Does a repossession affect auto insurance rates?
You might wonder whether a repossession affects auto insurance rates. Repo insurance costs will be around 124% higher than those without a repo on their record since insurers consider drivers with repos as high risk. However, you can still find cheap coverage from the top insurance companies for repos below.
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Michael Leotta
Insurance Operations Specialist
Michael earned a degree in Business Management degree with an insurance focus, which led to a successful 25-year career in insurance claims operations and support. He possesses a high-level of business acumen across multiple areas of the insurance industry. Over the course of his career, he served in multiple roles supporting claims operations including: Claims Specialist, Claims Trainer, Claim Au...
Insurance Operations Specialist
UPDATED: Dec 6, 2023
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Dec 6, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- You can get auto insurance after a repossession but it’s expensive
- Bad credit after a repo may cause insurers to consider you high risk
- Review your credit report before buying a car or getting coverage
Many people ask, “Does a repo affect my car insurance?” The short answer to this question is that it will probably raise insurance on a repossessed vehicle.
Your credit is one of many factors that affect auto insurance rates since underwriters use an insured’s credit score to determine financial responsibility. Managing a personal credit file is a necessity.
It’s possible to obtain auto insurance after a car repossession, though it’s likely you’ll pay higher auto insurance rates. That’s why it’s important to compare your existing auto insurance quotes with those of other competitive insurance companies.
Enter your ZIP code to get FREE quotes from multiple auto insurers, even if you have a repo on your record.
How a Vehicle Repossession Impacts Your Auto Insurance Rates
Your premium will increase after a repo. Not everyone with a low credit score is inherently irresponsible, of course. If you’ve lost a job, suffered through a financially devastating divorce or death of a spouse, or if you’ve been forced to work at a job that pays less than your monthly payments owed, you aren’t purposefully being financially irresponsible.
Unemployment and underemployment statistics show a significant number of Americans aren’t able to earn enough money to pay their bills.
Unfortunately, an insurance company won’t often make a qualitative assessment of your financial responsibility.
An insurance underwriter will quote higher auto insurance rates to insure your vehicle, home, or assets than another person with a better credit score. In their mind, a repossession shows that you’re high-risk for auto insurance.
Some insurance companies know that economic conditions are tough, and they’re willing to offer auto insurance to individuals who’ve experienced a vehicle repossession. However, auto insurance will cost more after a repossession.
After you’ve reacquired the vehicle or obtained a new one, do everything possible to strengthen your credit score.
Seek credit counseling if you’re unemployed or in bad financial straits. Let creditors know you’re doing what’s necessary to rebuild your credit and demonstrate financial responsibility.
Repossession of an auto that you need for daily life and work is a nightmare. Before your car is repoed, do what you can to work out an agreeable payment arrangement with your bank or financing agency.
Most financial institutions understand that economic times are tough for many people, and they’re usually willing to help keep you on the road.
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How Your FICO Score Impacts Auto Insurance Rates
Most bills and outstanding revolving loans that you pay each month report to the three major credit bureaus: Experian, TransUnion, and Equifax. Public information about each person’s financial history is also accessed by the three credit reporting organizations.
How bad does a repo affect my credit? If you’ve suffered an auto repossession, you know it’s devastating personally and financially. Some auto insurance companies won’t even offer an auto insurance quote if you’ve lost a vehicle through repossession.
Auto insurance customers with poor credit can expect to pay up to 60% more on their premiums😱! Has your credit increased recently📈? Get updated auto insurance quotes here: https://t.co/27f1xf131D! Learn more about what affects insurance rates👉: https://t.co/1ZJQo5P2Di. pic.twitter.com/biYj1tyf3H
— AutoInsurance.org (@AutoInsurance) February 28, 2023
Insurance companies use your FICO credit score to help determine financial responsibility. A credit file that shows you’re late paying bills and financial obligations is likely to cause the company to approach your application with more caution compared to someone with a higher credit score.
Understanding why a repossession affects auto insurance rates involves studies conducted by insurance companies about consumer financial behavior.
People with a responsible attitude towards financial obligations tend to demonstrate responsibility and care in other parts of life, too. Financial responsibility can reflect responsible homeownership, auto care, and driving.
Insurance companies conclude that a financially responsible person is less likely to be at fault in a car accident.
That’s why insurance companies conclude that a person’s credit history can help to predict their driving record. Drivers with good credit are statistically better risks for the insurance company’s underwriters.
Other Factors Affecting Auto Insurance Rates
We’ve gone over how repossession affects your credit and insurance rates, but what else?
In addition to your FICO credit score, insurance companies evaluate your age, driving history, and the vehicle you plan to insure, including how old it is and the make and model.
Some auto makes and models cost less to insure. Insurance companies consult their claims payment records to determine what to charge.
Unfortunately, a good driver with a bad credit history will pay more for auto insurance. A good driver with an auto repossession on their credit file will certainly pay higher auto insurance rates.
How to View Your Credit Report
It’s a good idea to review your credit report prior to purchasing a new or used auto, or prior to applying for auto insurance.
Many credit reports have errors, so it’s wise to let the credit reporting organizations know you contest errors on your credit report.
Obtain a free copy of your credit report from each of the credit reporting agencies each year, or, when unemployed or receiving government financial assistance, obtain your credit report several times per year for free.
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More About Auto Insurance Rates After a Reposession
An auto repossession is a disheartening occurrence. Know that obtaining comparative auto insurance quotes from a variety of insurance companies is your best bet in paying the lowest possible amount for the auto insurance you need.
If you’ve had a reposesssion, don’t let it stop you from getting the best rates. Ready to buy car insurance after a repossession? Start now by entering your ZIP code to get FREE car insurance quotes after a repossession from the best auto insurance companies.
Frequently Asked Questions
Does a repossession affect auto insurance rates?
Yes, a repossession can affect your auto insurance rates. Insurance companies may consider you high-risk and charge higher premiums if you have a repossession on your record.
How does my FICO score impact my auto insurance rates?
Auto insurance underwriters use your FICO credit score to determine financial responsibility. A lower credit score, often caused by a repossession, can result in higher insurance rates.
How does a vehicle repossession raise your auto insurance rates?
A repossession indicates financial instability and is seen as a high-risk factor by insurance companies. As a result, they may quote higher auto insurance rates for vehicles with a repossession history.
What other factors affect my auto insurance rates?
In addition to credit score and repossession, insurance companies consider factors such as your age, driving history, and the vehicle you plan to insure when determining your auto insurance rates.
Can you make a repossessed auto insurance claim?
No, you cannot make an insurance claim for a repossessed vehicle. However, it’s important to maintain auto insurance coverage on the vehicle until it’s sold at auction or resolved, as you may still be responsible for any damages.
What happens when a damaged car is repossessed?
When a damaged car is repossessed, it’s typically sold at auction. The lender uses the proceeds to offset the outstanding debt, and the borrower remains responsible for any remaining balance.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Michael Leotta
Insurance Operations Specialist
Michael earned a degree in Business Management degree with an insurance focus, which led to a successful 25-year career in insurance claims operations and support. He possesses a high-level of business acumen across multiple areas of the insurance industry. Over the course of his career, he served in multiple roles supporting claims operations including: Claims Specialist, Claims Trainer, Claim Au...
Insurance Operations Specialist
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.