Cash for Clunkers has attracted droves of people to trade in their old car for a new vehicle. But what about the ramifications on your auto insurance when you do that? Here are a few things to consider.The government sponsored Car Allowance Rebate System (CARS), also known as “Cash for Clunkers,” gives you the opportunity to trade in a qualifying old vehicle for a credit — either $3,500 or $4,500 — toward a new, fuel-efficient car. Many Americans are taking advantage of this opportunity. What many may not realize though, is that their auto insurance costs may increase. Here’s why.Auto insurance rates are based on several factors, including the age, make and model of a vehicle. Varying safety factors, costs of repair and loss histories (theft, accident rates) for different cars are what influence insurers in their rating that’s based on age and vehicle type.
So, that older American-made gas guzzler will probably get a lower insurance rate Cash For Cars Sydney than the 2009 Toyota Prius because newer vehicles tend to cost more to repair than older vehicles. Also if you have an old clunker, chances are that you either have high deductibles for collision and comprehensive or removed those coverages altogether to save you money.With a new car, you’ll want to have (and your lender may require) collision and comprehensive coverage. The bottom line: It’s very possible that you’ll be paying more for your auto insurance than you are currently used to. So what can you do?Once you’ve found some vehicles you like, get several different auto insurance quotes. Car insurance rates vary quite a bit from one company to the next. You want to find the lowest rate from a reputable company. Take the time to do some comparison shopping; it could save you hundreds.Get at least three different quotes. Use the same information when requesting your quote so you get an accurate comparison: Same deductibles, same limits of liability, etc. A convenient way to do this is at an online insurance comparison Web site. At these types of sites you only need to enter your information into one quote request form to get several quotes back from either companies or agents.