10 Quick ways to save money on car insurance
Insurance is a great way to protect what you value, but you shouldn’t overspend on it. Millions of Americans are overpaying for their auto insurance. It is possible that you are also overpaying and you can benefit from learning how to save money on car insurance. Here are some tips and ideas on how to reduce your auto premiums.
1. Get multiple quotes
Car insurance rates for the same level of coverage can vary by hundreds of dollars a year. Every insurance company has its algorithms for calculating insurance premiums. Going for a low-priced insurance company is not always the best decision because you have to consider the company’s creditworthiness before signing any deal. But you may be surprised by how much identical insurance policies from different reliable companies can vary.
To save money and still get the best coverage, you will have to look at the quotes from dozens of insurance companies before choosing the one that works best for you. You should review your insurance policy every two years. Maybe your life has changed, or there are some new companies with affordable rates since you bought your current insurance policy. By getting multiple quotes and switching insurance carriers after some time, you can save hundreds of dollars every year.
2. Combine insurance policies with one carrier
Look for an insurance company that gives discounts to customers that have more than one insurance policy with their company. If you have a homeowner’s insurance policy and life insurance policy, ask your auto insurance company how much you can save by combining all the three insurance policies. Bundling all your insurance policies at one company can save you more than 10% on all your coverage.
3. Take defensive driving
Completing an approved defensive driving course makes you qualify for some discounts. Taking a defensive driving course is a quick and simple way to save $100 or more every year on auto insurance. These classes will also help you avoid accidents in the future, which will help you save more money. They teach drivers how to react during high-risk situations that are likely to end up in collisions. They can help reduce the risk of injuries, car damages, and save your life.
4. Raise your credit score
Many car owners struggling with high auto insurance premiums don’t know that they can save some dollars by just raising their credit score. Your credit score is one of the many factors insurance companies consider when determining your monthly insurance premiums. The higher your credit score, the better.
There are some techniques you can use to raise your credit score, but none of them works overnight. Paying all your bills on time can have an impact on your auto insurance. You should also review your credit score every year and take corrective actions if it has some errors.
5. Raise your deductible
Raising your policy deductions is an easy way to reduce your auto insurance monthly premiums. However, you need to know that the more you raise your deductibles, the more you will have to pay in case of an accident. Raising your deductible from $500 to $1,000 will reduce the monthly premiums allowing you to save more money in the long run.
6. Remove collision coverage if your car is old
If your car’s cash or trade-in value is less than $1,000, going with liability coverage only can help you save some money. The value of the car is negligible, and in case of an accident, you may consider replacing it instead of repairing it. Don’t throw out your hard-earned money trying to insure a car worth less than $1,000 against collision damages.
7. Pay your annual premiums at once
If you pay monthly, quarterly, or semiannually, you are likely paying an additional fee for this convenience. If possible, save up the premiums and pay once a year. For a person whose annual premium is $1,000, each payment plan charges a fee of $10 a payment. Paying the $1,000 once will help the person save the monthly $10 additional fee. At the end of the year, the person will have saved more than 100 dollars.
8. Use mass transit
When signing up for insurance, the company will provide you with a questionnaire. One of the many questions you will have to answer is how many miles you drive the car you want to insure.
If you are using your car to commute to work for three hours every day, you will pay more insurance premiums than a person who is driving one mile a day. If and when possible, use mass transit to rack up fewer miles. For you not to put effort into something that won’t help you, ask the company about the different mileage thresholds available.
People driving for fewer miles in a year should opt for the pay-as-you-go auto insurance policies. Most insurance companies offering this policy have a flat rate of between $40 to $70. Remember, when you sign up for the pay-as-you-go, your insurer will install a telemetric device in your car to help them monitor how much you drive, how well you drive, and when you drive.
9. Research before buying a new car
Insurance premiums differ from one car to another depending on the car’s price, safety record, and repair cost. The insurance company will offer you some discounts if your car has safety features that help reduce the risk of car theft, car accidents, and personal injury.
The price of your car has a great impact on the insurance premiums you are to pay. The more expensive your car is, the higher the insurance premiums you will have to pay. Before buying a new car, consider consulting your potential insurer.
10. Speak to your agent
We have not exhausted all the potential ways of saving money on auto insurance. Speak to your agent and ask for other ways. Some insurance companies may be offering discounts for cars with anti-theft devices such as car alarms and LoJack’s. Installing these devices can help you save up to 25% of your insurance premiums. The insurance company may also be offering special discounts to employees of certain companies and military personnel. Talking to your agent will provide you with other great ways of saving money on car insurance.