By June 15, 2007 0 Comments Read More →

Car insurance: it’s necessary.

Reader question:

I just graduated from college and I have so much debt piled up that I just don’t think I can afford car insurance. I’ve never needed it before, but just got it because the law required. If I cancel my policy and play it safe for awhile, will I come out okay?

Gloria

It’s never a good idea to just cancel your policy, Gloria.

You mentioned that you just graduated from college, so one of the first things you might be interested in is checking for the sort of discounts your eligible for. If you have an engineering or science-related degree, you can get a discount for that. Also, there are certain alumni organizations that offer car insurance discounts with certain companies.

Once you leave school and maybe land that first job with your degree, it’s all a rush until you remember all that debt you piled up while you were in there getting educated. This can be overwhelming and might take up a good deal of your funds while you’re just starting out in your field, and smaller bills like auto insurance can seem inconsequential compared to thousands of dollars in student loans.

The good news is that you’ve likely almost reached that age where you are no longer considered a huge risk for automobile accidents, and your insurance will automatically lower. You probably also have a driving history by now that, if good, you can use in your favor.

The most important thing to remember, though, is that while it may seem to cost a lot to have insurance, it’s even worse if you don’t and the need for it comes up. If you wreck your car, you’re going to be paying a lot more to replace or repair it than if you had had insurance. And if you get pulled over and found without insurance, the court fees are phenomenal. Not only that, but tickets for no insurance can lead to the suspension of your license. To avoid getting your license suspended, in many cities you have to pay upward of $1,000 per year for a period of three years. By not getting, insurance, you’re just asking for more debt.

Shop around and get quotes from several companies. Ask your insurance company about 6-month and 12-month payment plans to help you manage the costs better. Most of all, take advantage of discounts. Ask your company what kind you qualify for. You’ll make it through.

Cheers,

Fashun Guadarrama.

Posted in: Auto Insurance

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