In the midst of these tough economic times, we find ourselves trying to save a few bucks by any means possible, from switching off brand name english muffins to seeking more affordable car insurance. We obviously do not want to threaten our safety or that of those around us but one option may be to drop your collision coverage and establish a more affordable car insurance premium.
First of all, what exactly is collision coverage? Most basically stated, collision coverage covers damages to your vehicle when it strikes or is struck by another vehicle or object. So depending on several factors, which we will examine, this less affordable car insurance may not be necessary for you.
Do you drive an older model car? If so, collision coverage may be altogether unnecessary. Most car insurance policies that include collision coverage are made more affordable if the purchaser is willing to pay a higher deductible. If, for example, your deductible is $1,000 (what you will pay out of pocket before insurance kicks in) but the total value of your car is only estimated at say $2,500, that $1,000 may have been better saved or spent toward something more useful, like a new car! A hypothetical deductible payment factored into heightened monthly premiums for collision may add up to more than you think, so do the math and make an educated decision as to whether you would be better served with more affordable car insurance.
Do you have more than one car in your family? If you and your partner both use cars on a daily basis, consider dropping collision coverage on one of them and getting more affordable car insurance. It is likely that one of you drives more often or in a more heavily trafficked area. It is probably wise to maintain collision on the newer, more frequently used, or “in heavy traffic” vehicle. But if you are only using one of your cars sparingly, say to run to the country store or post office, collision may not be as necessary and as a result, you can achieve more affordable car insurance on at least one of your vehicles.
Do you live in an urban area? If so, consider dropping collision and getting a metro pass! Affordable car insurance policies for urban residents are harder to come by because these areas are more heavily trafficked and the likelihood of accidents, theft and fraud are inherently higher. If you park on the street or use your car daily, it is advisable to maintain collision, but if your car is more of the weekend-get-away-type, and is safely parked in a garage, collision may be an unnecessary expense preventing you from securing more affordable car insurance. You may even find yourself saving on gas and burning a few pounds by walking in the process!
Do you own or lease your vehicle? If you are a leaser, or if you still owe significantly on a loan, this is a moot point; you will likely be required to maintain collision coverage so your preferred car dealership or loan office does not get stuck with a weighty repair bill! But concentrating on owning your car outright as soon as possible, even if this means stepping up your monthly payments now, is very beneficial in that you will have the ability to determine how affordable car insurance will be for you in the future. The economic freedoms of full ownership may seem a bit elusive at first, but rest assured that this is a wise coarse of action toward saving in the long run via more affordable car insurance.