Congratulations on paying off your car

Congratulations on paying off your car

You have diligently been paying off your car and are finally seeing the fruits of your labor. Although a brand-new car is a thrill, the vehicle loan it comes with is less than inviting which makes paying of that loan more rewarding.

Now that you have made that final loan payoff, you’re probably looking forward to enjoying the peace of mind of having a car title that is 100% yours. However, how does paying off your car affect your car insurance?

Should you drop full car insurance?

If you vehicle is all paid up, dropping full car insurance coverage may be tempting and why not? Isn’t the purpose of insurance to cover you when you can’t afford repairs?     

Although car insurance does accomplish this, you shouldn’t underestimate the risk of owning a car without coverage. Just because you own all the car title doesn’t mean you’ll be able to afford replacing it in case of an accident.

The key to liability insurance is striking a balance between tolerance and affordability. You should keep insurance, but after the loan is paid off, you can adjust the plan to cover your specific needs. However, before you start determining what insurance is best for you, there are several factors to consider such as:

  • Age: Though not the sole determinate, age can be a vital factor especially if your car has greatly depreciated in value. In contrast to a car fresh off the lot, a ten-year-old car may not be worth the cost of full coverage.
  • Mileage: Your vehicle’s mileage playing an important part in determining value. The simple fact is that the more miles your car has, the more natural wear and tear which causes it to depreciate. Therefore, keep in mind how many miles you’re putting on your car before committing to an insurance policy.
  • Usage: Part of being a car owner is living life with your car. After years of road trips, off-road ventures, and hours of commute, the daily toll adds up and will factor into your car’s overall worth.

These three factors will combine to determine the value of the car and will help you to make the best choice for car insurance. For example, if your car is older with more mileage and wear and tear, you may not want full coverage, but will want liability insurance.

In the case of an accident, liability insurance will redeem the value of your car without you overpaying for monthly insurance.

It’s too much of a “liability”

If you are hesitant about full car coverage after paying of your vehicle, why not get lower car insurance rates through a broker? The best auto insurance broker in Los Angeles, Daniel Fraisse Insurance will get you the best insurance coverage without breaking the bank.

Whether you’re still paying off your car or already completely own your car title, Fraisse is here to get you an affordable, personalized plan. Call Daniel Fraisse Insurance today.