Quick learning: Beyond the car payment
About this video
A new car owner's insurance doubled because her lender required full coverage on a financed car, not just basic liability. Three things drive the cost up: the car's value, whether it's financed, and the coverage level the lender requires. The advice: get an insurance quote before you go to the dealership.
You'll be able to
- explain why financing a car can raise insurance costs.
- name three things that drive up car insurance costs.
- explain why to get an insurance quote before buying.
Key words
- Full coverage
- Car insurance that covers more than the basics; lenders require it on financed cars.
- Basic liability
- Minimum insurance that covers damage you cause to others.
- Insurance quote
- An estimate of what your insurance will cost.
- Financed
- Bought with a loan that you pay back over time.
Transcript
- My friend just bought a car. Her insurance doubled, and nobody warned her. I'm so excited for her, but I asked her one question. Four minutes of silence. (text tapping) This happens all the time. When you finance a car, your lender requires full coverage, not basic liability, and that can cost significantly more.
Three things drive that number up, one, the value of the car, two, whether it's financed, three, the coverage level your lender requires. Here's what you do. Get an insurance quote before you go to a dealership. That number is a part of your monthly payment, whether you've planned for it or not.
The car is great, though, just not double-your-insurance great.
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