We all know how expensive car insurance can be. With insurance premiums rising and more policies being introduced it can be tough to find an affordable policy without compromising on coverage. But this doesn’t have to be the case. Here are 20 tips to help you save money on car insurance and potentially save hundreds of dollars per year.
From finding the right insurance company to taking advantage of discounts and incentives, these tips will help you avoid paying more than you should. We’ll also cover advice on cutting your car insurance costs, such as optional coverage and shopping around for the best deal.
The following are 20 clever ways to save money on car insurance you did not know about.
1. Drive safely
Whether you want to save money on car insurance or not, driving safely is the first and most effective way to keep your auto coverage cost in check. This is a good practice as it reduces road rages and accident rates on the road.
In addition to being safe, your insurance company will compensate you with a reduced insurance rate for acting responsibly on the road.
2. Shop around for cheaper auto rates
One of the best ways to save money on car insurance is to shop around for better rates. A big mistake a lot of car owners make is to call one company and sign up without checking its competitors. This is not the right way to lower the cost of your auto insurance. You need to compare a lot of quotes in order to save money.
Insurance companies do not use the same algorithms when calculating your rates. For this reason, some events are given more weight than others across multiple insurance providers.
Getting more quotes allows you to compare different insurance providers and pick the most affordable one.
3. Do not pay insurance for cars you don’t use
Are you paying insurance on a car that is not needed? If so, you may consider stopping this insurance to save money.
There is no reason for paying insurance on a car that will sit in your garage for 6 months or more without using it.
4. Improve your credit score
Many insurance companies give a discount when you have a good credit score and excellent credit history. This is because a good credit score shows that you are financially responsible and more likely to make your payments on time and drive safely. For this reason, start building your credit and improve your credit score if you are planning to buy a car in the near future.
Learn more: What is a good credit score to buy a car?
5. Use pay-per-mile programs
Instead of having insurance all year round, consider getting pay-per-mile insurance. This type of insurance will work for you if you do not drive around that much. You will only pay insurance for miles you drove.
You might also like: How to save money on gas?
6. Save money on car insurance by increasing your deductible
One way to save money on car insurance is to increase your deductible. The deductible amount is the out-of-pocket money you will need to pay before your insurance provider pays money on the car. In other words, having a high deductible means that you are willing to pay more out of pocket in case there is a claim. As a result, you get rewarded with a lower auto premium.
7. Use electronic payment and e-delivery services
Many insurance providers offer discounts to customers who use electronic payments and receive documents electronically. It is important to always remember that those monthly statements you get in the mail cost money in printing, paper, and shipping. Someone has to pay for that service and that person will be you.
Assuming that your insurance provider offers discounts for e-delivery services, you can easily start saving money on car insurance by signing up. Contact your agent to sign up for electronic communication or make the changes in your account online to start saving money right away.
8. Avoid sports car
Typically, sport car insurances are very expensive. Insurance companies think that drivers of sports cars tend to be young and prone to speeding.
Driving too fast on the road will lead to accidents. As you know, insurance companies do not like accidents. That is why all insurance companies like safer and responsible drivers who never get into accidents. That is why sport cars insurances are usually expensive.
To manage how much you spend on car insurance and keep it affordable, avoid sports cars.
9. Buy cheaper-to-insure car models
Car insurances vary based on many factors. One of those factors is the model of the car. If you want to save money on car insurance, buy a car model that charges less money on the insurance.
Just do your research before you buy the car. You can also call insurance companies to see if the model you want to buy will save you money.
10. Do not buy a new car
Never buy a new car if you want to save money on insurance. Not only that you pay a lot of money to buy the car, but also it cost you a lot in coverage.
First, you will need full coverage on a new car which will be in hundreds of dollars. In other words, the higher the value of the car, the more protection you need.
Second, new cars have higher values. Insurance companies pay a lot of money to replace or fix these cars when they get into accidents. For this reason, they will charge you more money for insurance.
Instead of buying a new car, buy a used one. You will pay less money to buy a used car and save a lot on insurance.
Related: Why is it a bad idea to buy a new car?
11. Combine multiple insurances (auto, house, farm, etc)
You can save money on insurance by combining multiple insurance policies. Your insurance provider does not want to see you use a different provider on other assets you own. That is why insurance companies give you a discounted rate when you bundle your assets under one policy.
For example, you can combine your car, house, farm, and equipment insurance.
12. Have your profile updated once a traffic violation ticket is off your record
Your insurance premium will go up every time you have a traffic violation ticket or when you get into an accident. These charges do not stay on your record forever.
For example, your traffic ticket will probably fall off your record after 3 years. That means you could qualify for an insurance reduction once your ticket is no longer on your record, depending on your policy terms.
Whenever your traffic violation is taken off your records, make sure that your car insurance is also updated based on the terms of your policy.
13. Pay your insurance for many months at a time
Insurance companies have many options you can use to pay your bills. For example, you can pay month by month or pay for six months at once.
You will save money when you choose to pay for more months in advance. For example, if you could pay around $1,200 in six months when you pay month to month; your payment total could be reduced to $800 when you choose to make a full payment for those six months at once.
14. Consider a group plan
There are insurance providers who give discounts for group plans. For example, your insurer can give you a discount because you work at a particular company or you graduated from a particular school.
15. Do not tell your insurer that you drive a lot
The more time you spend on the road, the more chances you will get into an accident.
Insurance companies like people who pay for insurance and never drive their cars. Regardless of how much you drive, do not say that you drive a lot. You will pay more on your insurance for driving a lot.
Report your commute distance on the paperwork as little as possible. At the same time, keep your numbers reasonable.
16. Avoid big cars. Instead, buy smaller hybrids instead
In some cases, it is expensive to insure larger cars compared to smaller ones. The insurance you pay could be affected by the weight of the car. This is because bigger and heavier cars tend to get damaged more, according to Serenity Insurance.
At the same time, having fuel-saving cars and hybrid can save you money. For example, Farmers Insurance provides discounts on electric and gasoline hybrid vehicles.
17. Are you moving to another state?
You could pay lower insurance if you are moving to another state that has lower premiums. Do not insure all your cars if you are moving soon.
Your partner and you can use one car before you move if your schedules allow it. This way you can save money on the insurance while waiting to pay less in the state you are moving to.
18. Save money on car insurance by using anti-theft systems
There are some insurance providers who will give you a discount when you have anti-theft devices in your car. A good example is Geico which gives a 25% vehicle equipment discount for having an anti-theft system.
19. Use student discount to save money on car insurance
If you are a student, ask your insurance provider for student discounts.
You may not save a lot but every little bit will help.
20. Get a veteran and military discount
Some insurance providers give discounts to veterans and active-duty personnel.
Ask your agent if there are discounts you are qualified for.
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Thanks for the tip that getting a group plan can help making car insurance more affordable. Since my husband and I have workplaces that are far from each other, I think it would be best for us to have our own respective cars someday. Getting a group plan for both of them would probably make the monthly payments a bit more lenient for our finances.
Thank you for stopping by, Alice. I am glad you found the article helpful.