Good driving records and no claims aren’t the only things that affect premiums. Lately, underwriters place a lot more importance on applicants’ credit score and can offer as much as 20% cheaper prices when it is good. It would be a shame to miss such discounts but motorists can still get affordable automobile insurance rates when the current financial difficulties they face is a stumbling block.
If people cannot keep up with payments due to not having regular jobs or other reasons their money situation will deteriorate and it may affect premiums a lot or not at all depending on which state you live and who is the carrier. This is a bigger concern than most people may think. Fortunately, there are ways to make sure motorists can still get the lowest prices available in such circumstances.
Here are a few tips to help motorists get the cheapest auto insurance for bad credit history;
1. Premium differences between drivers with good and poor scores can be as much as 20% with some companies. The trick is to avoid those carriers that place high value on insurance scoring and go for the ones that don’t care much about it. Even though most companies look at it, you will see large price differences with only some of them. Shopping around extensively is the best option to find the one that will offer you the most competitive vehicle insurance with bad credit history.
For example, motorists with good driving history and no claims are still very favored by most companies and some of them still care more about these details. So, you should try to find one of those companies if you have a good driving record.
2. There are some carriers who don’t check it and few states -California, Hawaii and Massachusetts- don’t allow it to be used in premium calculations. However, about 90% of car insurers look at this information when they calculate premiums. There aren’t really companies who advertise for not looking at the financial position of applicants.
If there are, there is a high chance they are already in the non-standard market and rates are usually much higher in comparison to high street brands. By all means get quotes from them but make sure to get alternative quotes from usual names as well. You can find the best car insurance with poor credit score but remember that it may not be quick or easy.
3. If you are lucky the current insurer may not check it for several years and still offer good renewal terms. They don’t necessarily check the rating of existing customers every year. However, it is a slim chance and most companies you apply for a quote would check your credit score. If the renewal quote comes higher than expected, you should definitely get a few quotes from other companies and switch if you can save enough money.
4. If you are expecting a big change in your financial position shortly you may want to buy an annual vehicle insurance policy instead of a six monthly one. This way, current low rates are safe for another year before you will have to accept higher premiums. Most providers offer attractive payment plans to help you out with larger premium payments.
But you should make sure that you don’t miss installments. They are getting tougher on missed instalments and you may be back on the market looking for coverage. They will cancel policies and will probably demand full payment to reinstate.
5. Improving or maintaining a good financial standing is still possible. Motorists should remember that the record isn’t only made up of payments and current borrowing. It may not be as hard as it may sound as many other details go into a report and affect the score. For example, avoiding to move too many times may help you keep it healthy even though you are having financial problems. So, you can still get cheap automobile insurance with bad credit. You need to try not to let it slip further down.
One of the most effective ways of maintaining or improving credit score and vehicle insurance rates is to talk to lenders and utility providers and come to some sort of agreement on a payment plan before they go ahead and report you to agencies who prepare the reports. Being proactive is better than letting things take their own direction and causing serious problems in the future. Most companies are happy to make it easier for customers to pay bills.
Starting to cut some of the expenses as soon as you realize there are problems ahead can relieve the pressure on your wallet too. If you can get around twenty percent savings, it is worth putting the effort into maintaining it. In addition, you can get cheaper automobile loans and mortgages as well when you prove that you can handle money well.
You can find the most affordable car insurance with poor credit for now and concentrate efforts on fixing issues. It is something you have to face sooner or later because life can be harder when your financial history works against you.
Also, you should avoid trying to find quick and temporary solutions. Many people get into deeper troubles when they are impatient and looking for miracles overnight. Things like payday loans may look to solve the cash problems for now. But it can be very hard to get out of it once you keep getting another loan to pay for the one outstanding.