Posts Tagged ‘credit history’

There are things that you can save on by saving yourself from making the purchase.  However, there are things that you have to pay for, whether you like it or not.  One of these things is the insurance for your car.  It is not possible to renew your car’s registration if you do not have auto insurance.

You have to take note though, that even if you have to purchase auto insurance, you don’t have to get them at a premium price.  In fact, there are ways by which you can save on auto insurance without doing much bargaining with the insurance broker.

*  Keep your credit report clean.

Every business loves a customer with a good credit history.  If you have been dutiful in paying your obligations to your previous creditors, insurance companies will also assume that you will also be a good customer with them.  Thus, they will try to give you the best offers just to get your business.

*  Stay away from accidents.

Your driving record is also a basis on the cost that you will have to pay for your auto insurance.  If you would like to save on your auto insurance, be a good driver.  If your driving history shows that you have been involved in an accident, your auto insurance company will see that as having an added risk.  A delinquent driving record increases the possibility that you will be involved in a future accident.

*  As much as possible, try not to claim against your auto insurance.

When accidents happen, whether it is your fault or the other party’s, try your best not to have the insurance company pay for the damages.  Your next insurance company might see it as an added risk if you have made claims against your previous insurance.  Thus, your next auto insurance premiums will be higher.

*  Stick with your former insurance provider.

If you have been a good payer and if you have never filed any insurance claim, your insurance company will want to keep you as their customer.  You will be able to save money on your insurance premiums because they will offer you the lowest rates possible just to keep you from moving to another insurance company.

These are the simplest ways on how you can save on your auto insurance.  They don’t require much effort on your part, yet they can save you money that you can use to pay your other bills.

Writer: MCUERDO

You have just settled a car loan for a $20,000 car with a down payment of $4,000. You happily drive off, confident with the auto insurance company you’re with that they will take care of everything in case something comes up, be it theft or wreckage.

But did you know that your car’s value has just depreciated by 20 percent the moment you went home in it? And although your auto insurance will pay you the actual cash value of your car, you have to consider that it will not be enough to cover the remainder of what you owe on your loan. Remember, the car’s value has already started to depreciate when you first left with it, and your lender will always hold you responsible for paying the whole remaining amount of your loan. So what happens to the difference of the actual cash value of your car and the amount left in your loan? This could mean trouble for you and leaves you scrambling to look for money to cover that amount, which could turn out to be hundreds of dollars, even thousands, and eventually may even affect your good credit history.

This is where Gap insurance comes in. Gap is so called because it is the difference between the amount left on your loan and the actual cash value of your car. It is important then for you to have it insured as well and not only your car. Your having paid the down payment of $4,000 on the $20,000 car loan makes you an ideal candidate for Gap insurance. The following example illustrates the importance of Gap insurance:

The car is worth $20,000.  Having paid $4,000 as its down payment, your loan balance is $16,000.  A year later, the car is totaled.  Your auto insurance company decides to pay for $13,000 as settlement, which is of course $3,000 short of the balance of your loan. Plus, with a deductible of $500, a final $12,500 settlement is reached. Gap insurance then pays $3,500. (However, certain terms may apply, like your financed loan amount must not exceed or at least be equal to $100,000 or the loan term is not more than eighty-four months, etc.)

See how you can rest easy with Gap insurance? For you then to have peace of mind with regard to one of your necessities in life, auto insurance must come with Gap insurance.