Many people purchase used cars. It provides a variety of advantages including cost effectiveness. Yet, getting the right auto insurance for this type of vehicle is important. Your car insurance agent can guide you through the process. However, there are a few key things to know before you choose just any policy.
Insure for the Value
Select an auto insurance policy that represents the value of the car right now. Used cars do not depreciate as quickly as brand new cars. However, be sure your coverage offers enough financial protection to minimize your losses. Plan for the worst here. You want to be sure the amount of coverage you have is enough to pay off your loan if the insurer totals the car.
Some used cars are still rather new. As a result, they may depreciate faster in the first 18 months of your ownership. You may wish to consider gap insurance. Your auto insurer can help you determine if this is wise based on the make and model of the car.
Protect from All Risks
Whenever possible, invest in enough coverage to protect your car from most types of risks it can face on the road. If you have a loan on your car, you can expect the lender to require coverage. It is beneficial, in most cases, to invest in:
- Comprehensive coverage to protect against storms, vandalism, and theft
- Collision insurance to minimize damage you cause to the car when you collide with something
- Liability insurance to meet state laws for covering damage you cause to another party’s property
- Medical payments to cover medical bills for yourself and your passengers
- Underinsured and uninsured coverage to minimize losses other drivers without enough coverage cause to your losses.
In most situations, a customized policy is best. Your car insurance should match your risks. For example, if the vehicle has add-on features, such as an entertainment system, be sure the policy reflects this. You may want more liability insurance if you drive a significant amount of time.
Auto insurance is there to protect you. When you get a new car, even a used one, you need a policy designed to minimize all of your risks. Work closely with your agent to discuss your needs. This includes protection for loss of value, such as gap insurance coverage.
Also Read: Auto Insurance Coverage for Student Drivers - When Your Teen is Learning