Smart Auto Insurance Blog

According to an article on coosavalleynews.com by Tony Potts, State Farm auto insurance is reminding everyone that the Federal Government’s Car Allowance Rebate System (CARS program or “Cash for Clunkers”) has an auto insurance requirement.

Last week the US Senate agreed to extend the CARS program until Labor Day which is a great opportunity for more car owners to take advantage of the tax benefit.  By trading in an older car for a new one, tax credits will be given.  But there are stipulations, one of which includes auto insurance.  Trade-in cars must  be registered and insured for the full year before trading in.  This is an important reminder of how crucial it is for all autos to be covered by insurance.  Uninsured drivers pose a risk to everyone on the road, not to mention it’s the law in most states.

Many consumers are considering trading in their older, less fuel efficient cars for newer cars to earn some extra cash through the government’s CARS program (Car Allowance Rebate System).  But higher auto insurance rates could minimize the benefits of trade ins according to insurance.com. 

Buying a fuel efficient car is great for the environment, but new cars generally have higher auto insurance rates because they are more expensive to repair and replace.  You may end up offsetting the savings from the government.  Fuel efficient cars do cut gas costs weekly right away, but auto insurance rates can cost you a lot more money over time so shopping around is crucial.  According to a study from women-drivers.com 22% of drivers shopped for auto insurance before buying their policy for their new car.  Rates are dropping so shopping around for auto insurance is a smart move. 

The CARS program is still a great initiative towards protecting our environment, but it may not be for everyone.  As always, do your homework before trading in or buying a new car.