The 17 Tips and Ideas for Cutting Car Insurance Costs

Car insurance is required to protect you as a person but your finances while driving. Whether you only have basic liability insurance or full auto coverage, it’s critical to make sure you’re getting the best deal possible. Do you want to know how to get cheaper car insurance? Here are 17 ways to save money on car insurance.

What Is the Cost of Car Insurance?

Car insurance costs vary depending on the state you live in, the insurance company you choose, and the type of coverage you have. However, knowing what the average driver pays for car insurance can help you save money.

According to the most recent data from the National Association of Insurance Commissioners, the average person spent $1,190 on car insurance in 2018. (NAIC)

 According to NAIC data, car insurance premiums increased by 30% between 2014 and 2018, despite the fact that the number of insured vehicles increased by only 7%.

The average cost of car insurance for new vehicles in 2020 will be slightly higher, at $1,202 per year, this is according to AAA data.
The figures are fairly close, implying that when budgeting for a new car, you may need to include $100 or so per month for auto insurance.

How to Save on Car Insurance Costs

There are several methods you can use to save money on car insurance. Once you’ve determined how much car insurance you’ll need, you can put some or all of these strategies to use.

1. Accurately Declare The Value Of Your Car

If you overestimate the vehicle’s true value, you may end up paying a higher premium than is necessary. Therefore accurately declaring the right value of your car will help you cut down unnecessary over charge.

2. Look Around For Lower Car Insurance Rates

If your policy is about to expire and your annual premium has risen significantly, consider shopping around for quotes from competing companies.

Remember that cheap doesn’t always mean good, and going with the cheapest company isn’t always the best choice. This is due to the fact that the insurer’s creditworthiness must also be considered. After all, what good is a policy if the company lacks the resources to pay an insurance claim?

Consider using a site that rates the financial strength of insurance companies to conduct a background check on a specific insurer. The financial strength of your insurance company is important, but you should also understand what your contract covers.

3. Extend your search

You must get in touch with Direct Line and Aviva directly if you want to compare quotes since they do not appear on any car insurance price comparison websites.

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4. Review Your Coverage

Dropping certain types of coverage can be dangerous. After all, no one can predict whether or not an accident will occur. However, if you are driving an extremely old vehicle that is on its last legs, it may make sense to drop collision or comprehensive coverage (depending on the cost, your driving record, and other factors).

The reason for this is that if the vehicle is involved in an accident, the insurance company will almost certainly total the vehicle. If the car is only worth $1,000 and collision insurance is $500 per year, it may not be worth it to buy it.

5. Increase Your Deductibles

When purchasing car insurance, you typically have the option of selecting a deductible, which is the amount of money you must pay before insurance will cover the costs in the event of an accident, theft, or other types of vehicle damage. Deductibles typically range between $250 and $1,000, depending on the policy. The catch is that, in general, the lower the deductible, the higher the annual premium.

6. Speak To Your Agent

It is important to note that, in addition to the cost savings described in this article, there may be others. In fact, it’s often a good idea to inquire about any special discounts the company provides, such as for military personnel or employees of a specific company. You never know what kind of discount pricing is available for your specific situation.

7. Research Additional Discounts

Insurance companies offer a wide variety of discounts. Look for discounts like these:

  • Agreements to receive e-bills and documentation Offers to pay the entire annual or six-month premium at once
  • Memberships in specific organizations or groups that provide discounts

A long list of possible discounts should not sway you. Compare discounts and regular prices from various insurers.

8. Improve Your Credit Rating

A driver’s driving record is an important factor in determining auto insurance costs. After all, it stands to reason that an accident-prone driver would cost the insurance company a lot of money. Many people are surprised to learn that insurance companies may consider credit ratings when determining insurance premiums.

9. Make use of Multi-Car Discounts

If you request a quote from an auto insurance company to insure a single vehicle, you may end up paying more per vehicle than if you inquired about insuring multiple drivers or vehicles with that company. Because they want your business, insurance companies will offer what amounts to a bulk rate. In some cases, they are willing to give you a discount if you bring in more of it.

To find out if you are eligible, ask your insurance agent. Multiple drivers must generally reside at the same address and be related by blood or marriage. Two unrelated people may also be eligible for a discount; however, they must usually jointly own the vehicle.

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You should prepare to pay more for insurance if one of your drivers is under the age of 25. However, if your child’s grades are B or higher, or if they rank in the top 20% of their class, you may be able to get a good student discount on the coverage, which typically lasts until your child turns 25. These discounts can range from 1% to 39%, so make sure to show your insurance agent proof that your teen is a good student.

In addition, if you keep other policies with the company, like homeowners insurance, some companies might offer you a discount on your auto insurance. For example, Allstate offers a 10% for insurance discount and a 25% homeowners insurance discount when you bundle the two, so check to see if such discounts are available and applicable.

10. Downsize Your Vehicle

While purchasing a large SUV may sound appealing, insuring a 5,000-pound, top-of-the-line vehicle can be more expensive than insuring a small (but safe) lower-cost commuter car. Some insurance companies will provide a discount if you purchase a hybrid or alternative fuel vehicle. Farmers, for example, provides a 5% discount.

While saving money on insurance, you can feel good about helping the environment. Before making a purchase, find out the exact rates for the various vehicles you’re considering.

11. Pay Attention To The Road

To put it another way, drive cautiously. This should go without saying, but in this day and age of increasing in-car distractions, it bears repeating. The more cautious you are, the fewer accidents or moving violations you will be able to avoid, raising your insurance rates. Travelers provides safe driver discounts ranging from 10% to 23%, depending on your driving record.

12. Take A Defensive Driving Course

Insurance companies will sometimes give you a discount if you take an approved defensive driving course. Drivers who enroll in accident prevention, defensive driving, or other courses can reduce the number of points on their license.

Be sure to enquire about this discount before enrolling in a course with your agent or insurance provider. After all, it’s critical that the time and money spent on the course result in a significant insurance savings. It is also critical that the driver enroll in an accredited course. Every state has its own rules regarding accredited defensive driving courses, and GEICO’s website allows you to view them by state.

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13. Get Discounts for Installing Anti-Theft Devices

Individuals who install anti-theft technology devices may be able to reduce their annual premiums. For example, GEICO offers a “potential savings” of 25% if your car has an anti-theft system.

Which particular devices can lower premiums when installed should be clear to you from your insurance provider. Car alarms and LoJacks are two types of devices you should look into.

If lowering your insurance premium is your primary motivation for installing an anti-theft device, consider whether the cost of adding the device will result in a significant enough savings to justify the trouble and expense.

14. Switch to Pay-as-You-Go Insurance

If you’re a safe, low-mileage driver, a usage-based insurance program (also known as black box insurance) such as Allstate’s Drivewise, Progressive’s Snapshot, or State Farm‘s Drive Safe & Save may be available to you.

By enrolling in these programs, you authorize your insurer to track your driving via a telemetric device installed in your vehicle in exchange for possible discounts based on how much you drive, when you drive, and how well you drive. If you drive less than 10,000 miles per year, you could save money with this type of program.

15. Ditch Coverage You May Not Need 

Some policy features, like roadside assistance and rental car coverage, you might not need. Go over your insurance policy line by line and inquire about removing anything you don’t need.

Check with your credit card company to see if they provide roadside assistance benefits to cardholders, which may allow you to remove this feature from your auto insurance policy.

 16. Use Mass Transit

When you sign up for insurance, the company will usually start with a questionnaire. It may inquire how many miles you drive the insured vehicle per year.
If you drive three hours to work every day, your insurance premiums will be higher than if you only drive one mile per day. If possible, use public transportation to reduce your mileage, but keep in mind that you will usually have to significantly reduce your mileage before receiving a discount.

17. Avoid modifications

Adding spoilers, alloy wheels, or increasing engine size will almost always increase your premium (and minimize your reputation in the eyes of your fellow man).

In conclusion

The cost of auto insurance is likely to rise further in the future. However, there are numerous things you can do to alleviate the pain. These 15 pointers should get you started in the right direction. Remember to compare the best car insurance companies to find one that meets your coverage requirements and budget.

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