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Be Smart About Car Insurance
Posted By Christine Bilger On May 23, 2012 @ 3:40 pm In Homeowners Tips,Mortgage Rates,Personal Finance,Saving,Smart Shopper | No Comments
I recently traded in my hunk-of-junk car for a brand-spanking-new 2012 Ford Fusion, and it is B-E-A-U-T-I-F-U-L. My 1999 clunker was more stress than it was worth. Not long ago, I spent close to $700 in engine repairs, and the day after I got my car back from the shop, my engine was stalling. When it finally started properly, it shook so hard I felt like I was racing in NASCAR. I discovered there was a leak in an engine hose that would cost an additional $200 to replace – that was the LAST STRAW.
Let’s look on the bright side. Now I get to drive something with great gas mileage (about 32 mpg) on my daily commute to Detroit. It even has heated leather seats, a rear back-up camera, and bunches of other fun stuff.
Not to be a Debbie Downer, but the downside to all of this is that I’m paying significantly more for car insurance.
I’m only 21, so even though I have a good driving record, my insurance prices are bound to be a little bit high. The first time I purchased car insurance, I was overwhelmed with all the options. If you’re shopping online, most companies offer “customizable” insurance. This can be a complete disaster if you don’t know what you’re doing. Stupidly, I decided to put collision and comprehensive coverage on my clunker. At one point, I was paying nearly $300 a month just for my car insurance, and if anything ever happened, I’d still have to swallow the $1000 deductible that I chose to get my rates down.
As I slowly watched my savings account swirl down the drain, I realized it was pointless to have all that insurance on such an old car. I was paying more than the car was worth because I didn’t understand my coverage. How much was my car worth? When I finally traded in that nightmare of a vehicle, the dealership gave me a total of $300 for it. Wow, don’t be too generous, guys.
I learned my lesson the hard way after wasting tons of money on pricey insurance, so I don’t want you to make the same mistake. Here are some life lessons from a former insurance sucker:
The most important thing to know is that shopping around can save you tons of money on car insurance. Look beyond the big brand-name companies you see on TV, and make some phone calls before deciding on a car and/or insurance provider. Don’t feel like you have to buy certain coverage just because someone tells you to. Good luck, and drive safe!
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