Credit and Car Insurance

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What You Need to Know About New Car Insurance?

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Isn’t there something truly, truly awesome about a new car? There’s an infinite amount of potential the minute you slip behind the wheel and put those keys in the ignition. But with great power comes great responsibility…in this case, the responsibility to make sure you’ve got the car insurance you need.

Many drivers hesitate to spend tremendous amounts of money on insurance coverage for their new car because car insurance rates for new cars are considerably higher than those for older models with a lower resale value. But before you make a decision about your coverage based solely on how much you’re going to pay keep in mind that you’re going to be responsible for paying off your car loan right along with buying a new car.

Most states require you to carry liability insurance on your car, regardless of how much you owe on it or how long you’ve owned it. It’s sort of a pre-req to being able to take it out on the highways. Liability insurance will protect you from other drivers’ damages and expenses if you cause an accident, but it’s not going to do anything for you and your car. If you only had liability and you were in an accident you’d be left struggling to buy a new car out of pocket.

Collision insurance, on the other hand, will pick up the tab after you’ve been in an accident and pay for reparations to your car. That way you have money to pay off your car loan and/or buy a new one without breaking the bank. And your car insurance provider knows they’re not going to be left trying to wrangle money out of you without any assets to use for collateral after the fact. Can you imagine trying to collect on a debt when you don’t have anything to repossess?

Finally, let’s talk about uninsured and underinsured motorist insurance. It’s no secret that today’s economy is slipping. And if you don’t know all you have to do is look at the number of layoffs and the businesses that are going to under to find out! With budgets having to stretch farther than ever and unemployment on the rise many drivers are choosing to travel without car insurance-at all. And those that do may not have enough coverage to protect them if they’re in an accident.