Clunker Car Insurance Rates Compared to Cash For Clunkers Discount
Clunker car insurance is an important consideration if you are thinking of trading in your older car for a new one. Owning a 1984 or younger car which still gets you there and back but uses a little more gas (18-mpg or less) than is politically correct might tempt you to trade it in on a new fuel-efficient car.
Trading you clunker car in for a new fuel-efficient one is the target of the new CARS program (Car Allowance Rebate System) which allows a $4,500 discount toward the transaction. After overcoming an original case of shortsightedness, the "Cash for Clunkers" program is operating at full capacity, with new car dealers running to keep up inventories. The cars.gov website declares that the program will run till Nov 1, 2009 or until the additional $2 billion incentive is exhausted.
Keeping your clunker car insurance rates can tip the scale when you think of the additional expenses a new car brings. This is especially true if you finance your new car purchase because the dealer or bank will want you to obtain the full comprehensive insurance package to guarantee the value of his collateral in the event of fire, theft or natural calamity. You will burn through that $4,500 incentive on insurance expenses "tout de suite."
Trading your clunker car may be a less inviting option if you discover how to lower your clunker car insurance rates. By now you know that the higher the deductible, the lower your car insurance rates will be. Another fact is that there is little reason to continue your collision coverage on this vehicle due to its low intrinsic value and lack of inclination on your part to have any cosmetic damage repaired in the event of a crash.
The Mother Lode for saving on clunker car insurance is to drop the comprehensive coverage you may have been unwittingly paying for. If your prized 1985 Dodge Diplomat is swept out to sea in the next Florida hurricane, Bon Voyage. The trade-in value on cars of this vintage run around $1,300, not worth the expense of comprehensive coverage.
Conclusion
With most new hybrids running in the mid-$20,000s and economy mini-cars at around $13,000, the average person who owns a clunker car may not be able to budget for a new, more fuel efficient car, especially if you include the incidentals like insurance. Your options, in addition to saving on clunker car insurance coverage, drive the speed limit and drive fewer miles and enjoy carpooling and public transit.
