Buying a used car is exciting, but remember to ensure your investment immediately. Comprehensive coverage, liability insurance, gap insurance, and a policy from a reputable company will give you security and protection for the road ahead.
How to Get the Best Insurance Deal for Your Used Car
When buying a used car, getting the right insurance is key to protecting your investment. Here are some tips to get the best deal:
1. Shop around at different companies
Compare quotes from at least three insurers to find the most affordable option that meets your needs. Ask about discounts for safe drivers, students, bundling with other policies, etc.
2. Consider only the coverage you need
You may only need liability coverage if your used car isn’t worth much. Comprehensive and collision are more expensive and only make sense if your car is financed or relatively new.
3. Raise your deductibles
The higher your deductibles, the lower your premiums will be. Make sure any deductibles you choose are affordable if you need to pay them.
4. Check your credit score
In most states, insurance companies consider your credit score when determining your premium. Check your credit report for any errors before shopping for insurance.
5. Bundle your auto with other policies
You can get a lower rate by bundling auto with home, life, renters, or other types of coverage. Bundling multiple vehicles on the same policy also provides savings.
6. Consider usage-based insurance
If you drive less than average, usage-based insurance, like Metromile and Milewise, charges you based on mileage. This can provide substantial savings for low-mileage drivers.
Shopping carefully for the right insurance and choosing only the coverage you need can help you get the best deal for your used vehicle. Review your options every few years to ensure your policy meets your needs, and you receive all the discounts you’re entitled to. With time and patience, you’ll drive your used car with the necessary coverage and price.
The Different Types of Used Car Insurance Available
There are a few types of auto insurance available for used cars. The right policy for you depends on the car’s age, mileage, and your state’s minimum coverage requirements.
Liability insurance covers damages to other vehicles and property in an accident you cause. It’s required in all states and typically the minimum needed for a used car. Liability insurance includes:
- Bodily injury liability: Covers medical bills for injuries to other drivers and passengers.
- Property damage liability: Covers repairs to other vehicles and property involved in the accident.
Collision and Comprehensive Insurance
Collision insurance covers repairs to your vehicle after an accident. Comprehensive insurance covers damage from theft, vandalism, or natural disasters. These policies have high premiums for used cars, so you’ll need to weigh the cost versus your car’s value.
If your used car is totaled in an accident shortly after you buy it, regular insurance will only pay the current market value—which may be less than you owe on your auto loan. Gap insurance covers the difference, so you’re not stuck paying for a car you can no longer drive.
Uninsured/Underinsured Motorist Coverage
This coverage protects you if an at-fault driver has insufficient insurance. It will help pay for injury treatment, repairs, and other costs up to the limits of your policy. Given the number of uninsured drivers, this extra protection is a good idea for a used car.
Your specific coverage and limits depend on your needs, location, driving record, and budget. Shop around at different insurance companies to compare quotes on various policies for your used vehicle. Make sure you have adequate protection in case the unexpected happens.
How to Find Insurance for Cars With an Existing Loan
Finding insurance for a used car, you’re purchasing that already has an existing loan can be tricky. The lender will require you to have comprehensive collision coverage to protect their financial interest in the vehicle. Here are some steps to getting the necessary coverage:
Check with the Current Insurer
The easiest option is to contact the insurance company currently covering the vehicle. Let them know you’re purchasing the car and want to take over the policy. They should be able to change the policy into your name and possibly adjust coverage levels based on your needs. However, their rates may not be the most competitive.
Shop Around at Other Companies
It’s a good idea to compare quotes from other insurers to ensure you’re getting a good deal. When getting quotes, be upfront that you need coverage to satisfy the terms of an existing auto loan. The companies will need information like the VIN, details on the loan, and coverage requirements to provide an accurate quote.
Notify the Lender
Once you’ve selected an insurance policy, immediately notify the lender that you have coverage for the vehicle. They will likely want information like the insurance company name and policy number to confirm coverage before finalizing the sale. Failure to prove proper coverage could delay your purchase, so this step is critical.
Review Policy Limits
Double-check that the coverage limits on your new policy meet the minimum requirements set by the lender. Typically, they will require at least comprehensive collision coverage with certain limits for the vehicle’s value. It’s also a good precaution to ensure liability limits are adequate in an at-fault accident. If limits are too low, the lender may not accept the policy.
Buying insurance for a vehicle with an existing loan may require a few extra steps, but doing it properly will ensure a smooth transaction and give you peace of mind that your investment is fully protected from day one. Following the guidance from your lender and insurance provider will set you up for success as the new owner of a used car.
Tips for Selling Your Car Quickly
Selling a used car privately typically means getting a better price than trading it in. However, it also requires more work on your part. Here are some tips for selling your used car quickly:
1. Price it right. Check vehicle valuation guides like Kelley Blue Book to determine a fair asking price based on your car’s make, model, year, mileage, condition, and optional features. Price it competitively based on current market value to attract serious buyers.
2. Advertise widely. Post your car on Autotrader, Craigslist, Facebook Marketplace, and other popular car-selling websites and apps. Also, put a “For Sale” sign in the window and tell friends you’re selling. The more places your ad appears, the faster it should sell.
3. Emphasize condition and service records. Provide details on any recent service or reconditioning. Mention if it has a clean title and CARFAX report. Highlighting a well-maintained vehicle with records will inspire confidence in buyers.
4. Offer test drives. Allowing potential buyers to see and drive the car in person is the most effective way to sell quickly. Meet interested buyers for test drives in a safe, public place.
5. Negotiate and close the deal. Once you receive an acceptable offer, be willing to negotiate to close the sale. Have paperwork like the vehicle title and service records on hand. Accept payment, sign over the necessary paperwork, and you’ll complete the private sale successfully.
Selling a used car on your own requires effort. Still, by pricing competitively, advertising widely, emphasizing the vehicle’s condition, offering test drives, and negotiating with serious buyers, you can minimize your time on the market and sell your car quickly for the best possible price. You’ll quickly wave goodbye to your used car with the right approach!
Now you gained valuable insight into the complex world of insuring a used vehicle. While the process can seem daunting, by researching, understanding your needs, and shopping around at multiple companies, you’ll find a policy that gives you the coverage you need at a price you can afford. Once you’ve found the right insurance and completed the necessary paperwork, you can confidently drive off the lot, knowing you and your new set of wheels are well protected. Though no one hopes for accidents or misfortune, you’ll rest easy knowing you planned.