1) Owing money on a car might affect a person's credit score. Credit scores do affect your insurance rates.
2) If you have paid for the car completely, and do not owe anything on it, then you have the option to get less insurance than would be required if you owed on the car. For example, you could decide to get only liability insurance, and not get comprehensive or collision insurance. That decision would lower your insurance rates. But if you decided to get the full insurance (with comprehensive and collision), then you would pay the full price.
Yeah, it depends on whether you're talking about comprehensive or liability-only. Whether the car is paid off doesn't affect your liability in the slightest. But when you're actively paying off a loan, the comprehensive coverage you're required to carry is based on the value of the loan, which, due to interest, will be considerably more than the actual value of the car. Basically, you're insuring your car AND the bank's investment in your car. At least, that's my understanding, which could be wildly inaccurate. : )
There's no "extra charge" on insurance polices for cars with loans. However, if they pay cash for the car, they don't HAVE to carry "full coverage". If they carry less insurance COVERAGE than someone with a loan, then their insurance will cost less.
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They do not go down for that reason. However:
1) Owing money on a car might affect a person's credit score. Credit scores do affect your insurance rates.
2) If you have paid for the car completely, and do not owe anything on it, then you have the option to get less insurance than would be required if you owed on the car. For example, you could decide to get only liability insurance, and not get comprehensive or collision insurance. That decision would lower your insurance rates. But if you decided to get the full insurance (with comprehensive and collision), then you would pay the full price.
Yeah, it depends on whether you're talking about comprehensive or liability-only. Whether the car is paid off doesn't affect your liability in the slightest. But when you're actively paying off a loan, the comprehensive coverage you're required to carry is based on the value of the loan, which, due to interest, will be considerably more than the actual value of the car. Basically, you're insuring your car AND the bank's investment in your car. At least, that's my understanding, which could be wildly inaccurate. : )
No.
There's no "extra charge" on insurance polices for cars with loans. However, if they pay cash for the car, they don't HAVE to carry "full coverage". If they carry less insurance COVERAGE than someone with a loan, then their insurance will cost less.
No.
If the car is totaled - insurance will pay the same amount to you whether it's paid off or not.
Then with that money - you pay off the car loan. In your case - not.
Not one bit - I'm so glad I could make you happy
Now, once you pay off a car, you can increase your deductibles or even carry liability insurance only - if you dare
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of course not!