Borrowing may be the only solution for many people to have the car they want. Usually, lien holders have special insurance conditions to be followed before the money is released. They require proper protection for the vehicle and usually for the loan as well. This would mean buying Comprehensive, Collision and Gap on top of liability coverage. There is nothing wrong with arranging a decent policy for a financed vehicle but it could be expensive.
How to Reduce Insurance Premiums when Having a Car Loan?
It is common practice for many dealerships to arrange finance and coverage for customers. If this was the case and you went with a policy recommended by an agent known to the dealership it may be that they didn’t shop around enough for you. You can do a much better job on your own online when it is due for renewal. You wouldn’t normally have any problem with switching auto insurance companies as long as you keep the coverage required by the lender.
You can get alternative quotes and see if they would help in bringing costs down. So, you have an option to lower the burden a bit by getting the same coverage somewhere else. Regardless of having auto loan or not, you should often check to ensure you are not spending too much. This is especially true when rates keep going up. It is not rude to ask them why does my car insurance keep going up? And it is all right to check for better policies and cheaper prices, in any case.
Would Lender Allow to Drop Vehicle Insurance Coverage?
If you borrowed on the automobile your lien-holder’s interest has already been noted on the policy. They would be informed if you drop Collision and Comprehensive (and Gap if you have). They would want you to re-instate it. Failing to get you act, they would arrange a forced policy that would be much more expensive for you to pay. It would not be advisable to drop them without prior consent. One thing you need to appreciate is that you own the auto and any coverage you have protects your financial loss. Regardless of you still owning or losing it in an accident or theft, you will have to pay the lender in full if a claim settlement does not meet the outstanding amount.
You may try to increase the deductibles to $1,000 and see what happens if you really want to do something. There is a chance that the lenders may leave you alone and not bother with this change to the policy. If they notice, they would contact you and ask to bring it down to $500. Then, you could take up with them and show them bank statements with more than $1,000 readily available cash if you need to pay for deductibles. They may be convinced that it wouldn’t be an issue in this case.
If you have arranged it several years ago why not revisit and see where you are at the moment. If you can manage to pay it off it may be time to think about when to drop collision and comprehensive. Early settlement could save you money on interest and premium. You can always get a quote for the level you think is right and see the difference in price.
Usually, people ignore a few things when they are keen to get behind the steering wheel of a new auto and accept expensive interest rates and heavily borrowing terms. It may be time to revisit it and make adjustments. The early you deal with it the more you can save in several aspects.