Get Cheap Car Insurance if Auto Loan is Paid Off
2nd March 2009, 10:08
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Though this is unconfirmed it is nonetheless interesting. There has been a possible myth floating around about how to get cheap car insurance. It is thought that your premiums could be cheaper if your auto loan is paid in full. The theory is the insurance companies see loans as more of a liability than the auto being owned outright.
Part of the theory is this, if the car is totaled then the insurance company would have to pay most if not all of the auto loan off. However, if it is completely owned then they can choose to offer a much lower payout according to the lowest market value estimate they can get their hands on.
We approached a few insurance companies to try and confirm this. Most would not comment. We approached Cheap Car Insurance and they said they have not heard of this procedure being used in the insurance industry.
We are still investigating and will update you on this very interesting possibility. If it is a myth then we will debunk it. In the mean time it looks as if the insurance companies may be treating owners unfairly.
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