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Program expected to result in higher auto insurance costsPosted On Wed, August 5, 2009
Higher auto insurance rates may be one side effect of the government's Cash for Clunkers program, according to recent reports.
The government program has been so popular that several days after taking effect, there was already concern that its $1 billion budget would be exhausted. Under the plan, drivers can get rebates of up to $4,500 to cash in their older cars for a newer, more fuel efficient one.
However, a recent report in the Columbus Dispatch notes that drivers can still expect some added costs because newer cars simply tend to cost more to insure than older models. Part of the reason for this is that drivers tend to drop things like collision coverage for older vehicles, although the newspaper adds that people who don't face steep insurance increases could still enjoy substantial savings in the form of lower gasoline costs.
The insurance price increases varied considerably by make and model, according to the newspaper. For example, a couple with a new Mercury Mariner is said to be paying $45 more per year in insurance, while the owner of a new Ford pickup truck is reportedly paying $600 more per year than with his old truck.
Still, drivers who shop around for online auto insurance deals can often find an affordable policy, especially if they consider other money-saving tips like checking for any available discounts and maintaining all policies with one insurer.
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