Second chance credit and high-interest rate: What impact on your car insurance?
Everyone goes through a phase of emptiness due to indebtedness, loss of employment, burnout or others and which exhausts the individual at the moral and financial level. But sometimes in spite of a difficult financial situation, one is obliged to acquire a vehicle. It must be said that obtaining an auto loan while one is riddled with debts, is not obvious, except that there are always solutions. Indeed it is possible to benefit from second or even third chance funding. A temptation that can not be resisted even if interest rates are particularly high.
Nevertheless, going through a sub-standard creditor is not without damage because it can affect car insurance. In this case, insurers may impose particularly exorbitant premiums and some may categorically refuse to insure the vehicle.
Second chance but without auto insurance
To have a vehicle is normal but sometimes the financial constraints do not make it possible to make such a purchase. This is the reason why many people use second chance funding. But before getting behind the wheel it would be wise to consult the insurer. This is not a simple formality because by providing the creditor’s details it is very likely that he refuses to insure the vehicle because of the car loan contracted at an exorbitant rate. Indeed if the rate exceeds 10%, it is possible that this is a sufficient reason for the rejection of insurance by insurers of the regular market.
This constraint can be overcome by calling its Assur360 automobile insurance broker at a high rate, thanks to the contribution of a second or third chance creditor. The goal is to get optimal coverage at the best possible price.
The reason for the refusal of the auto cover
Insurers are very suspicious, it must be said. Generally, the calculation of the damage insurance is based on certain elements like the age, the sex, the antecedents in terms of claims, and obviously the credit score of the insured.
Drivers with below-average credit ratings are the most likely to make a claim, even more so than those with higher credit ratings. And that is what justifies the refusal of certain cases. Indeed, resorting to second or third chance financing is mainly to improve one’s credit rating. And in this case, insurers are cautious to offer auto protection. Some insurers such as Pafco offer interesting solutions.
The creditors who offer these attractive offers apply exorbitant interest rates which can weigh too much on the budget of the motorist and on the other hand, the latter may be faced with a refusal at the level of insurance companies. The best thing to do is to ask an insurer specializing in sub-standard car insurance before you even buy the vehicle. This is the best option to avoid being over-indebted and not covered by adequate self-protection.
Causes of increased auto insurance premiums
According to Jean Boissonneault of Assur360, the legalization of marijuana will undoubtedly have a small impact on insurance premiums in Quebec. Will new technologies drive up or down auto insurance premiums? And when there are autonomous cars, they are probably safer my repair costs are going to be huge during a disaster.
The biggest impacts to watch in the coming years are:
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