How Much Deductible Should You Have on Your Car Insurance?
Choosing just how much of a deductible is good can be a balancing problem. While most everyone wants to pay less on their monthly bills, if there were ever an accident, the amount that you must pay may be out of reach at the time. If that happens, of course, the insurance company will not pay. You must pay the whole amount of the deductible upfront – then they pay.
Lori Mandell at AutoInsuranceTips suggests that if it is apt to be a problem to come up with the deductible amount if you have a collision, then you certainly want to have a lower deductible. While it will mean that you pay more each month on your auto insurance premiums, at least you know that there will not be a problem paying for the repairs.
This makes it a better move for some to have a lower deductible rather than taking the risk of not being able to afford to fix the car. In that case, it is almost like investing in your own car and making sure that you have your wheels when the going gets a little rough.
On the other hand, if coming up with $500 or $1,000 is not a problem for you, then it only makes sense to increase your auto insurance deductible to these amounts and bank the money for the deductible. That way, it can earn some interest, too.
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