No Credit Car Insurances: Bad Credit, No Problem

If you are looking for a quick and easy car insurance, a “no credit car insurance” may be a good option. However, you need to know what you are getting with insurances of this type.

No Credit Car Insurances – Background

The obvious fact is that getting auto insurances or any other type of personal insurance, for that matter, was not as simple as it used to be. The big commercial banks don’t want anything to do with personal insurances, especially new car financing. In most cases, people who buy a new car from a dealer end up financing their insurance through the dealership. The merchant is likely to apply additional fees to the bottom line.

What a buyer might face without credit car insurances

If your credit score is less than perfect, you realize that you face many limitations on the type of financing you can realistically obtain. Lending is a high-risk venture. Now more than ever. The lender evaluates your repayment history. Nobody wants to lend money to someone who is known to default on insurances. Those who do, get more interest and apply more restrictions. More interest means more money being paid off before you default. How your credit score affects your work ethic is another story. But it is true. Some employers will not hire you if your credit is bad.

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Collateral is a good bargaining tool. If you have enough guarantees, you can buy almost anything you want. But, if you have a bad credit history, there is a good chance that there are no collateral. A rock and a hard place. Like I was a kid. You can’t get a job without experience – you can’t get experience without work! Likewise, just as a good grocer gave you your first break, there are lenders willing to give you a break and help you re-establish your credit and obtain collateral.

Risks of car insurances without credit

Beware of wolves wearing sheep’s clothing. There are lenders who prey on those with poor credit. They rely on the fact that you may not all be familiar with credit. They are counting on you not knowing the ins and outs of car financing. You may be required to pay astronomical interest in exchange for waiving credit check requirements. You may end up making payments for twenty years without actually paying a single cent of the principal.

Likewise, you have a “insurance against property”. You put your car as collateral and agree to repay the insurance in a very short time. Usually about a week. This is basically a rationed insurance sharing. If you borrow $ 200, you will pay in the neighborhood of 3 to 4 hundred. This might help you buy a second car, but think about it – does the second car really matter? Why not take the bus for a while, save up and buy your second or first car without all the extra fees?

Always carefully read every minute detail in any type of financial transaction. If a car insurance without credit will benefit your financial situation without putting you over the edge, go for it.