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Look outside your window at the traffic or a parking lot, if there's any in the vicinity. The majority of the cars you see there were purchased either through an auto loan or leased. It's quite rare that people buy new cars using their own money, simply because it's more convenient to use the lending institution's money instead. You can easily get the car you want right now and pay for it later. That's how most things work in this country, and we could argue about the credit basis of the Western society indefinitely if not for its main advantage - convenience. There's just nothing that can beat the convenience of getting what you want exactly when you want it, and for as long as people will like this approach there will be all forms of credits, loans, leases and other financial instruments to serve the purpose. However, when it comes to buying things through credit or loan there are many additional costs to the product you want to buy. In case of financed cars this usually means that besides settling the interest rate on the loan, you will also get higher auto insurance quotes. Sounds unfair? Well, that's the additional cost of getting what you want sooner.

It's not that there's any form of discrimination towards financed car buyers that makes insurance companies set higher rates for them. It all stems from the conditions the lending institutions impose on those using their money. Regardless whether you're using a credit line, loan or leasing the institution you get money for the purchase will impose you to get fully comprehensive auto insurance. This is done to ensure that the money lent to you won't be lost in case of an accident or auto theft. A fully comprehensive policy protects the car in a very wide range of situations and is very useful for protecting the lender's investments. However, it is also the most expensive policy type that delivers the highest auto insurance quotes, that's why so many people complain about expensive insurance after getting a new car. But this doesn't mean that any insurance policy should be expensive when financing a new car.

One of the most common mistakes people make when financing a car is buying auto insurance directly from the lending institution or the car dealer. Sure, it sounds very convenient at the moment as you settle all the paperwork and aren't distracted from enjoying your new car. However, it's quite a common practice for car dealers and lenders to offer overpriced policies because they usually have exclusive contracts with particular insurance providers and get a cut from every policy sold. As a result, you drive off with a policy that is usually more expensive than the competition and realize this only when the due date comes. Fortunately, there's a very simple way to avoid this.

First thing you have to understand is that no one can oblige you to purchase a particular policy from a particular provider at a particular place. While the lending institutions impose a fully comprehensive policy, they never indicate which insurance company should provide it. This means that you can shop around for the most affordable policy by using auto insurance quotes and get the one that's cheaper. Moreover, it's highly recommended to compare auto insurance quotes before you make the purchase in order to compare the quotes you get with the policies offered by the lender or car dealer. In most cases you can easily tell that the latter are overpriced. You can also buy the policy beforehand and take it to the lender to eliminate any talks about insurance outright. This will save both your time and your money, and let you enjoy your new car without worrying about additional paperwork.