woman buying a car at a dealership

How Financing a Car Can Affect Your Auto Insurance

One common question many new car owners have is whether financing their vehicle will affect their car insurance in Maitland, FL. More specifically, individuals want to know if financing a car will make the rate go up. The short answer is possibly, but it can vary from person to person and policy to policy.

One major thing to remember is that when financing a vehicle, you’re agreeing to work with a lender. Lenders require you to have full coverage for the vehicle throughout the payment structure. If you currently have partial coverage or liability coverage, then you’ll need to update your policy — and yes that means paying a little more each month.

Please also bear in mind that a lender will not agree to reduced coverage rates during months you’re not using the vehicle. Reduced coverage typically applies to people who only use a car seasonally or are not actively driving it due to being overseas for several months. Even if this is typical for you, you’ll be responsible for full coverage whether you’re using the car or not.

Lastly, if you’re upgrading to a newer model car, know that the coverage options for that vehicle may differ. If your previous car didn’t have lane assist cameras, but your new one does, your car insurance policy may need to be adjusted to cover the new technology. On the bright side, if the technology is proven to help save you from accidents, you may see reductions in your policy rate from your insurance company at some point in the future.