Women Buying Cars | How to buy a car as a woman in a male-dominated industry.

Please Pay Your Car Insurance

• Meredith Reynolds

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Meredith

last Saturday morning, I unlocked the dealership to open up. The phone's ringing. The alarm is beeping. My hands are full, so I get everything put down, turn off the alarm, run to the phone. It's a woman who bought a car from us about a year ago, and the short version of this story is that she told me her car was stolen overnight, and about a month ago, she had ended her car insurance. Holy. Unfortunately, this isn't the first time I've heard a story like that from one of our customers. Today we're gonna talk about four important things that you need to know about car insurance. It's very important, so make sure you listen.

You are listening to women buying cars, and I'm your host Meredith Reynolds. I'm a former teacher turned used car dealer, and I'm here to teach and empower women to walk into a car dealership with confidence and walk out with the car that's right for them.

Meredith

Welcome back to Women Buying Cars, the podcast that teaches and empowers women to purchase a car without the help of a man. Thank you guys so much for joining me. If you know a woman who may need this podcast, please share it with her, especially share it with the young women in your life. What a gift you would be giving a young woman. If you could help her feel educated and empowered throughout her life and any opportunity you have to do that, I encourage you to do so starting with teaching them how to purchase a car or take care of a car on their own. So please share the podcast if you are in Kansas City. I hope you'll come see me at Reynolds Automotive. I would love to help you find your next vehicle. Today we're talking about car insurance. I'm going to tell you four things you must know about car insurance, and I'm going to share a couple of the horror stories that I have as well. The first thing you must know about car insurance is the types, the bare minimum amount of coverage that you can have. In 49 states is liability. You are required to carry liability insurance when you drive a car. the exception is New Hampshire, but they have some financial stipulations that you have to prove if you're going to drive around without liability. Liability is the cheapest insurance because you are only covering damage you do to other people and other cars. If you get in a wreck and it's your fault, your liability insurance will pay for the repair of the other person's vehicle. It will not cover repair on your vehicle. You will either have to pay for that out of pocket or drive around in a beat up car. Again, in 49 states, you are required to have this. Legally, you will not be able to register your car, at least in Kansas. You can't until you show proof of insurance. If you are caught driving around without any insurance, you'll be fined. Your car could be impounded depending on your state, and the penalties could be worse. The second type of insurance, I'm just gonna lump all together and call it full coverage. It includes collision and comprehensive, and I'm not gonna get into all the nitty gritty, but full coverage insurance means that if you cause a wreck. Your insurance will cover the repair for the other person as well as the repair of your own car. It will also work for you if you hit a stationary object, right, like a light pole or if a tree branch falls on your car, or if your car is stolen. Or if your car is vandalized. If you're in a wreck and it's the other person's fault, then their insurance should be covering the repair of your car. But if they don't have insurance, your full coverage will kick in and take care of it, and then the insurance company will probably sue those people. so full coverage because it does all that is of course more expensive, but you are covered under so many different situations. Okay. The second thing you need to know about car insurance is that if you are getting a loan to finance your car, You're going to be required to carry full coverage. The bank that is loaning you the money is not going to let you just have liability because that's really their car until you pay it off and they want their car covered. So keep that in mind as you are finding your budget. You are going to have to budget for full coverage insurance if you are getting a loan. If you try to circumvent that and the bank finds out, they could potentially repossess your car. So it is something you have to have. And if you can't afford it, along with your car payment, you are shopping for a car that's too expensive and you need to do some serious budget. Refiguring my episode on budgeting is episode number five. If you don't have a clue what your budget is for your car, go listen to that one so that you don't make terrible mistakes. Part of that budgeting is getting a quote for insurance on a car before you pull the trigger. Okay, you may have found the perfect car and assume that your insurance rate's gonna be similar to what it is now, and it may not be. If you're buying a luxury vehicle and you currently don't have a luxury vehicle, your insurance is likely going to go up because any repairs to that car are gonna cost more. if you're getting a car that's known for. Getting into a lot of wrecks like a sports car, it's going to be expensive to insure. We had a customer recently trade in a Dodge Charger that he had a very short amount of time because he didn't know when he bought it that the insurance was gonna cost him $600 a month. He's in his early twenties, and this is an extremely powerful V eight muscle car that does not look good on paper to an insurance company. They are stolen frequently. I talk all about car theft, including Dodge Chargers in episode 11, and they also get into a lot of wrecks and don't hold up. Well, I. Sadly, someone I knew from my high school within the last year died in a wreck in his Dodge Charger. So those kind of statistics raise the rates really high on muscle cars and sports cars. So before you buy a car, call your insurance and find out what full coverage will cost you before you buy it. The third thing I would like you to know, because a lot of people ask about this, is, do you have to have do insurance officially on this new car in order to drive it off the lot? There is typically a grace period, meaning if you have insurance on your Nissan and you trade it in and you buy a Honda, that insurance you have on your Nissan will cover you in this Honda for a short amount of time. Okay, because it's possible that you're buying it at six o'clock on a Saturday and your insurance agent is closed and that's who you like to go through. So because of situations like that, you do have a short grace period typically, but I can't guarantee every single insurance company will have a grace period. Usually they're anywhere from two days to 30 days. That's a big difference. So you've got to find out what that is. If you don't have a car and you're buying a car, you have zero grace period. You have zero insurance and you have to get something before you drive off the lot. So you're either going to have to be internet savvy enough to sit there at the car dealership and find insurance online and get signed up and pay and all that stuff before you drive off. Or if you're working with an agent, you need to know what hours they're open so you can call them when you're buying your car and get it set up that way. Okay? Otherwise, you are driving without insurance. Make sure you understand that grace period and you don't miss it, and you get everything squared away with your new car as soon as possible. And the fourth most important thing I need you to know about car insurance is to not let your coverage. Lapse. Going back to my story at the beginning of the gal who bought the car from me a year ago, recently canceled her insurance and the car was stolen. Now I have not heard an update and I pray that that car was found and it's still drivable because if it's not found, she still has four years of loan payment. On that car, it doesn't just go away. She had paid off a year and I don't know her situation if she paid any extra, but if she paid the minimum of what's due every month, she still has four years and the bank still expects her to pay that even though she now doesn't have the car. Sadly, in the last 18 months, a different customer called me telling me that he had done basically the same thing and that his car had been totaled. He'd been in a wreck, the car was totaled, he didn't have insurance. You are just completely out the money, and the bank still expects you to pay them, but how can you pay them? While also trying to find another car, because here in Kansas City, it's difficult to get around to get to work, to get to the grocery store without a car. It's not impossible, but it's very difficult. So these are people who are still in the workforce. And they're gonna have to get to work and they're going to need a car. But how can they get a new car when they still show that they have a loan on the old car? Most banks aren't going to give you a second car loan, especially if you're just a single person. And even if they could, how can they afford two car payments? If they have cash saved up, they might be able to buy a very cheap car. But they're still going to be making that car payment. Will people do that? Well, statistics show they won't. It's very hard for someone to see four years of car payments ahead of them for a car that no longer exists to them. And so historically. Most people don't do that. They don't keep making payments and their credit ends up in the toilet. From there, it's very hard to get another car loan. It can also be hard for it to get insurance again because you have let a lapse occur, or you might have to pay more for your insurance rates because you've let it lapse. It is just a really bad situation overall. Episode four talks all about credit score and how important it is. How really, really important it is. And if you have not paid back a car loan, why would a bank be willing to loan you money for another car? Even if it's a different bank, it all shows up on your credit report. Sometimes your credit score can affect what job you can get. Certainly your ability to buy a home, chances are if you let your car insurance lapse and your car is totaled or stolen, there's a really good chance because of circumstances, you're gonna end up with really bad credit and a struggle for many years. I certainly know that if you're a single mother and you're not getting child support, which happens all the time and you are trying to make ends meet and you've got medical bills, that sometimes people are forced into situations where something has to give and they've gotta take a gamble, and that gamble could be insurance. And I understand there are a lot of situations people get into, but I hope that you will listen and keep your car insurance current and again, make sure when you are buying a car that you can afford it. So to recap. There are essentially two types of insurance liability, which is absolutely required by law and full coverage. If you're getting a loan, you will be required to have full coverage. There is a grace period when buying a car typically. Where you can drive off in your new car before getting it all squared away with your insurance agent. But make sure you know what that grace period is, and then get your car on your insurance as soon as possible. And finally, please pay your car insurance. Please don't let it lapse. Put it on automatic payments so you don't have to think about it. Not doing so could have consequences for many, many years. Again, share this episode with young people. they don't have to be women. If you have a young man in your life who realizes he can listen to a podcast that's geared toward women because it has good information, then please share it with him as well. This is important. They need to know this the rest of their lives and they need to take it seriously. It's all part of helping them become an adult. So please share it. If you have comments, I would love to hear from you. If you have a horror story, send it to me. if you want a suggestion for a show, if you just wanna say something to me, I would love to hear you. There is a link at the top of the show notes for where you can send me a text. You'll also find my email somewhere in the show notes as well. So thank you so much for listening and happy driving.