Getting and affording the best car insurance can be a chore in of itself. Throw in bad credit and you really have to do your homework. Below are three of the best tips that I followed in my search to get the most bang for my buck.
Be prepared. Knowing your credit score before you begin to shop is an essential part of being prepared. I went online and got my credit reports and scores from all three bureaus before I began to shop. This step can be very important. Once you accept insurance or even sometimes request a quote and the insurance company runs your credit report, you can be left with a mark that will alert all insurance companies of your inability to pay your bills on time. This “mark” can affect you for years in being able to negotiate better rates with other companies.
Be honest. I preferred to visit local companies so that I would not have to release my social security number before I was ready. By staying local, I was able to tell the insurance sales person that I had bad credit and exactly what my score was. Be honest about any bankruptcies on your record that are not discharged for at least five years. During this step you will also want to be aware of coverage limits. Many companies promise great rates but cut your coverage limits down to the bare bones. This is a potential disaster should you ever have an accident. The sales person will already know what their company’s policy is on offering insurance to individuals with bad credit. If they are unable or unwilling to divulge this information, move on. They may only be interested in getting you on board.
Don’t over-shop insurance companies. This is of utter importance if you have released your social security number. Car Insurance companies love getting a hold of personal information to include in a national database. This allows them to track not only trends but also your personal track record. Shopping too many companies can lead to even worse credit. It’s best to ask around and get the opinion of friends and families and then pick three of the most mentioned companies. I once got the best rates by talking to a woman while in line at the Division of Motor Vehicles.
A little knowledge and preparedness can go a long way in saving you money on car insurance when you have bad credit. While at times, the offer may be too good to be true, understand and beware of the long term saving as well. Knowledge, honesty and limiting your shopping can provide the best rates in a tough market.