If you thought financing a used car would mean paying less for insurance, there are a few points to consider. A full coverage insurance policy is, in general, an excellent idea because it encompasses liability, collision, and comprehensive coverage. After all, you never know what could happen as you drive the streets of Englewood. Inadequate coverage could be financially ruinous, which should be considered as you work out how to finance a used car.
It’s true that used cars generally cost less, but insurance is a different matter. Just because used vehicles typically cost less than new ones doesn’t mean you can get by with liability insurance for protection in North Port. Most lenders require full coverage because they want their assets, i.e., the cars they finance, to be as protected as possible, so they can recover their value in case of an accident. If you need a loan for a used vehicle, anything less than full coverage is probably not in the cards.
Full-Coverage Insurance: Consider Carefully
There’s a longstanding rule of thumb that you should eliminate full coverage if your combined comprehensive and collision premium equals 10 percent of your car’s worth. However, there are other factors to consider, such as your financial situation and the car’s value. Dropping full coverage may be worthwhile if you can afford to repair a damaged vehicle, but it’s risky if you have an especially valuable car or if you may need to file a collision or comprehensive claim.
There’s no denying that full coverage can be pricey. In fact, full coverage auto insurance costs, on average, about $1,997 per year – that’s more than three times higher than the average state-minimum coverage. If you’re in the position of having to take on full coverage, there are affordably priced options that’ll help you avoid getting soaked. Shop around and check with less expensive insurers such as Geico, Esurance, AAA, and Allstate.
How to Finance a Used Car
If you’re not buying from a private seller and must finance a used vehicle, consider getting pre-approved for a loan. That way, you know what you have to work with and are better positioned to negotiate price and terms. And remember the cardinal rule when considering how to finance a used car: the more you put down, the lower your monthly payments will be.
Beware of long-term loans. You don’t want to be trapped in a high-interest loan over 60 months, even if you need to spread out the payments. Remember that a used vehicle is more likely to need ongoing maintenance, so the longer you finance, the more likely you are to incur maintenance and repair costs. And the longer you’ll have to bear the expense of full coverage.
How Many Years Can You Finance a Used Car?
Don’t expect a set term length when asking how many years you can finance a used car. It’s a highly variable number of months depending on the lender, but the average length is anywhere from 24 to 84 months (the fewer, the better). Reach out to the finance consultants at Kia of Port Charlotte near Venice if you need to discuss used car loan term lengths, and be sure to check out our used car inventory.
Have Questions About Used Car Insurance?
Whether you should fully insure a used car depends on several factors. If you have questions about insuring a used vehicle, feel free to contact us at Kia of Port Charlotte, and be sure to check out the used car inventory on our website.
