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Auto Insurance cost may outweigh Clunkers for cash

Date: Aug 04 2009
Filed In: Auto Insurance101

Many consumers are considering trading in their older, less fuel efficient cars for newer cars to earn some extra cash through the government’s CARS program (Car Allowance Rebate System). But higher auto insurance rates could minimize the benefits of trade ins according to insurance.com.

clunkers-for-cash

“Cash for clunkers” shoppers flood car lots

Buying a fuel efficient car is great for the environment, but new cars generally have higher auto insurance rates because they are more expensive to repair and replace. You may end up offsetting the savings from the government. Fuel efficient cars do cut gas costs weekly right away, but auto insurance rates can cost you a lot more money over time so shopping around is crucial. According to a study from women-drivers.com 22% of drivers shopped for auto insurance before buying their policy for their new car. Rates are dropping so shopping around for auto insurance is a smart move.

The CARS program is still a great initiative towards protecting our environment, but it may not be for everyone. As always, do your homework before trading in or buying a new car.

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