Consumers looking to compare car insurance quotes for a new motor vehicle may need to check their credit scores beforehand, suggests one new report.
Many factors can influence car insurance rates. From the amount of experience the driver has, the accident history of the car owner, and how likely claims are to be made, there are many determinations car insurance companies make while calculating premiums. One additional factor may be having a positive credit score.
Maintaining a high credit score can be important in two different ways. While the traditional benefit of having good credit is the ability to find an auto loan with a favorable rate – something that is very important in the currently bleak economic climate – keeping your credit score positive can save a consumer on the costs of their car insurance as well.
According to data released by CNW Research, the average credit score of a consumer that got their auto loan approved was 760 as of October of 2008. The median has slipped slightly as of January of this year down to 760, which mens that there are some consumers that may no longer qualify for prime rates of interest.
CNW states that consumers with scores of 650 and under are still being approved for new loans. Most likely these consumers are facing larger interest rates on their loans, which could interfere with any plans to save money in the long run. Some car manufacturers such as Toyota have requirements that consumers maintain a credit score of least 720 or higher in order to qualify for its 0zero per cent loan on a new motor vehicle.
The researcher did say however that signs are emerging that more people are getting approved for new car loans. This past October, approximately 11 per cent of loans were approved when the prospective buyer’s credit score was 670 or lower.