With the clock ticking down on the Cash for Clunkers program drivers are lining up around the block to take advantage of the last days of government funding. If you’re driving around town in a beat up clunker that can’t make up its mind whether it’s going to live forever or croak in the middle of the interstate Cash for Clunkers might seem like the answer to your prayers. Cash For Cars Sydney Before you sign on the dotted line for that great financing deal and take advantage of your government credits, make sure you do the math on your auto insurance. When companies advertise the Cash for Clunkers program they tend to leave some key facts out of the picture-for example, the fact that when you participate in the program you’re going to be signing on the dotted line for both a car loan and increased auto insurance rates. If you’re thinking taking Cash for Clunkers for a test drive but haven’t done a whole lot of homework, here’s how it works.
Once you’ve got the keys to your shiny new car it’s time to pick up the phone and buy the insurance policy that will keep it safe while you’re out on the highways. When you were cruising around in your clunker you probably had the bare minimum you could get away with, and you were happy with that! Cruising around in a new car is a whole new ball game.Since you’re now the proud holder of a lien on your car until you get your financing paid off you’re going to have to carry collision and comprehensive insurance to make sure that your lender doesn’t lose their entire investment if you’re in an accident and the car is totaled. That’s going to make your car insurance rates climb.Added to that is the fact that your auto insurance company isn’t going to take your handy government credit into account when they’re tallying up the value of your car. Since your new car is going to have a higher replacement cost than your clunker you’re going to have to pay more to insure it. If your budget will stretch to include a car payment and a higher insurance payment that’s great, but many drivers are finding out their monthly income just doesn’t have that much give-and their auto insurance is paying the price.