Saving on Auto Insurance with Bad Credit

 

Even credit challenged drivers can now save on auto insurance costs if they drive certain General Motors and Ford vehicles and are insured by State Farm

Auto insurance costs

Consumers with less than perfect credit that apply for high-risk auto loans are often on tight budgets and are especially sensitive to the costs of car insurance.

At Auto Credit Express we’re familiar with this situation because for over two decades we’ve been helping car buyers with low credit scores find dealers for their best chance at auto loan approvals.

In some cases, buyer’s budgets are stretched because auto insurance rates in some states are based, in part, on the insured’s credit scores. But there is a form of car insurance that, even under these circumstances, could make their auto insurance premiums more affordable.

Pay as you drive

Called pay as you drive (PAYD), it’s a form of auto insurance that, in addition to the usual factors, calculates a portion of your premium to how far you drive. By taking into account the lower risks that lower mileage poses, it gives these drivers a discount over what they would normally pay.

State Farm and SYNC

Earlier this year, State Farm Insurance and Ford announced a partnership that included an expansion of State Farm’s Drive Safe & Save program to include select SYNC-equipped Ford vehicles.

State Farm customers who drive these vehicles can reduce their auto insurance premiums by using the Vehicle Health Report feature of SYNC to report their mileage.

State Farm stated that initial savings will be about 5 percent, with the actual premium savings determined at each six month renewal date interval, based on the number of miles driven during the previous six-month period.

The auto insurance company also estimates that drivers, who average 1,000 miles per month, will save about 10 percent, will lower-mileage drivers saving up to 40 percent.

State Farm and OnStar

Drivers of General Motors vehicles equipped with OnStar and an active subscription that includes OnStar Vehicle Diagnostics can also take part in State Farm’s Drive Safe & Save program.

At the time OnStar owners sign up, State Farm will request up to the six most recent historical odometer readings on your car and, as with the SYNC program the premium is recalculated with each six month policy renewal.

Unlike the Ford system, however, there is a charge for the OnStar subscription service and customers may not always save enough to recover the cost of OnStar.

One other point that should be made is that there currently are 14 states (Al, CA, CO, FL, GA, IL, IN, MI, MN, OH, PA, TX, UT, WA) where the Drive Safe & Save program is available and according to the State Farm web site, while OnStar participates in nearly all of those states, it’s not clear in how many of them Ford drivers with SYNC system can sign up.

As we see it

PAYD auto insurance, such as the State Farm Drive Safe & Save program, could certainly help low-mileage drivers with auto credit problems – especially in states where auto insurance rates are partially based on FICO scores.

So if you have bad credit and you’re shopping around for car insurance, be sure to check if your state allows some type of PAYD car insurance program. If it does, check out the various programs to see what your savings might be.

One more thing to check out: if you’ve had past car credit problems, Auto Credit Express can help you find a dealer for your best chance at auto loan approvals.

So if you’re ready to reestablish your auto credit, you can begin now by filling out our online auto loans application.