Choosing auto insurance coverage is perhaps the first big decision auto owners face after deciding on what type of car they want. Following is some helpful info on how to choose the best car insurance for your needs.

Auto Insurance Rates: This is probably the biggest deciding factor in which auto insurance company you will go with. Luckily, most car sellers have online calculators that will give you estimates.

Remember, all auto insurance coverage is not created equal, and neither are vehicle insurance providers. You can pay significantly more – for the exact same coverage – depending on which company you go with. So, do your due diligence.

Car Insurance Payment Tip: Try to pay your auto insurance coverage out for six months at a time, instead of paying monthly. You will usually qualify for a discount if you do so.

Customize Your Auto Insurance Policy: Almost all providers will allow you to customize your projected policy – adding and taking away things like amount of deductible so that you will get a realistic idea of what your vehicle insurance is likely going to cost you per month. You can do this right online when you are rate shopping.

Check Auto Insurance Ratings: Many consumers don’t know this, but there are companies that rate auto insurance companies. They rate them on factors like: ability to pay consumer claims, coverage options, their rates, services they provide, their overall financial stability and future viability. Two such ratings to look for are Standard & Poor’s ratings and Fitch.

The reason you want to know about an auto insurer’s rating is that the higher their rating is, the more likely they are to fold and/or be able to pay claims.

Car Insurance Coverage and “Convenience”: This is perhaps one of the biggest mistakes most car owners make – they stay with the same auto insurance company out of convenience. It PAYS to re-evaluate your vehicle insurance provider every time your policy comes due (usually every six months).

This means investigate other companies. If you find a better deal, tell your current provider and see if they will match or beat it if you stay with them (yes, sometimes you can negotiate).

If you do decide to go with a new car insurance company, be sure to have the new policy in place before you cancel your old one or it expires. Even one day without coverage – if an accident happens or your car is damaged or stolen – can cost you a bundle.

Auto Insurance Coverage Cancellation Tip: Most auto insurance experts say that the best time to change carriers is two to four weeks before your current policy expires. Some companies may charge you a fee for early cancellation. Check this before you sign up, as this is a ridiculous fee and you shouldn’t have to pay it.

The Best Thing You Can Do to Lower Your Insurance Rate

When you own your car ouright — ie, don’t have a car loan — you can carry as much or as little insurance as you feel comfortable with. (Note: You have to carry basic liability in most states by law.). This can save you hundreds of dollars a month. Hence, it pays to have no car loans!

P.S.: Buy Cars Cheap at Government Auctions.

Copyright 2009: NoCarCredit.com. This content may not be reproduced or redistributed without the express written consent of the author. Violators will be prosecuted.

No Car Credit Means No Car Payments – Ever! Imagine what this would be like for you.

Need a car? Pay for it in cash and never have to worry about monthly payments!

American consumers are drowning in debt. And, one of the biggest budget busters many hardworking citizens face is the monthly car payment. It’s usually the biggest bill after housing (mortgage/rent).

Did you know? The average American car payment is $400/month. And the average length car payment loan is for five years!–Source: National Automobile Dealers Association (NADA.com)

The average monthly car payment in America is $400. And if you have a car loan, by law, you must have full coverage. Full coverage for car insurance can add another $100-$200 per month to the average car owner’s monthly payment.

Turn $400 a Month into $2.2 Million

Now imagine not having a car payment and investing that money $400-$600 per month for 25, 30 or 40 years. You could be well on your way to being rich. How? Consider this: on average, the stock market has returned 10-12% for the last 50 years. Keeping this in mind, let’s crunch some numbers.

To keep things simple, let’s say you invested $400/month (the average American car payment). And, let’s say you earned 10% interest, compounded annually. If this was the only money you ever saved, your investment would grow to $497,264 in 25 years. In 30 years, your account would grow to $831,717. In 40 years, $2,237,843.

In 40 years, your actual deposits would only be $192,000. The rest is interest earned. This is the power of compounding interest; ie, saving nominal amounts of money and letting it grow.

No Car Payment Means You Can Retire EARLY and Be a Millionaire!

What does this mean? If you’re 20 years old and forever shunned getting strapped with a monthly car payment, you could retire at 60 (5-7 years before the standard retirement age) – AND be a millionaire a couple of times over – IF you invested what would have been car payment money.

Work Menial Jobs and Still Retire a Millionaire

Even if you work menial jobs and never make truckloads of money, if you avoid car payments (and other consumer debt) and invest that money, you will never have financial worries.

Social Security isn’t there when it’s time for you to retire? No problem. Employer doesn’t have a 401K plan? No problem, you’ve got it covered.

You’ve socked away over $2.2 million dollars to see you through.

And, because you will have been smart enough to avoid debt traps like car payments, you will probably make other wise money decisions as well, like:

i) buying an home and paying it off early (eg, 15 or 20 years instead of the standard 30);

ii) avoiding credit cards debt (did you know that average American family – with at least one credit card — carries $8,000 to $10,000 in credit-card debt. Source: CardWeb.com);

iii) paying off student loans as soon as possible after graduation and/or not getting them in the first place.

Consider this: In each year between 2000 – 01 and 2006 – 07, an estimated 60% of bachelor’s degree recipients borrowed to fund their education. Average debt per borrower rose 18%, from $19,300 to $22,700 in 2007 dollars over this time period. Average debt per bachelor’s degree recipient increased from $10,600 to $12,400. Source: AMSA.com (American Student Assistance)

While an Ivy League education is great, statistics show that over time, it’s the fact that you actually have a four-year degree and your experience that counts more than the “pedigree of your degree.” Local colleges and universities are cheaper and in many cases, just as good as Ivy League schools.

Invest Potential Auto Payment Money to Grow Wealth

Note: Rate of return depends on type/length of investment. From the beginning of 1970 to the end 2003, the average compounded rate of return for Standard & Poor’s (the S&P 500), including reinvestment of dividends, was roughly 11.7% per year. During same time frame, the highest 12-month rate of return was 64%; the lowest was -39%.

When you consider that most savings accounts pay anywhere from 1-3%, investing your money in the stock market (mutual funds and the like as opposed to single stocks) is one of the best ways to grow wealth.

Imagine Never Having to Worry About Bills – Living the Debt Free Life!

When you have no car credit (eg, no car payments) you’re literally investing in your future. Imagine never having to worry about money; never being saddled with debt; being able to choose work you love and retire in peace, comfort and wealth.

When you have no car credit, you’re doing more than saving money; you’re investing in your peace of mind. You’re investing in a stress-free life. You’re investing in long-term financial security.

At NoCarCredit.com, our mission is simply to keep you out of the trap of auto loan debt (and other consumer debt). We do this by constantly reminding you of what your life will be like if you choose to pay for your cars as you go.

When you forego auto payments, your money can be saved to make you rich, not someone else.

Remember this the next time you’re thinking of buying vs leasing and/or taking out a long-term car loan. No car credit is ideal. However, if you have to take out an auto loan, it should be paid back as quickly as you can (eg, within a year); even if this means sacrificing the type of car you want.

Copyright 2009: NoCarCredit.com. This content may not be reproduced or redistributed without the express written consent of the author. Violators will be prosecuted.