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Do I Still Need to Get Used Car Insurance?


American drivers on a budget often choose to buy used cars to save on money. In fact, there is a thriving market that caters to budget-oriented motorists. Car dealers and used car shops have sprouted all over the U.S., giving second-hand cars new leases on their lives. These dealers have also allowed first time car owners to experience how it is to select the vehicles that fit their needs and financial abilities.

Of course, having a car, whether it is new or used, entails specific responsibilities on the side of the car owner. For instance, 48 of the 50 states require motorists to have some form of insurance. The state of Wisconsin is set to be the 49th state with New Hampshire finally warming up to the idea of mandated auto insurance. Insurance laws vary in the different states. Some place emphasis on complete and comprehensive coverage while others simply impose minimum coverage and leave the option of purchasing additional protection to the policyholders. For all states, however, used car insurance is a must.

Owners of used cars can actually save money from insurance. Unlike new vehicles, used cars often value less. Insurance providers determine rates based on several factors. One of these factors is the car’s perceived value. Basically, vehicles that have a higher price tag are often more expensive to insure. The availability and prices of replacement parts also affects how insurance rates will be computed. Car parts that are harder to find will eventually mean higher premiums. Specialized repair services can also mean more expensive used car insurance.

So basically, since used cars are often valued at lower prices, they can automatically get more affordable insurance rates. Having a second hand vehicle can also have insurance benefits. Experts would often recommend used car owners to drop collision and comprehensive coverage. They contend that motorists are better off paying for minor repairs from their own money. Having comprehensive protection would only add to the cost of insurance. In most cases, it is often cheaper for a policyholder to pay for repairs or replacement parts on their own instead of buying more costly used car insurance.

Another important aspect often overlooked by car owners is their credit histories and records. Some states allow car insurance companies to consider their policyholders’ credit records when determining rates. The car owners’ financial capabilities are sometimes taken into consideration. Their credit records would often give insurers an idea how responsible they would be and how used car insurance rates would be determined.