Will my car insurance premium go down in price when i pay off my car?
October 25th, 2009 by admin
I’m not sure if it’s even a factor in the price of auto insurance premium but I’m getting close to paying off my car and would like to know. Thanks!
I’m in California…
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only if you drop some coverage like to libilty
When you have a loan, they require Comprehensive and Collision coverage.
When you pay the loan off, then you can remove those coverages and that will affect your rate.
You can get rid of full coverage insurance and go to liability only. This then covers the vehicle if you are hit. But if you cause the accident, they don’t cover it.
I just paid off my 2000 Blazer with 151k miles. I lowered my insurance to liability only. Saving myself some $90 a month. Being a truck if I cause an accident I won’t get much damage unless its freeway speed or such. And being that I don’t drive like a nut, I am not too worried.
Plus I saw it as why pay so much on an old truck. Where if I did total it out the insurance company might cut me a check for $2500. So it was not worth it to me to continue to pay the higher premium.
Nope.
Yes and No. It depends on the insurance company! Some companies offer a small credit if the vehicle is under a loan or lease. Their actuarial data shows that people who finance their car tend to drive better, because the vehicle is still somewhat new, and they don’t want to wreck their car (they can’t just go out and buy a new one with cash.)
Other companies don’t offer a credit for a lease or loan. The pricing is more favorable if the vehicle is paid for.
Call your agent or your insurance company and ask them to do a “what if” quote scenario to see how the premium would be affected if you remove the loan/lease from your policy info.
I work in insurance, not car insurance, but technically no. Paying off a car does not make you less likely to not get into an accident. The only way to lower premium, is to be a safe driver and prove it for a time: no tickets, no accidents. Next, lowering your coverage will also lower your premium. But, since you are paying off your vehicle soon, why not keep the premium you pay now? You will already be saving money. Dropping to liability will only ruin your day when you get into an accident and that car you just paid off is trashed and you must start the monthly payment process all over again. It is better to have the insurance and not need it, then need the insurance and not have it. All it takes is one bad accident to realize how little the insurance costs. Stick with your current premium because you will already be saving money when your vehicle is paid off.
No…insurance is not based on payments or financing
no, it will only change if you delete some of your coverages
Probably - yes, cause you can remove extra coverage requested by lender, and get cheaper car insurance. You can easily check how your quotes can change in internet, for example here: http://carquotes.sinfree.net