If you have financed your car then automatically you have to pay for both comprehensive and collision insurance.In other words, this insurance is for damages that are beyond your control.Ĭollision insurance covers any damages caused by a direct collision with another vehicle or object.
This includes damages caused by a tornado, flood, fire, a running deer, riots, vehicle theft or theft of any part, falling objects, etc. If not, you should look for extra protection plans.ĭecide Whether to Buy Comprehensive Insurance or Collision insuranceĬomprehensive insurance covers the damage to your car caused other than the collision. Use the 30% rule – If your liability coverage offers coverage up to 30% of the original cost of the car, then it’s worth taking it.This insurance policy has a limit so if the cost exceeds this coverage then the insurance company will not pay for your damage.In many countries, it is mandatory to have third-party liability coverage. This is the same for both used and new cars. It also includes the damage to others, property damages, loss of life. Choose Liability Coverage –Īs the name suggests, liability coverage is for the liability of your car. The agent will tell you about the coverage scope, and you can opt for additional insurance coverage.
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PRO TIP – While inquiring about car insurance always ask your agent “What not is included in coverage?”. In this case, contact your lender and see what additional coverage benefits they are providing. You need to pay for the additional coverage rates if you finance or lease a car from a financial institute. If you fully own a vehicle, you have the choice of whether to buy just liability insurance or buy additional coverage for the protection of your car. For purchasing a used car you either pay it fully or finance it from a bank or a used car dealership. Ownership – The first thing to determine the cost of insuring your car is your ownership status.
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How to estimate the cost of insuring your car? In this blog, I will highlight key aspects that you should consider before purchasing insurance coverage for a used car. The car model’s reputation and its history also have a direct impact on the insurance rates. However, the insurance rates you pay on used cars are lower than new ones because the market valuation of used cars is less. Insurance is the essential liability that is worth purchasing otherwise you will be punished legally for not getting one. The car insurance process is the same for both used and new cars but there is a slight difference in rates. In order to get all the safety coverage for your car and yourself you still need car insurance. Buying a used car will save you a lot of money as the price is almost 50% less than a new car.