Do you cringe every time you get your car insurance bill? If so, you’re not alone. Many drivers feel the same way about their auto insurance costs. If you’re looking for ways to bring down your bills, read on to see 10 ways to lower your auto insurance costs.
With the cost of new cars, insurance premiums, and general maintenance expenses on the rise, more Americans than ever are struggling to afford car ownership. As a result, many people choose to lease or share a vehicle instead of buying one outright. If you’re one of the many people who plan to lease or share your car in order to reduce your auto expenses in the long term, you may be worried about how this will impact your insurance coverage.
Reserving a smaller car will make your premiums cheaper in most cases. However, what if the car that comes with a smaller premium is something like a bright yellow Minima or an oversized Hummer? Would you still go ahead and buy it?
If that sounds like something you would do, then be in the know about how much money people save on their auto insurance by making certain choices when they buy a car.
Fortunately, there are ways to lower your auto insurance costs, even if you plan on leasing or sharing a car from time to time. Here is some information about different types of car ownership and the impact they have on your insurance premiums.
10 ways to lower your auto insurance costs
If you’re a driver, you know how expensive auto insurance can be. The average annual premium for standard coverage is currently more than $1,200. Of course, different factors affect your cost. If you live in a city or have a history of accidents, your premium will reflect that. But there are ways to lower your auto insurance costs and decrease the amount you pay each month. Let’s take a look at some potential strategies for lowering your premium costs.
1. Drive Safely
Paying for auto insurance is expensive on it’s own, as it can cost at least $1,630 per year and $136 per month, on average. In situations where you experience accidents or moving violations, the amount you pay for auto insurance is ridiculously expensive. Nobody enjoys paying a heavy amount for insurance, and as such, ways to reduce your expenses are essential. One of the ways to reduce your auto insurance is avoiding accidents and exceeding caution while driving. Why?
As you know, accidents lead to more bills, and less accident means less expenses, keeping your auto insurance at a minimum. Another solution is avoiding moving violations. You might have been avoiding them before now, you can also try to be more careful, but if you’ve not been avoiding them before now, you can start avoiding more violations to your record henceforth. You might be worried thinking that you’ve already had recent moving violations, but time is on your side. You can have your moving violations dropped if you keep a clean record of t least 3 years or at least(for some companies). So always drive safe, as being a safe driver will have your money.
2. Buy an Insurance Friendly Car
This advice might not be practical for those who have no intention of buying a new car right now, but this information can come in handy when you are ready to get a new car. When you are ready to get a new car, you should consider buying an auto-insurance-friendly car.
You might wonder what the kind of car has to do with your insurance, but the kind of car you drive can indeed make a big difference in your auto insurance premium. Cars such as sporty cars naturally cost more for insurance. Due to their coat value, some vehicles carry higher insurance charges than others.
For instance, the cost of your collision is bound to rise in accordance with the value of the vehicle. Some cars that do not require expensive insurance include:
- Subaru Outback
- Subaru Forester
- Honda CR-V
- Jeep Wrangler
- Mazda CX-5
- Ford Escape
- Honda Pilot
- Chevrolet Equinox
- Ford F-150
- Hyundai Tucson
Some cars that require expensive insurance include:
- Audi R8
- BMW i8
- Nissan GT-R
- Maserati Ghibli
- Mercedes – AMG GT
- Mercedes Benz S-Class
- Porsche 911
- Tesla Model A
- BMW 7-Series
Another piece of advice you should consider is choosing cars with a lot of safety features. Cars with lots of safety features can help you lower your insurance premiums. If you are unsure what safety features are required, you can get a list of safety features that will help you reduce your car insurance from your auto insurance company and incorporate them into your car. Some safety equipment that can help reduce your auto insurance includes a security system, passenger and rear seat airbags, and anti-lock brakes.
3)Take Defensive Driving Course
This measure is quite beneficial to those whose driving record is below average. Completing a defensive course is likely to help you obtain a discount from your auto insurance company.
While taking the defensive driving course, make sure to calculate the cost so as you don’t spend more than the discount offered by your auto insurance. If, however, the course takes up your savings for only a year, it is still beneficial as you’ll get a discount for years thereafter.
4) Explore Car Insurance Discounts
Most Insurance companies offer Good-drivers discounts to their customers with clean driving history, and taking advantage of this offer will go a long way to reduce your auto insurance cost. As long as you do not have traffic violations, you can save money. It’s just like being rewarded for keeping yourself safe! So make good use of the offer and drive safely.
Some discounts offer that can help you save money on auto insurance includes:
1. Good Student Discount
Just like the good driver discount, this offer can help students save money on auto insurance. Good grades are all you need to save money. Some companies offer an 8 to 25% discount to full-time high school or college students. With this discount, you can pay less for auto insurance and channel the money to other needs.
2. Multi-Car Discount
If you have more than one car, it is best to insure them with the same auto company, as you are likely to enjoy the multi-car discount. Most companies offer up to 8% to 25% discount to customers who insure more than one vehicle, so with this, you can save more and spend less.
3. New Car discount
This works for people driving a car less than 3 years old. Companies offer up to 10%to 15% discount to qualified customers.
5) Increase Your Deductible
What is a Car Insurance Deductible?
This refers to the amount taken out of your insurance on file, a comprehensive or collision insurance claim. That is to say that auto insurance deductible is what you pay on a claim before your insurance covers the rest.
The amount you pay as deductibles varies according to the policy you choose, if your deductible is high, your premium gets low, but if your deductible is low, you pay a high premium.
When you pay a high deductible, the cost encountered in the case of filing a claim is reduced. For example, if you increase your deductible from $200 to $500, the coat of collision and comprehensive insurance is reduced by 30 percent. Then if the deductible increases from $500 to $1000, you can save 40% on auto insurance.
6) Shop Around before choosing Your Auto Insurance Company
The same way you shop around for bargains on clothes, household items, and other purchases, that’s the same way you should shop around for the auto insurance policy/plan that works best for you. Whether you are insuring your car for the first time or you are renewing your auto insurance, comparing rates from several auto insurance companies is beneficial.
Some auto insurance companies offer better policies/plans, and some offer beneficial discounts, while others offer convenience. So knowing the one that fits your need is essential. Concerning your desire to save money on auto insurance, it is important to compare quotes from various companies to determine the ones that offer cheaper insurance, like companies that offer discounts and cheap insurance plans.
The industry-backed Insurance Information Institute advises individuals to obtain quotes from at least three different insurance companies, comparing the cost, policies, and accessible plans. Some Auto Insurance Company that offer cheap auto insurance includes USAA, Geico, State Farm, etc.
Learn more about Companies that offer cheap rates.
7) Move Closer to Work
Another practical step you can take to reduce your auto insurance cost is moving closer to your workplace/ office. While taking up o insurance, you’d be asked the average miles your daily round-trip covers; the reason for this question is to ascertain the cost of your auto insurance premium.
So staying close to work or school can help you lower your cost, as the shorter your daily road trip commutes, the lower your auto insurance premium. This is because if your workplace is close to your home, you will have fewer road trips, and fewer road trips will likely result in a reduction in the price of your premiums.
More so, moving closer to work can also be beneficial for those being insured by companies that offer pay-per-mile plans, such as Metromile. So if you are driving less, you pay less. The problem with companies that offer pay-per-mile is that they have a limited coverage area, that is to say, this option might not be available in your state.
However, if the Mileage option is available in your state, do well to take advantage of the drive less, pay less plan.
8) Take advantage of the Group Insurance Plan
Some Auto Insurance companies offer discounts to drivers who I sure their cars are through a group plan, which is likely to be from the employer’s plan or through business or alumni associations. How does group auto insurance work? Companies, mainly large companies provide group options for auto insurance, this insurance covers the firm’s employees, and as such, an employee under the company can apply for insurance through the company’s group.
If the insurance company offers group plans, you can get a discount. Similarly, individuals under alumni or professional groups can apply for group insurance. Some companies, like Geico, offer up to %8 discount to alumni of some schools. In cases where your employer or alumni group does not offer auto group insurance, you can ask them to request one.
Even if your company offers group auto insurance, note that not every employee may be eligible for this plan. Requirements; it may include working for a stipulated amount of hours weekly, having a fixed tenure with the company, or handling a specific position. This might also apply to some other groups, so do well to make enquires to know if you are eligible for the auto insurance group plan.
9) Use Mass Transit
In relation to how many miles you cover daily, occasionally using mass transit can be beneficial. When you drive your car every day to work, you will generally pay more premium than someone who drives less, especially those using the Mileage plan. To reduce cost, you can use mass transit instead of driving every day. This way, you save more money on auto insurance.
10) Improve Your Credit Rating
You might be surprised to know that your driver’s record can determine your auto insurance cost. Why is this? Companies consider a person with a previous bad driving record as one who can include more accidents and moving violations. This cost the company lots of money. So in order to avoid this, it is wise to main a good credit rating, as it can significantly decrease your insurance cost by as much as %24.
If you’re shopping for auto insurance, you’ll see that prices vary widely from company to company. Auto insurers are in business to make money, so they charge whatever price they think will result in the greatest profit.
You can reduce the amount you pay by following the above-listed ways to lower your auto insurance costs.