You might not think of your car as an investment, but depending on what you pay for your insurance and the value of your car, it can be. A depreciating asset. Auto insurance is one of the more expensive annual costs of owning a car, especially if you have a newer model or something with high sentimental value. That makes finding ways to save money on auto insurance an important part of any budget. However, there are some tricks and tips you can use to keep those costs down.
It pays to shop around and see if you can get a better deal elsewhere, depending on your circumstances. Depending on the state you live in and the type of car you drive, there could be big differences in cost between providers.
Just as with any insurance policy, it’s worth ensuring that you’re not being overcharged for hidden extras and other add-ons. That said, given that you won’t be able to afford to pay out of pocket for repairs or new wheels if something happens to them, getting cheaper auto insurance is still very much worth your time.
This article will give you advice on how to save money on auto insurance. For instance, you have to compare quotes from different companies, including both local agents and online providers; switching to a deductible that’s lower than your current one; choosing a company that offers cheaper rates after meeting certain criteria; getting multiple quotes instead of just one, and taking advantage of special discounts when available and below are some ways to do that.
20 Tip to save money on auto insurance
1. Shop around for your car insurance
The first step you take to save money on auto insurance is to shop for auto insurance companies. Get quotes from at least three different auto insurance companies, and compare and contrast them, so you know the one suitable for you based on their prices, policies, and services they offer to their customer.
Ask family and friends about their experiences with different insurance policies and companies. Understand auto insurance, ask questions from your prospective insurer, and ensure you are satisfied with how well your questions were answered.
While putting all your research together to decide, have in mind that the cheapest option might not be the best. The insurance company you choose should offer you policies and coverage you are comfortable with.
So, in essence, while looking for a cheap insurance company, it should be one that offers the best policies at an affordable price.
2. Before you buy a car, compare insurance costs
Auto insurance premiums are based on the price of the car, the cost to repair it, the possibility of theft, and the overall safety record. So when you want to buy a car, consider all these as it is a factor that either increases or reduces the price you will pay to insure your car.
3. Be a Safe Driver
Be mindful of your driving, and pay attention to the road to reduce auto accidents to the barest minimum. As auto accidents are one reason auto insurance companies raise their rates, most insurance companies offer their safe drivers up to 10% – 23% discount depending on your good driving record.
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4. Pass the Defensive Driving Course
Auto insurance companies offer discounts to drivers who pass the defensive driving course. The defensive driving course is set to reduce the risk of auto accidents by educating the driver properly to be more cautious and make good judgments while driving with other road users.
So passing this course means the insured driver has learned how to reduce accidents which will be beneficial to the insurer if the driver doesn’t crash their car as they will not have to pay for claims.
5. Drop the car insurance you don’t need
If you have a worn-out car, it will be better to drop the comprehensive and collision insurance on it. Comprehensive insurance covers claims of a stolen car, vandalism, damage by storm, or hitting an animal. While collision insurance covers up the damage if your car collides into another one or flips over.
It’s time to drop off the collision and comprehensive insurance if your car is worth less than your deductible. Examine if it’s worth paying for coverage that will reimburse you only a small amount if anything happens.
Please make sure you put aside the money you would have paid for your worn-out car insurance so that you can put it to good use.
6. Take advantage of car insurance discounts
Every insurance company offers different ways to save as you insure your car. Check your insurance company discount page and review your possible savings. They offer discounts for customers’ loyalty, driver history, vehicle features, affiliations, etc.
7. Use public transport
The more you drive your car, the more you pay insurance, just like some insurance companies charge per mile. When you sign up for insurance, you will be asked a series of questions, including how often you use your car.
To reduce the charge, take the public transport as often as possible to reduce your auto insurance rate. Before you start taking the public transport, make sure you know how your insurer charge so you don’t get to waste your time.
8. Tell your Insurance Company where you work
Some insurance companies offer discounts to their customers based on where they work. For example, if you work as a responder, you may be given a discount. So it’s important to let your insurer know where you work if there is a discount for those working in a specific place.
9. Preferred Parking
If you park your car securely overnight, its probability of being stolen, stripped, or broken into will be reduced. This means that your insurer would not have to pay for the comprehensive coverage. For this reason, some insurance company offers their drivers discount when they park in a residential driveway or a secured facility.
10. Good students
This offer helps students improve their studies as they offer discounts to students with good grades. Most students enjoy this offer because you save money as you improve your studies. Parents also encourage their students to do better to get a discount. A B is the minimum grade for most companies that can earn you a discount, so you have to work harder in your studies to save money.
11. Keep your credit score high
Most customers don’t know that their credit score also plays a significant role in the price of their auto insurance. Insurers make use of credit to determine your price. So if you pay your bills on time (car payments, rent, or mortgage), your score remains high, leading to a reduction in the price of your insurer.
12. Buy an insurance-friendly vehicle
Many people want to get the latest ride in town without checking what it will cost to insure the car, and this is a big mistake most drivers make.
To reduce the insurance rate, you can buy a reliable used car. You can also call your insurance company to know the rate of each car you wish to buy.
13. Improve on how you pay premiums
Most companies love it when you make their work easier and for this reason, you will be given a discount.
For example, you get a discount when you pay your premiums in full instead of the regular monthly payments. You don’t charge for processing your every month as the processing charge will be done once, saving you the monthly charges.
Another way to improve how you pay premiums to get discounts is by setting an automatic payment. Some insurers will give you discounts for having a smooth automatic payment.
Pay in advance: you mustn’t wait till your premium expires to pay. You can renew before the previous month’s subscription comes to an end. Insurance companies appreciate this method of payment with a discount. So to get a fee reduction, make sure to pay in advance.
14. Bundle your policies
If you own multiple cars, bundling those policies together can help you reduce the fee to about 10% – 15% depending on the insurer. It also helps reduce the number of paperwork you have to go through. So it’s a win-win.
15. Shop rate with an agency
You and your parents can still be insured by the same company. If that was your first insurance company, you might not be aware that there are other, better, and sometimes less expensive options. Because buying insurance is quite complicated and stressful, most people renew their policy when their insurance company issues a renewal notice.
Some agencies that make use of AI can help you find the best rates. If you insure your car through an agency, they will help you find the best rates and offers. Then, after every renewal, those agents again help you check if you are paying the best and lowest rates.
16. Increase your deductibles
Deductibles are what you pay before you get coverage on your claims. For instance, if you have an accident and the cost of the repairs is $2000. If you have a $400 deductible, you pay $400 while the insurance company will pay the remaining $1600.
Most people don’t know that choosing a low deductible will only amount to an increase in the premium they pay monthly, but they instead focus on thinking of the big repair cost after an accident.
If your startup has a low deductible, your insurer will have to increase the price of your premium monthly to offset your bills in the case of an accident.
We suggest you start up with a higher deductible to enjoy lower premiums.
17. Review your Coverage
Most people still pay high premiums because their coverage is still on ‘teen drivers’. And as we know, teen drivers pay more for coverage due to their driving mode. So once you are above the teen driver’s age, you have to change your policy to pay a lesser premium monthly.
You should also update your insurance company if you move to a new environment, get married, or sold a vehicle.
Some of these factors also increase the price of coverage we pay. So always review your coverage at least once a year to check out your recent activity that could give a reduction in your insurance rates.
18. Accurately predict your mileage
It is important you calculate the number of miles you drive. Report to your company if you had a job change, frequently use the mass transit, or any other factor that reduces the distance you drive. You reduce the risk of being involved in an accident the less you drive. So low mileage reduces the cost of your coverage to those who drive a long mile daily.
Insurance companies offer discounts to people who drive less or own cars that are driven occasionally. This discount is a way to save up money and reduce your chances of having an accident.
19. Don’t Always Make a Claim
Suppose you get into a minor accident that didn’t include other people’s property, it’s not a good idea to call your insurance company first. Go to the store and know how much it costs to fix your repairs. If it is below your deductible, then there is no need to make a claim.
Some customers will always pick up the phone and call the insurance company once any little thing happens to their car, not minding that they are creating a bad driving record for themselves which will, in turn, lead to a higher premium charge.
20. Install Anti-Theft Devices
Insurance companies reduce your yearly premium rate once the anti-theft device is installed in your vehicle.
These devices like car alarms and LoJacks in your car will reduce the chances of it being stolen. Inquire from your insurer which device will reduce your rates more if installed.
With this device, your insurer won’t have to worry much about the car being stolen since you will be notified before it happens, thereby reducing some part of your coverage. In turn, they reduce your premium rate.
Saving money is a fantastic benefit for driving your car. You’re in control of how much you spend on auto insurance and can make smart choices to save on premiums. Your costs will depend on your type of coverage, your driving history, age, and other factors.
If you’re willing to give up some accident or injury benefits, for example, you may save on your monthly premium and yearly costs. We’ve listed 20 tips on how to save money from auto insurance. Make your choice and enjoy your ride.