Is Car Insurance Cheaper When The Car Is Paid Off?

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   Tom Sheehan

   Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482

   It can be, but it honestly has very little to do with paying off the car.  When there is a lienholder, they require that the insurance policy include coverage for physical damage to the vehicle, namely Comprehensive and Collision.  Once the loan is paid off, there is no entity imposing that requirement any more so you could remove those coverages form your policy and save premium.  Discuss this decision with your Insurance Professional in order to best understand the potential premium savings vs the possible financial risk to you in any future loss.

   Answered on January 9, 2014

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