Why Car Insurance Quotes Go Down When You Pay Off Your Vehicle
Paying off a car loan can be a tremendous feeling. You're no longer on the hook for monthly payments, and you can finally say that you own your vehicle. What's more, many car insurance customers are surprised to discover that their rates can change due to a paid off car, and for most of these customers, car insurance price actually lowers (although some insurance companies actually charge more, or don't change their rates at all). Understanding the factors that come into play after a car is paid off can help you find affordable car insurance that adequately protects your vehicle.
Many drivers pay less for car insurance when owning a vehicle because some of the required coverage that comes with a car loan, such as comprehensive coverage, can be dropped after a vehicle is paid off, since they're not legally required. However, if you're close to paying off your loan or if you've finished paying for your vehicle, be sure not to cut too much coverage. Comprehensive coverage in particular can be a vital form of insurance coverage, as it protects your vehicle from theft, damage in an accident, environmental damage, and more. Even though it's not necessary, it can be important coverage to keep. All drivers should consider keeping the extra coverage that they'd had when their vehicle was under a loan, as the alternative could mean getting a brand new car loan after a serious accident.
Some car insurance companies actually offer discounts for drivers who own their vehicles, as statistics have indicated that drivers are safer when driving a vehicle that they own. There are also statistics that indicate the opposite, and so there's no general rule as to whether paying off a loan will necessarily affect your car insurance price in one way or another.
Regardless of whether you've paid for your vehicle, the best way to get affordable car insurance is to look for a car insurance quote online. Compare several quotes, and try to find the best possible option for your vehicle and your driving habits; consider what types of coverage you need, and then use price comparison websites to find the best car insurance quote online. Comparison shopping is the best way to limit your costs without sacrificing coverage, and if you've recently paid off your vehicle, it's important to keep it well protected. It's always better to have more insurance than you need than to have less than you need, particularly when you're driving a car that you own, and you can certainly keep appropriate coverage while still getting a great rate. It's worthwhile to ask questions and find out how paying off your car will do for your coverage.
