Car Insurance Costs
Car insurance costs can throw a wrench in your car budgeting. From my own experience, I was shocked how much car insurance I needed to pay for even my used pickup truck(which I subsequently sold). Being young and living in a large city are two factors than can make your car insurance premium skyrocket. In some extreme cases your monthly car insurance bill may trump the monthly bill for your car loan. When purchasing a new vehicle, many consumers do not research the cost of car insurance until they have already purchased the car. I have seen this a lot with military members.........they take the money they earned while deployed and dump it into a brand new luxury car. They see that they will have a low monthly bill for the car loan, but they forget to factor in car insurance. For a young person purchasing a $30,000+ car, the monthly car insurance bill could easily reach $400 a month!
Myself having recently come back from a deployment from Iraq, I could have put down a down payment for over 70% of the cost of a brand new 3 series BMW. If you check my garage right now, I still have my trusty 99 Dodge Intrepid. Sure, I could have bought a fancy new car but I would have had to pay almost $400 a month on car insurance. I just felt like I would be throwing money away, and essentially it would be. Cars are a bad investment, unless we're talking vintage/rare cars. You have to keep forking over dough for gas, maintenance, and insurance while the car keeps depreciating in value. I strongly suggest that young people below the age of 24 purchase a used car that they can pay off quickly. This way you are not paying absurd car insurance payments and by the time you're 24 you won't be charged nearly as much for car insurance so buying the brand new luxury car makes more sense.
So we already talked about how age plays a factor when buying
car insurance, but you can also cut down on your insurance premium
by buying a car rated highly for safety and low theft rate. Overall,
the best thing you can do when looking for car insurance is shop
around! Different car insurance companies charge different rates
for the same type of policy, easily differing by hundreds of dollars.
Compare multiple instant auto insurance quotes from top companies and save! Get Quotes Now.
Return to Choosing the Right Car
Like this article? Bookmark this page or Tell-a-Friend