Speaker A
Hey everyone, welcome. If you want a car in California, you already know that the costs can feel, well, pretty relentless.
Learn how to save on car loans and insurance in California with expert tips and community-backed strategies.
Key Takeaways
- California’s new insurance minimums increase costs but protect drivers better.
- Driving record is the most important factor for insurance rates in California, not credit score.
- Credit unions generally offer the best car loan rates across credit levels.
- Smart insurance and loan strategies can save Californians thousands of dollars.
- Using the provided playbook and resources empowers consumers to negotiate better deals.
Summary
- California drivers pay 20-28% more for car insurance than the national average.
- New 2025 California law doubles minimum liability insurance requirements to 30/60/15 coverage.
- Credit scores are not used in California insurance premiums; driving record is the key factor.
- Full coverage is typically required for new cars by lenders; used cars may benefit from liability-only coverage based on the 10% rule.
- Car loan rates vary significantly by credit score; dealers offer best rates for scores above 750.
- Credit unions offer the most competitive loan rates for most buyers, especially for used cars and those with lower credit scores.
- Insurance savings tips include bundling policies, maintaining a clean driving record, low mileage discounts, comparing quotes, raising deductibles, and checking eligibility for California’s low-cost auto program.
- Loan savings tips include knowing your credit score, getting preapproved, choosing shorter loan terms, maximizing down payments, and rate shopping within a two-week window.
- Resources for further information include myfinancialprograms.com, the California DMV website, and mylowcostauto.com for assistance programs.
- The video provides a clear playbook to reduce car ownership costs effectively in California.
Full Transcript — Download SRT & Markdown
Speaker A
Today, we're diving into the two biggest expenses you face: your car loan and your insurance. And in the next few minutes, we're going to break down exactly how you can tackle them and hopefully find some serious savings.
Speaker A
Now, just so you know, all the data and insights we're covering today come straight from the fantastic resources over at myfinancialprograms.com.
Speaker A
We've boiled down the research for you, but for a really deep dive into all the numbers and tables, you'll for sure want to check out the link right below this video. So, why are we talking about this right now? Well, for starters,
Speaker A
Californians are already paying a whopping 20 to 28% more for car insurance than the rest of the country.
Speaker A
Ouch. And as if that wasn't enough, a brand new rule change just kicked in that's making things even more complicated.
Speaker A
Here's our game plan. We just touched on the challenge. Next, we're going to decode car insurance, then crack the car loan code. After that, it's all about your smart savings playbook with real steps you can take, and we'll finish up
Speaker A
with what to do next. All right, let's jump right in. Section two, decoding California car insurance. We're going to get a handle on what's new and, more importantly, what it's actually going to cost you. So, here's the big news. As of
Speaker A
January 1st, 2025, California basically doubled its minimum liability requirements. And this is a huge deal. I mean, it's the first time these numbers have gone up in over half a century. So, what do these new numbers actually look
Speaker A
like? Well, you're now required to have at least $30,000 for injuring one person, $60,000 for multiple people, and $15,000 for property damage. In insurance speak, you'll hear this called 30/60/15 coverage. But, and this is really important, think of these new minimums
Speaker A
as the absolute legal floor. Not a smart recommendation. Seriously, one little fender bender with a newer car could easily blow past that $15,000 property limit. And then guess who's on the hook for the rest? You are. All right. So,
Speaker A
with these new rules in the mix, what can you actually expect to pay for insurance on a new car? This table gives you a really solid idea of your monthly premium. Just find your car's value on the left and you can see how the price
Speaker A
changes depending on your coverage from the bare bones liability to full coverage. But you might notice something's missing here. Where is your credit score? That's a super unique California rule we're going to talk about in just a minute. Okay, so that's
Speaker A
new cars, but what if you're buying used? Well, the math changes quite a bit. And the savings here are pretty significant. You can see the monthly premiums for used cars are way lower all across the board. Just to give you an
Speaker A
idea, full coverage on a used car that's under 15 grand is almost half of what you'd pay for a new car worth over $60,000. That's real money back in your pocket. So, how do you choose? Well, for a new car your financing, the choice is
Speaker A
pretty much made for you. Your lender is going to require full coverage. It's also a really good idea to get gap insurance, which covers that gap between what you owe on the loan and what the car is actually worth if it gets
Speaker A
totaled. But for a used car, here's a great rule of thumb, the 10% rule. If the annual cost for your collision and comprehensive coverage is more than 10% of what the car is worth, it might be smarter to just go with liability only.
Speaker A
Okay, let's circle back to that unique California rule I mentioned. Unlike pretty much every other state, insurers here are not allowed to use your credit score when they're calculating your premium. This is a massive win for consumers, and it puts the focus on
Speaker A
something else entirely. So, if credit doesn't matter, what's the number one thing that does? Your driving record.
Speaker A
Simple as that. In California, it is everything. One little ticket or an at-fault accident can jack up your rates for 3 to 5 years. It makes safe driving the absolute best way to keep your insurance costs down. All right, let's
Speaker A
switch gears and move to the second big piece of this puzzle, your car loan.
Speaker A
Getting the right rate here can literally save you thousands of dollars over time. When it comes to new cars, your credit score is king. Just look at the difference here. A score over 750 could land you a rate as low as 5.24%
Speaker A
from a dealer. But if your score drops into the 600s, that same dealer suddenly becomes your most expensive option. So, the takeaway, if you have excellent credit, dealers can be really competitive. If you don't, you need to look elsewhere first. Now, let's look at
Speaker A
used cars. The first thing you'll notice is that rates are higher across the board, which makes shopping around even more crucial. But see that pattern?
Speaker A
Credit unions are consistently the most competitive choice for almost every single credit level. That's because they're nonprofits owned by their members, so they can often pass those savings right on to you. Okay, let's just simplify all of this. Buying new
Speaker A
with a credit score over 750, go ahead and check the dealer's financing options. For pretty much everyone else buying a new car, and for almost everyone buying a used car, your first stop should be a credit union. It's that
Speaker A
simple. They consistently have the best rates for the widest range of people. All right, we've decoded the costs. Now for the best part, the playbook. Let's talk about the concrete steps you can take to lock in a much better deal on
Speaker A
both your insurance and your loan. For insurance, here's your six-point playbook. First, bundle your policies.
Speaker A
Second, and you've heard this before, keep that driving record sparkling clean. Third, if you don't drive a lot, ask for a low mileage discount. Fourth, always get at least three different quotes to compare. Fifth, you can raise your deductible to a thousand bucks. That'll
Speaker A
lower your monthly premium. And finally, check if you qualify for California's low-cost auto program. And for your loan, follow this five-step process. One, know your credit score before you even think about walking into a dealership. Two, get preapproved by a credit union or a
Speaker A
bank. This gives you massive negotiating power. Three, choose the shortest loan term you can comfortably afford. You'll pay way less in interest. Four, put down as much cash as you can for your down payment. And five, and this is a pro
Speaker A
tip, do all of your rate shopping within a two-week window. That way, it only counts as a single inquiry on your credit report. We have covered a lot of ground.
Speaker A
So, for our final section, let's focus on how you can put all this info to work for you, starting like right now. This is really the ultimate question, isn't it? Take a look back at those tables we showed you. Think about what you're
Speaker A
currently paying for your insurance premium and your car loan. Based on what other Californians are paying, are you overpaying? If the answer is yes, or even just maybe, you now have the playbook to fix it. So, to take that
Speaker A
next step, check out these resources. Myfinancialprograms.com has all the original data we covered. The DMV website has all the official state info, and mylowcostauto.com is where you can check if you're eligible for the state's assistance program. Thanks so much for watching.
Topics:California car insurancecar loan ratescar insurance savingscredit unions car loansCalifornia DMVauto insurance minimumscar loan tipslow-cost auto programcar insurance 2025car ownership costs California
