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Will a Repossession of my Car affect Insurance Rates?cheap car insurance for young drivers 

These days, life seems to be tough, not to mention the economic crisis we are facing. People today are facing foreclosures, debts and repossessions of their properties. It’s not surprising that even those people who pay their bills on time face these kinds of challenges. These things however do not only affect your pockets but it will also affect other important things like car insurance premiums. If you are facing repossession problems then you are most likely to pay higher insurance rates.  

Each of our bills is separated and has nothing to you with your car insurance bills. The payments we make on our credits have nothing to do with that either. But because times are changing, your credit score now will also affect your car insurance rates. This is the new way that auto insurance carriers determine premiums. This means that every small thing you do to your credit score will have an impact on what you are paying. This will lead you to a question; will repossession affect your auto insurance rates? Sadly, the answer is yes but before you break things, you must first understand how your credit score affects your premiums. 

You may wonder how it is even possible that your credit ratings can affect your car insurance premiums. Remember that all car insurance companies provide protection against risk and your car insurance company (like all do) assess your status if you display the kind of risks they are trying to avoid. Before you are allowed to have coverage, you must also pass their standards. Car insurance companies believe that if you are able to handle money well and conscientious about your car or how you drive it, you will be able to gain their trust.  

So how does repossession affect your current premium rates? Your premium will increase of course. If your credit score is low, this does not always mean that you are an irresponsible credit holder. There are many factors that could affect your credit score too. If you lost your job or been forced to work at a job that pays lesser than your financial needs, suffered financially through a death of a spouse, divorce and other devastating reasons then this does not make you financially irresponsible.  

Unfortunately, not all car insurance company will do this kind of assessment on you. Your financial responsibility will remain unknown even if you have good reasons for having a low credit score. An insurance underwriter will quote you a higher premium if your credit score is low, this is the rule. Though there are some car insurance companies who are still willing to offer auto insurance to those who’ve had a repossessed vehicle before. Of course, this also means that they will charge a more expensive premium for you.  

If you have the chance to reacquire a new vehicle again then do your best to strengthen your credit score. This is the only way you can do to keep your car insurance at a low rate. This will also prove to your car insurance company that you are doing all you can to keep your car this time. Talk to your bank or financing company. Know what you can do to pay your credits. Make a payment arrangement, this way you can start all over again. Times are hard yes, but there are financial institutions that are willing to help you if you are also willing to help yourself.