Reader’s Question:
Hi! I got a new car for graduation here in Manchester, Connecticut, but I still want to use my older car and keep insurance on it. A friend suggested I increase my deductible to lower my car insurance bills. Is this a good idea?
Palmer
Manchester, CT
Increasing your deductible does have the potential of saving you money on your car insurance bills, especially in the long run, however, please do consider a few things first before doing so: The actual cash value or the price tag of your car and the actual amount of deductible you will have to pay the insurance company to process a future claim.
Too high of a deductible might make it prohibitively expensive to file an auto insurance claim, or the difference between your car’s worth and the actual deductible might be so little it might not make good sense at all to raise your deductible, just to shave a few dollars off your car insurance bills there in Manchester, Connecticut. Finding the right balance between your budget, your car’s value, and the probability of you actually filing a claim in the future is the key here.
If you have a brand new or expensive vehicle then you might not want too high of a deductible. Statistics show that newer vehicles tend to be involved in car accidents, vandalism, or get stolen more frequently so you want to avoid a big crunch if you do need to file for insurance. Likewise, if you have an older vehicle, with some wear and tear here and there but otherwise still in good shape, you may choose to just shoulder the expenses of having minor fixes or lower your collision coverage and accept a higher deductible to save you money on auto insurance bills.
Tags: advice, auto insurance
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