Having car insurance is smart. While this is true, it also adds to the cost of driving.
While insurance must be paid for, there’s no reason to pay more than necessary for this coverage.
If you are wondering how to save money on car insurance, you are in the right place. Here you can learn all about how you can save money on this necessary expense.
Increase the Deductible
When talking to a representative from an auto insurance agency about your coverage, it’s a good idea to discuss how the amount of your deductible will impact what you pay each month.
If you choose a higher deductible, it can help you save a significant amount of money as time passes.
For example, if your current deductible is $250, consider increasing it to $500. If it is $500, increase it to $1,000.
Before making this change, though, be sure you have enough in your emergency fund to cover the new, higher deductible. Also, if you are involved in a small fender bender, you may want to pay for repairs out of pocket. This will help you avoid the possibility of your insurance costs going up.
Usually, minor accidents are around the same price as your deductible anyway. This means you would be paying the same amount no matter what. By paying out of pocket, you don’t have to worry about a rate increase.
Just be sure to get an estimate for repairs from the insurance company first. By doing this, you will know for sure that you have made the right decision.
Shop Around for Car Insurance Coverage
Insurance coverage costs vary from one insurance company to another. Since this is the case, it pays off for you to shop around.
A good rule of thumb is to get a minimum of three quotes. Get these from different companies and different types of companies.
For example, you can find insurance companies that:
You can also ask your friends and family members for insurance recommendations based on their experiences. Make sure to take time to do your own research and learn about the companies before committing, as well.
Take time to understand better how auto insurance works, too. You need enough knowledge to make sure you are asking informed questions to a potential insurer.
Anyone you speak to should take the time to answer your questions and make sure you fully understand what they offer.
Remember, the lowest price is not always going to be the “cheapest” option. You need to choose a reputable company, and that offers quality service.
You can also look at online consumer information sites or the state insurance department to find any complaints. This information will help you find and use the right insurance company for your specific needs.
Ask About Multi-Car Discounts
After getting a quote from an insurance company for insuring one vehicle, you may receive a higher quote than if you were insuring several different vehicles.
Most insurance companies offer a type of “bulk rate” to get your business. In some cases, you get a better deal because you are bringing in more cars for them to insure.
Be sure to ask the insurance company if they offer this. Usually, to qualify for this type of discount, several drivers live at the same residence and are related through marriage or blood.
Sometimes, two people who aren’t related can get a discount, but usually, they have to own a vehicle together.
If there is a teen driver in your house, it will likely cost more for insurance. However, for teens that make good grades (typically Bs or above), or if they are ranked in the top 20% of their class, you may qualify for a good student discount. Usually, this discount can be applied until the child is 25 years old.
Discounts vary based on the company. They can range from just one percent up to 39%. To take advantage of this, you will have to provide proof your child is a good student.
Some companies also provide discounts if you have other policies with the company, too. One example would be your homeowner’s insurance.
Maintain a Safe Driving Record
Accidents and traffic tickets will cause your car insurance premiums to increase. If you receive a ticket, you may be able to attend traffic school to have it dismissed or to reduce the violation points applied to your license.
If you can keep this violation from impacting your driving record with a class, you may save hundreds of dollars over a period of a few years.
Drop Unneeded Coverage
Watch out for unnecessary coverage, such as premium or GAP insurance. These things will add up and cause your rates to increase. However, they do not offer any additional value beyond what full coverage does.
It may also be possible for you to drop comprehensive and collision coverage if you have your vehicle paid off or if you have enough money in the bank to cover the cost of replacing it. If you have a vehicle that is more than a decade old, chances are insurers won’t even offer these coverages due to the reduced value of the vehicle.
While cutting back on the above coverages is fine, you should not reduce your liability insurance.
Medical costs and repairs can cost a lot of money if you are involved in an accident. If the cost exceeds what your insurance policy covers, you will be required to pay the rest.
Because of this, most experts recommend having a minimum of $500K in liability insurance. This ensures you are fully protected.
Don’t worry; liability coverage is affordable. While it may impact your rate slightly, you can offset the costs by reducing the other coverages mentioned above that aren’t needed.
Consider Getting a Difference Vehicle
In some situations, changing the type of vehicle you drive can help reduce your insurance costs. Insurance companies will track the type of car model, the color of your car, and more when determining insurance costs.
This is because certain types and colors of cars have been statistically proven to be involved in more accidents than others.
If you have purchased a higher-end or luxury vehicle, it is more likely to be stolen or broken into. Sports cars with a lot of horsepower will also be more likely to be involved in an accident, too.
It has also been proven that red vehicles are the most likely to be involved in an accident.
The most affordable cars to insure are usually larger sport utility vehicles. That’s because these are non-flashy, stable vehicles.
If you have noticed your insurance premiums are causing serious problems for your budget, regardless of the company you use, you should think about trading it in for something more affordable and safer.
Compare Insurance Costs Before Making a Purchase
The cost of your auto insurance will be based, in part, on the price of your car, how much it is to repair, and its safety record. Some insurers provide discounts if you install features that reduce the likelihood of theft or personal injuries.
If you are looking at different vehicles to purchase, find out how much they will cost to insure, too. This is going to help you decide which option is best for your budget.
Enroll in a Defensive Driving Class
In some situations, insurance companies offer discounts for anyone who takes and completes a defensive driving course. You may also be able to reduce the points on your license (as mentioned above) by taking this course.
Be sure that you ask your insurance company or agent about the discount before signing up for a class. You need to make sure the savings will be worth it.
Take Steps to Improve Your Credit
Did you know your credit can impact how much you pay for insurance? In some situations, it will count more than your driving record.
Take time to improve your credit to get better insurance rates. Some tips to help you with this include:
By taking these steps, you can begin to improve your credit rating, which may help reduce your auto insurance rates.
Change the Way You Pay Your Insurance Premiums
Insurance companies want you to make their job easier. If you do this, you may even receive lower premiums and more discounts.
One way to do this is by changing when and how you pay your insurance premiums.
Some options you can choose that may result in lower fees include:
Pay the Premium in Full
Rather than paying your insurance each month, pay your insurance six months or a year at a time. It is usually always going to be cheaper to do it this way.
That’s because the insurance company doesn’t have to spend money to process a payment each month.
A helpful tip is to put a little money into your savings account every month so you can pay the bill when it is due.
Set Up Automatic Payments
Some insurance companies provide discounts if you go paperless and pay automatically. Also, you will not have to worry about missing any payments and have one less piece of mail to deal with.
This makes it a win-win scenario.
Also, be sure you put back the funds before your payment is due. This will ensure your automatic payment does not cause an overdraft in your account.
Pay in Advance
Don’t wait to pay your insurance premiums. Some insurers will give you a discount if you pay your premium a month or more early. At the very least, when you pay early, it means you don’t have to deal with late fees.
Pay as You Go
If you don’t drive often, there is no need to pay as much for insurance.
If you travel less or commute, you can get significant discounts.
Those who drive a lot should try to reduce how much and how often they drive. You can do this by moving closer to work, using public transportation, or carpooling with your coworkers.
Review Your Current Coverage
Dropping some types of coverage can be risky. It’s impossible to determine when an accident will occur. Nevada requires high-risk drivers to carry an sr22 insurance Nevada after a serious offense.
However, if you drive an older vehicle that doesn’t have much life left in it, it may make sense to drop some coverage, as mentioned above.
One reason for this is that your insurance company will probably just total the vehicle if you are involved in an accident. Also, your deductible may be more than what the car is worth.
Keep this in mind and review your coverage to see if this is the case.
Now You Know How to Save Money on Car Insurance
If you are interested in learning how to save money on car insurance, the tips and information above should help you. These tips are proven to reduce insurance costs effectively.
Keep in mind that each insurance company is different, so you will need to talk with them about what they will and will not do.
Are you interested in even more information about different topics, such as technology, travel, health, business, and more? If so, make sure you take time to check out some of the other blogs on our site. We post often to help keep you informed.