When it comes to lowering your auto premiums, you should know that you’re the one that’s in the driver’s seat. Having adequate car insurance is both prudent and smart, but there’s no question that it adds to the expense of driving. The good news for you is that premiums can vary by hundreds of dollars, depending on several factors. You should review your coverage at the time of renewal to ensure that your insurance is in step with your needs, and follow these practical steps to reduce the bottom line on your auto policy.
You would incur several penalties if you were to drive without car insurance. So, to help you out, we will share the best tips on how to save money on car insurance.
1. Shop around and compare car insurance
There are various car insurance rates in the market, and they vary by hundreds of dollars a year among insurers for the same levels of coverage. That’s why you need to check the rates. A good driver with good credit can help save around $100 a month on average, and this way, they can find the cheapest insurer instead of the most expensive one.
Even drivers with bad credit or a recent at-fault accident can benefit from big savings. These drivers can save around $200 annually if they pick the cheapest insurer on the market instead of the costliest. On average, the rates of the cheapest insurers on the market vary by less than half the rates from the most expensive ones.
However, the company with the cheapest rates in one state can be the most expensive option in another state. Also, the cheapest company for a good driver with a good credit rating may not be the best option for someone with a poor credit rating or a recent accident. To ensure that you’re getting the best rates, you should get quotes from several companies throughout the year.
2. Maintain a good driving record
One of the main ways that car insurance premiums increase is when you get into accidents or accrue a lot of traffic tickets. If you get a ticket, you may be offered the chance to go to traffic school to get the ticket dismissed or reduce the number of violation points on your driving record.
If you manage to get the violation off your driving record, the time that you’re spending in class could help you save hundreds of dollars in insurance premiums over the years.
3. Drop car insurance you don’t need
If you’ve got an older car, you should consider dropping collision and comprehensive insurance; this helps pay for damages to your vehicle. Collision insurance will pay for repair damage to your car if it crashes into another object/vehicle or flips over. Comprehensive insurance, on the other hand, will pay if your car is stolen or damaged by vandalism, storms, or hit by an animal like a deer.
If your car is worth less than your deductible and the amount for your annual coverage, you should think about dropping them. Comprehensive and collision insurance will never pay out more than the actual worth of the car. You need to evaluate whether paying for coverage that may reimburse you only a small amount is worth it.
If you’re dropping collision and comprehensive insurance, you can easily save a lot of money that you can set either set aside for car repairs or a down payment on a newer car, once it’s time to replace your older car.
4. Drive a car that’s cheap to insure
Before you buy your next car, you need to compare car insurance rates for the models you are considering. The vehicle that you’re going to be driving will affect your car insurance premiums, especially if you end up buying collision and comprehensive coverage.
Safe and moderately priced SUVs and minivans are generally cheaper to insure than expensive and flashy cars.
5. Improve Your Credit Score
Your credit score will be a big factor when it comes to car insurance companies calculating how much they should charge you. It may count even more than your driving record in most cases. To improve your credit rating for better car insurance rates, you should focus on the following steps:
- Make all your loan and credit card payments on time
- Keep credit card balance limits below your credit limits
- Open new credit accounts only when necessary. Applying for too many credit cards can hurt your score.
If you manage to improve your credit score, it will improve your chances of getting better insurance rates from insurers.
6. Increase Your Deductible
You can also think about increasing your deductible, as that will help you save on your collision and comprehensive insurance. The deductible is the amount the insurance company doesn’t cover when paying for repairs. For example, if the repair bill is $1,500 and you have a $500 deductible, the insurance company will pay out $1,000. The savings will vary by company, so you should compare quotes with different deductible levels before you decide on an option.
So, there you have it! These are the best ways you can go about when trying to save money on car insurance. Make it a point to get the best car insurance policy out there for you and try to use these tips, which are going to help you out when it comes to getting an auto insurance policy that’s right for you.