offer discounts for the drivers who take safety courses.

Safe driver discount, multi-policy discounts, good student discount and low mileage discounts are the other common types of offers included. Get prepared to switch insurers so that you will qualify for more and try to get qualify for many discounts by using your available options.

car insurance for bad credit

Try getting a different car

The accident of each make and model of the car is one of the biggest factors in determining the insurance rates. In short, the cars that have been in very few accidents cost less to the insurer than those that have been in more accidents.

It will cost less to insure if the cars have certain optional safety features. To spend less down the road consider paying more up front and also take the cost of insurance into account if you plan on buying a new car. Always remember that you will need to pay a higher rate on your car loan or pay the cash for the car.


Increase deductible

Before your insurer steps in, the deductible is the amount of money you are responsible for in case you need to file a claim. You can always opt to increase the deductible due to which the risk of an insurance company will be reduced and it will also lower your monthly premiums.

If just in case you have to pay the higher deductible then make sure to keep aside some of your money you save on premiums.


Change your coverage

It is not financially good to have more than a basic insurance policy for the very older cars. Try to put some money away to pay for repairs or purchasing a new car in case of an accident and also prefer to drop comprehensive and collision coverage, if the book value of your car is less than the total cost of your premium and deductible.

Consider downgrading to cheaper car insurance if you drive the vehicle only for part of the year or if you have an unused vehicle but if you decide to drive the car again and then you must again buy the basic coverage plan.


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