Finance

How to Save Money on Your Car Insurance

How to Save Money on Your Car Insurance

If you own a vehicle, you will have to have car insurance according to state laws. While insurance is an unavoidable expense, it doesn’t have to be expensive. There are several ways that you can bring down your premiums and save money on your car insurance premiums. 

Insurance companies are all about calculating risk. Your premiums will largely depend on your driving history and the age of your car. However, those aren’t the only factors that determine your premium rates.

If you are looking to find the cheapest car insurance rates, you need to beware of what you are getting. The lowest insurance price doesn’t always give you the best coverage, so you must do your research when shopping for auto insurance. Let’s take a closer look at a few ways that you can save money on your car insurance.

Bundle

Insurance companies are interested in bringing in more business through their customers. If you choose to bundle your insurance policies with one provider, you are more likely to save money on your premiums. Bundling your life, home, and car insurance with one provider can reduce the number of your overall insurance costs

Shop Around

If you have been using the same insurance provider for many years and you are not happy with your premiums, it might be time to shop around. Not all insurance providers are created equally, so it’s important to do your research if you are shopping for a new provider. Take a close look at the details of what is offered for each policy, the available discounts, and your overall savings. 

Increase Your Deductible

Choosing a higher deductible can save you money on your monthly premiums. If you have a deductible of $500 and you bump it up to $1,000, you could potentially save up to 40% on your monthly premiums. With a higher deductible, you are committing to pay more out of pocket should you need to make a claim. While this saves you annually, you still need to ensure that you can afford to pay the higher premium if you end up having to make a claim. 

Ask About Discounts

Insurance companies aren’t generally forthcoming about the discounts that they have available for their clients. While they may use a general discount as a marketing strategy, more discounts are generally available upon inquiry. Insurance companies often offer common discounts, including:

  • Military discount
  • Senior discount
  • Safe driving discount
  • Loyal customer discount
  • Low mileage discount

Good Credit Score

When an insurance company calculates your premium rates, they use your credit score as one of the determining factors. Those with a higher credit score generally receive a larger discount on their insurance rates. It’s important to retain a good credit score and check it a few times a year to make sure that you correct any errors that show on your report that could affect your overall score.

Annual Rate Review

Many policyholders find that their insurance rates seem to increase each year, even when they haven’t made any claims. If you are tired of your rates going up, doing an annual review can help you save money. Take a look at a few other insurance providers to see if you can get better rates elsewhere. Review your rates with your broker and let them know that you will be shopping around, and they may be more flexible with your premiums.

Vehicle Choice

If you are shopping for a new car, you need to consider the potential costs of your insurance. Depending on the model year, make, and style, your insurance costs could vary. For example, your insurance rates on a slick sports car will likely be higher than on a fortified SUV or family sedan. If you want to get the best rates, talk to your insurance broker about what type of cars are the cheapest on insurance. 

Reduced Mileage

Let your broker know if you have changed jobs or are not driving as much as you were when you started your insurance policy. The less mileage that you drive on average can impact how much you pay for your premiums. You could save up to 10% when you let your insurance company know that you have reduced your mileage. 

Review Your Coverage

The level of coverage that you choose to hold in your policy will affect the cost of your premiums. If you currently have a minimum of liability insurance that protects you if you injure someone or cause damage to a property, it could cost you more to pay out of pocket than if you increase your coverage. If you have another vehicle that you can use while your car is being repaired after an accident, you can drop the rental car coverage and save on your overall premiums. If you have a national auto club policy with AAA, you can drop your roadside assistance rider. As your circumstances change, always make sure to update your policy.

If you are looking to save some money on your car insurance premiums, try some of these tips to help you get the right coverage at an affordable price. 

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