No, full coverage car insurance is not cheaper if you own your car. Premiums for the types of insurance that make up a full coverage policy, like collision insurance and comprehensive coverage, are based on your vehicle’s actual cash value, regardless of whether you own the car.
Ways to Get Cheaper Full Coverage Insurance
Take advantage of every discount. Most insurers offer discounts for things like paying your policy in full up front or having safety features on your car.
Look into telematics programs. If you have a good driving record, you may want to consider using a telematics program to get lower premiums. Telematics programs track your driving habits and give you discounts for being a safe driver.
Shop around. Full coverage costs an average of $1,997 per year, but every insurance company determines their rates differently. By shopping around and comparing quotes from several companies, you can find the best deal for you.
Full coverage is not required on a vehicle that doesn’t have a lease or loan. In fact, it may not even be worth the price if you could afford to repair or replace your car after an accident without the extra coverage. A good rule to follow is if the cost of your annual premiums is getting close to your vehicle’s value, it’s probably time to consider dropping full coverage.
Yes, your insurance may be cheaper if you own the car, however simply owning a car does not carry with it an automatic discount on your premium. The reason car insurance is more expensive on a financed car is because lenders will usually require you to purchase additional coverage on a car that has not yet been paid off.
No, you do not need full coverage on a paid off car. Full coverage car insurance is only necessary when a car is not paid off yet and the lender requires full coverage, as there isn’t a legal requirement to carry full coverage anywhere in the United States. Insured drivers always have the option to add full coverage to their paid off car if they want to, though, and it can be a good idea.
You should drop full coverage insurance on your car when the cost of the insurance equals or exceeds the potential payout, should a covered event occur. You may also want to drop full coverage if you are willing to pay for repairs out of pocket, or if you would prefer to replace your vehicle if it’s damaged.
For example, an older car with high mileage may not be worth costly repairs, and you might want...
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