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Is the Cheapest Car Insurance Always the Best Way to Go?

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Cheapest car insurance

The popularity of a cheap car insurance policy is always high. This is very understandable especially when you consider that people are constantly looking for ways to cut costs on their hard earned money. The biggest question then becomes, is cheap car insurance the best option always.

The truth is, going for the cheapest car insurance comes with its advantages and disadvantages. Yes! That policy you got at a reduced price may not be the best available option after all. Below is a look at the benefits and disadvantage of buying a car insurance policy at a rate that is lower than the average rate.

Benefits of Buying Cheap Car Insurance Coverage

As mentioned earlier on, there are benefits associated with affordable car insurance policies as outlined below.

You Pay Less… This the most obvious and immediate advantage of going for an affordable insurance policy. You spend less money on coverage that would have been more expensive had you been charged the average insurance rates by the company. Cheap car insurance companies use this as a tool to acquire and maintain new customers. As a matter of fact, it is the idea of paying less that makes these covers so popular.

You Pay Slowly… While some insurance companies demand you pay a premium in a lump sum, the majority break it down to easily affordable monthly installments. This takes away the burden of getting into car dealer financing because you don’t need a helping hand when paying the premiums. However, you need to pay a certain percentage as the initial installment. Mostly this figure is based on the operation costs. Once you have cleared on the set initial amount you can now pay the rest in installments you can afford. It is important to mention that the first premium is decided by the insurer.

You Get Competitive Rates… When looking of an affordable car insurance coverage, the first thing that you do is make a comparison of quotes. You go collecting them from the companies. This helps you to not only get cheap car quotes but also ensure you get competitive rates. If you walked into a particular company with a quote from yet another company, you can be sure that the insurer will do anything to match the quote on your hands. This brings in the element of a reduced premium which by extension means that you get competitive rates.

You Can Negotiate… As mentioned above, you can get the most competitive insurance rates when you decide to go the cheap way. You can insure your car at a higher value at a reduced premium. The fact that the cover is meant to be affordable gives you a leeway to negotiate the prices. This is not the case with expensive policies that come at an almost fixed price. Based on the value, the cheapest cars to insure are the used ones, simply because a reduced value means affordable premiums. You need to work on your negotiating skills though if you are to make the most out of these car insurance rates.

Disadvantages of Cheap Car Insurance

As stated earlier on, the cheapest car insurance is not necessarily the best. It comes with its drawbacks as explained below.

You Get What You Pay for… Perhaps one of the major drawbacks of opting for a cheap car insurance coverage is the fact that you get a somewhat compromised cover. Insurance companies are in the business of making money despite offering protection to your car. They are also well aware of the risks they are insuring and would most of the time charge a premium that is equivalent to the risk being undertaken.

This leads to taking away some of the benefits that you could have enjoyed had you gone for an expensive coverage. The effects are not felt immediately but later on when an accident happens, and you cannot get compensated to your satisfaction since the premiums don’t allow it.

You Don’t Get Full Cover… You may buy the policy cheaply but in actual fact, it may not cover everything. Cheap insurance covers are limited to certain parts of your car. This can be disappointing, particularly when something happens to your car. In addition, you don’t get to enjoy some of the benefits that are associated with expensive insurance covers. For instance, you are not entitled to towing or roadside services in case your car breaks down.

Cheap car insurance disadvantages
Your Claim is Not Attended to Fast… Unlike expensive insurance policies, cheap car insurance coverage does not get the attention it deserves. Insurance companies tend to drag their feet when it comes to processing your claim let alone investigating the cause. This is simply because the amount of money you paid is not enough to cater for some costs. In some cases, you claim is not attended to unless you pay the deductible first. While this is not professional, it is annoying more so when you consider the fact that customers are supposed to be treated with equal attention irrespective of the cover of insurance they have taken.

There are other policies that will give you a car to use while your car is being repaired. A cheap insurance may not be the best option when you have a lease to own car. The risk that comes with such cars is too high to imagine a partial compensation in case of an accident. In other words, your options are highly limited if you choose to go with a cheap insurance cover.

They say that cheap is expensive. You may be thrilled by the thought of paying less for your car’s insurance cover and forget the consequences in the event of an accident. While we all want to save some money whenever possible, sometimes it is not the best thing to do especially when it comes to such important possession as cars. Remember the sole reason you are insuring your car is that you can be taken back to the nearest financial position as you were before the accident occurred.

You need seriously to consider the benefits and the drawbacks that come with going for the cheapest car insurance. Look at both sides of the coin before buying your car insurance because the last thing you want is to go with a policy that does not cover you fully.



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