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The New Auto Insurance Conspiracy Theory

When you signed on the dotted line for your new auto, it seemed

like you were on top of the world. You went shopping at the

right time, and felt like you got a steal on the price. And

then, the insurance bill came in the mail and the bottom on your

perfect little world dropped out. What happened?

People buying a new auto for the first time may not realize

this, but the bank will require them to keep full coverage on

their car for the length of the loan. Now, you can get away with

only liability coverage when you don't finance a car - but

things work a lot differently when the banks get involved, don't

they? You might even think that there is some sort of conspiracy

going on involving the banks and insurance companies. While it

is a good theory, the truth is that banks need to be sure that

they will get their money, so they require full coverage

insurance on a new auto. After all, who would continue making

payments if the car were all smashed up because of an accident?

But why are these rates so high?

A lot of factors are involved in determining insurance rates on

a new auto. The age of the driver, his driving record, the

number of accidents on his record, and even where he lives - all

these are factored into the rate. Because the costs of repairing

a new auto are so high, insurance companies have to charge steep

rates to recover their losses in the event of a wreck.

Isn't there anything I can do to lower these rates?

Auto insurance on newer vehicles will be steep, but there are

things you can do to get lower rates. One of the best ways to

save money is to shop around. While all insurance companies use

statistics to set their rates, they do not all interpret these

statistics the same way. Never, ever insure your new auto with

the first company you call!

You can also raise the deductible you will pay in the event that

you wreck your new auto, and in return receive lower rates. The

higher the deductible, the lower the auto insurance premiums for

your new car will be.

Come on, what else can I do? These rates are killing me!

All right, let's start with the obvious: Slow down. Don't drive

your new auto like some Nascar speed demon! Tickets and moving

infractions will definitely increase the rates for your new auto

insurance. You can also try driving less, because insurance

companies consider it to be less of a risk when people drive

fewer miles with their new auto. Plus, this may increase your

resale value down the road, when it is time to buy another new

auto.

Insurance rates on a new auto, or an old one, are greatly

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affected by where you live. If the rates truly bother you,

consider moving to some less populated area with a low crime

rate. Buy an alarm for you new auto, and be sure to keep it in a

garage when you sleep at night.

Is that it?

Well, there's no guarantee that the insurance rates on your new

auto will ever be great, but you can also try improving your

credit score. Insurance companies see a correlation between

credit score and driving habits, so they tend to give better

rates to people with better credit. But in the end, insurance

for your new auto will be significantly higher than the

liability coverage you had when you were driving that "beater"

that got you through college. Hey, that's just part of the price

you pay for driving a new auto. There are definitely ways to

improve those rates, but you'll need to get used to the fact

that the good old days of "liability only" coverage are behind

you.

About the author:

Albert Medinas has developed and maintains the website New Auto Junction,

which answers the most common questions people have about

purchasing a New Auto. Please visit us at

http://www.newautojunction.com today.