English 
Español 
Paying off your vehicle could save you a lot of money, but it doesn’t always lower your insurance rates. Still, you need to maintain coverage to protect your car, truck, van, or SUV, which includes the automobile itself as well as any property damages or injuries that may occur while you’re operating the car. Below are some of the insurance advantages, including financial benefits, that may occur when you pay off your vehicle.
Focus on Reduced Rates
Even if your vehicle is paid off, California and almost every other state requires drivers to have auto insurance. Operating a car without insurance could lead to legal issues and expenses, such as a driving suspension, court costs, license reinstatement fees, and more. To avoid these financial setbacks, it would be best to focus on the reduced rates you’re eligible for as opposed to letting your insurance coverage go altogether.
Gain More Control
If your vehicle is paid off, you can cancel any unnecessary coverage options. This will be based on the type of policy you currently have. For example, if you’ve purchased gap insurance, it covers the difference between your car loan and what you’ll receive in the event of an accident that leads to total loss. However, if your vehicle has been paid off, you don’t need this specific coverage. As a result of paying off your car, you have more control. You can make policy changes and select less expensive options.
Remember that certain choices won’t be available regardless of whether your vehicle is paid off. This is determined by various factors, such as reaching certain mileage amounts. For example, if you pay for mechanical breakdown coverage, most providers set a limit of 100,000 miles or lower for the policy to be applied. Therefore, once you reach that mileage limit, this specific coverage is no longer an option, and you’ll need to speak with your insurance provider about other selections.
Evaluate the Situation
Paying off your vehicle could allow you to begin building savings, but you’ll have to take on more financial responsibility if you decide to cancel your current policy and face a breakdown, accident, theft, or other unforeseen incident.
If you don’t feel positive about canceling your current insurance policy, it would be best not to. While you cannot guess what type of issue will occur, even if none have in the past, it’s best to stay covered in the event of a potential setback.
Reach Out to Your Current Provider
Notifying your current insurance provider is necessary to access financial options even if insuring a paid-off vehicle isn’t cheaper. Updating the provider allows the company to remove certain factors, such as banks and other lienholders’ names on your policy.
You can also research different companies to learn more about their deals, such as discounts for bundling car and homeowners insurance. Doing so allows you to switch companies or ask your current provider to match other offers.
When you need advice about which type of auto coverage you need, trust Altra Insurance Services to be your guide. We’ll help you choose the insurance coverage that’s right for you so you can enjoy peace of mind. Whether they need home insurance, motorcycle insurance, or high-quality auto insurance, Chula Vista residents know they can trust us to provide reliable, affordable coverage. Give us a call or request an online quote now.