Buying a vehicle is one of the most prominent decisions we make in our lives-it is similarly coupled with purchasing a house, except that most people will only buy one to three houses in their lifetime and more than seven vehicles.
Finding the right car is all about research, but what many car buyers forget about is the insurance. Most people sit down and look at their bud get to decide how much they can afford to pay for a vehicle, and then find a vehicle in that price range. What about insurance costs? They need to be added into your budgeting factor when you decide to purchase a vehicle.
Insurance is generally overlooked, although it is a monthly payment that you must endure for the time that you own your vehicle. Of course, you can paythe premium for an entire year”s worth of insurance outright as well, but that in and of itself is another expense, and one that can not be financed, except in monthly payments through the insurance company or brokerage.
The price of insurance varies widely and is based on a number of factors The type of insurance you want on your
vehicle, the make, model, year, number of miles and even the color of the car can come into play in determining the cost of insurance. The driver of the vehicle is also closely scrutinized, particularly their driving record and credit history. Collisions and speeding tickets, as well as other moving violation tickets issued by the police or court will impact the price you pay for insurance on your vehicle.
In all incidences of insurance needs, you are required to have property damage (PD) and personal liability (PL). Optional insurance is collision, comprehensive, glass and loss of use. In general, personal liability is taken for $1 million in the event that you are involved in a motor vehicle collision in which people are hurt or killed. Property damage insurance pays for the damage to another person”s property, such as a fence or home, which was done by your car.
Comprehensive insurance protects you from financial loss due to an act of nature, such as a tornado or hitting a deer on the highway. In most cases, comprehensive also covers the theft of your vehicle.
Glass coverage protects the glass on your vehicle and can be limited in some cases. In most cases, your side and rear windows are covered, while your windshield will cost you a little extra. This is simply due to the fact that windshields have a tend ency to need to be replaced more often due to rock chips and cracks from weather.
Collision insurance covers you from financial loss due to a collision with another motor vehicle that is your fault. If you are in a collision and you have collision insurance, your car as well as the other party”s car and the replacement or repair costs will be covered by your insurance. In many cases, collision insurance is quite pricey and not worth the trouble for an older vehicle. The best way to decide if you need collision insurance is if the value of your car is more than $1,000 over the cost of the collision insurance for one year.
Some insurance companies also offer loss of use insurance. If you are in a collision or other mishap where you lose the use of your vehicle, you are covered to a certain limit to have a rental vehicle which will be paid for by your insurance company.
Don”t forget about the deductible. When you file an insurance claim, you will have to pay the deductible out of pocket for the service you file against. For example, if you are in a collision and need your car fixed, you will be required to pay the deductible set in your insurance policy.