Auto insurance. If you drive, you’re required to have it. How can you pay less for auto insurance?
With so many companies and options for you to choose from, you might feel slightly overwhelmed (to say the least) when trying to lower your auto insurance.
Here are some of the best tips that will allow you to get some better deals when shopping for insurance.
How You Can Pay Less for Auto Insurance: Top 10 Tips
1. Shop for auto insurance at least once a year.
Times change, and so do insurance premiums. If you don’t regularly shop for auto insurance, you might be paying more than you should be. If you have an insurance agent that shops multiple companies, you can simply check with them to see if rates have changed and if there are any better deals out on the market. If you’re extra bold, you might check every six months for better deals. Yes, rates can change that quickly!
2. Raise your deductibles.
If you have the emergency fund to stomach higher costs if you’re in an accident (or if life happens and a tree falls on your vehicle), you might consider raising your deductibles. You’ll pay more if something unfortunate happens to your vehicle, but you’ll pay less on your insurance premiums.
If you have three to six months of expenses in an emergency fund, by all means raise your deductibles! Some have estimated that raising your deductible on your collision and comprehensive coverages from $200 to $1,000 can decrease your premiums by at least 40 percent!
3. Don’t pay monthly – pay semi-annually.
When you pay monthly for your auto insurance, you’re probably paying a fee for the privilege. Instead of paying extra money to not pay up front, try saving up money for when your six-month premium rolls around and pay it then. You’ll save loads of cash!
While you’re at it, use your cash back debit card to save even more money!
4. Practice safe driving!
This one seems like a no-brainer, but do you really do it? Do you really:
- Go the speed limit?
- Wear your seatbelt?
- Use your blinkers every time?
- Look over your shoulder when you make turns?
- Check your exterior lights every once in awhile to see if they’re operating correctly?
Following safe driving protocols will help you avoid accidents and save you money on your insurance premiums. Some auto insurance companies look three to five years back in your driving history to see any accidents you might have had. Remember this next time you’re on the road!
5. Combine policies.
You may save money if you combine policies under the roof of one company. Do you need life or home insurance as well? Combine your policies and ask for a discount. Who knows how much you’ll save!
6. Eliminate unnecessary coverage.
Let’s say you have a car valued at $2,000. It’s not anything special, but you cover it with collision just in case you run into something and damage your car. Is that really a good idea? If you practice safe driving and are expecting to replace your car if it’s damaged anyway, why are you paying for the premium? On the other hand, you might find collision coverage a really good deal, and purchase it anyway.
Collision isn’t the only coverage you might consider unnecessary. How about roadside assistance? There might be other add-ons on your policy that you might want to remove. Be sure to look through your policy’s fine print to ensure you have the right amount of coverage for you.
7. Pay less when you drive less.
Some auto insurance companies allow you to pay less when you’re driving your vehicle less. Maybe you’re working from home now or retired and no longer need regular coverage. Check with your insurance company and find out if they can offer you a better deal.
8. Find safety gear discounts.
You might qualify for a discount if you have air bags, antilock brakes, automatic seat belts, etc. It also helps to have an approved alarm system or other anti-theft devices – this can save you on your comprehensive coverage.
9. Install a vehicle tracker device.
Some insurance companies such as Progressive offer a device you can install in your car to track miles traveled, time of day traveled, and speed. This data is uploaded to the insurance company for analysis after which they offer you a discount on your insurance based on your driving habits. For those of you who aren’t scared to share this part of your life with your insurance company, it’s a win-win!
10. Be a loyal customer once you have a great deal.
If you already have a great deal, it might pay off to stick with the same company for a long while. Insurance companies end up charging less when you’ve been a long time customer, so try not to switch companies without a really good reason!
That’s how you pay less for auto insurance in a nutshell! How much money will you save? Take these tips and implement them to find out, you’ll be glad you did.
How do you save money on auto insurance? Leave a comment below!
I recently raised my deductible to save a decent amount of money off of my premiums. As for paying annually instead of monthly, I think you need to take into account what percentage they are charging for financing and what kind of percentage you get on other investments or by paying off other debts. In my case the insurance financing rate was low enough that I’d rather keep my money somewhere else. Also regarding #10, while a company may reward loyalty, it might be worth occasionally shopping around to ensure you really are getting the best rate.
Eliminating unnecessary coverage and shopping rates annually are extremely important. I run into people that have been with the same company for 20+ years and never shop rates. Low and behold they’re getting RIPPED a new one.
Before I started shopping for car insurance every year I was overpaying to the tune of $1100 a year. Of course I’ve remedied that situation, switched providers, and also only paid for coverage that I needed now. If only I could go back in time, however, and switch before I wasted so much money. Thankfully I wised up when I did.
Get good grades in high school and college. Most places will keep good student discounts until your 25.
Driving safely is definitely the best way to save! :) Some companies will reward you for being loyal, others for switching from a top competitor. Do some research and find which way works best for you!