Wednesday, June 10, 2009

Used Car Insurance Considerations and Discount Diving

Thanks to the current recession, previously owned vehicles are enjoying their most brisk sales in almost three decades. Edmunds.com reports that sales at independent and franchised lots totaled 65.2 percent of all sales in the automotive industry in 2008, a five percent jump over 2007. The bankruptcies of both Chrysler and General Motors will undoubtedly lead to even more previously owned purchases in 2009, as economically pressed customers also confront their concerns about warranties and long-term service availability.

The profile of the used car customer has shifted rapidly from those living month-to-month on a limited paycheck to buyers seeking to trim their budget expenses and those waiting to see how the automotive industry in the United States remakes itself. Most will be pleasantly surprised to find that they will be favorably impressed with the cost of insuring a used vehicle.

Although amounts can vary by insurer, it’s safe to assume that car insurance premiums will fall 5% to 10% for every five years over the life of an individual vehicle. While buying wisdom counsels picking a car no older than two years, studies indicate drivers are keeping their cars longer. Three years of ownership was relatively standard before the recession, but that is rapidly extending toward five, meaning the driver of a well-maintained previously owned car who has a clean driving record can anticipate an insurance break sooner. (Of course, used cars also depreciate faster in the event of a claim, the downside of the equation.)

Regardless of the age of the vehicle, however, all drivers can go discount diving in these tough times. While it’s common knowledge that insurers reward drivers for such things as passive restraints or anti-theft systems, consumers can also pursue lesser known discounts:

  • Education. Risk profiles for individuals with degrees in science, math, and engineering are lower and can garner discounts of 10 to 30 percent.


  • Occupation. Teachers and farmers hold the lowest risk profiles by occupation. Education discounts of 10 to 30 percent are common, but for farmers? It can’t hurt to ask and to back up the request with research findings (readily available online through a search engine.)


  • Military Service. GEICO and other insurers give active and retired military personnel discounts of 2 to 15 percent. Almost all companies will lower premiums for military personnel on active deployment who are storing their vehicle.


  • Age. Companies like Hartford that have a AARP Auto Insurance Program offer aggressive discounts of as much as 45 percent for retired individuals.


  • Driver's Training. Defensive driving courses and other driver’s safety programs are no longer just used to erase the bad effects of a traffic citation. They can lower premiums at any time and the courses are now conveniently available online.


Don’t ignore discounts for multiple drivers in one family or innovative programs for teenage drivers using GPS monitored vehicles. Couple these discounts with those that naturally follow for the age of the vehicle and over a normal driving life, a previously owned car can represent substantial coverage savings. The important initial consideration is to get a used car that has some degree of manufacturer warranty attached or is sold as “certified” through a franchised lot. All successful insurance negotiations on previously owned cars will begin with the verifiable condition of the vehicle. Shop wisely and you’ll be treated well in the premium department.

1 comment:

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