Does it seem like your car insurance premium gets higher and higher?
Instead of continuing to pay the high price without question, work to lower your costs. Whether you stop paying for full coverage or work to improve your credit score, you can use these tricks to lower your auto insurance premiums.
Comparison Shop Prices
The best way to save money on your auto insurance policy is to comparison shop prices with different car insurance companies. I have found wide fluctuations in car insurance rates between different insurance carriers. Don't just stick with your current company. Try to shop at least 3 different insurance providers. It's an easy way to lower your bill and get a better rate.
You can either ask an insurance agent who's a broker for multiple insurance companies to shop prices for you, or you can call agents or visit the company website to get quotes.
Make sure you get quotes for the exact same coverage so you can compare prices correctly.
Stop Paying for Full Coverage
If your car is paid off (and you can afford to buy another car), consider dropping your full coverage insurance and just carrying liability coverage. You especially want to do this if you have an older car.
Dropping to your full coverage insurance can save you a lot of money. In fact, it may drop your insurance by 50% or more.
Be sure to ask your agent to run a quote both with and without collision coverage to see if the cost savings is worth the additional risk.
Choose to Buy a Car with Lower Premiums
Did you know that many car companies penalize those who drive a less expensive or certain type of car? It's unfair, but often true. Plus, some cars are more expensive to repair than others and have higher premiums because of this.
You want to carefully research how much a car will cost to insurance before you make a purchase.
Bundle Your Insurance
Another great way to save is to bundle your car insurance with your homeowners or renters insurance. Or, you can get a discount for having multiple cars on a policy.
Many companies are willing to offer you a discount when you bundle. Check around and see which company is willing to offer the best deal. In the process, you may even save money on your home insurance.
I usually shop for both home and auto insurance at the same time and pick the company that has the best price combined. However, I am currently with 2 different companies, since that's what has worked out the cheapest for us the last couple of years.
Improve Your Credit Score
Your credit score can have a big impact on the amount you pay for car insurance.
You want to work to improve your credit and get a good credit score as much as possible so you can get a lower rate. Check your credit report and lower your credit card balances, increase your debt to income ratio, etc to improve your credit history.
Doing this before you research the cost through other companies will ensure you're offered the best price.
Maintain a Good Driving Record
If you have a perfect driving record or have taken a defensive driving course, mention this when getting quotes from other companies. You can also mention this when asking for a lower price from your current provider.
The longer you can maintain a good driving record, the better price you can get.
Allow the Insurance Company to Monitor Your Usage
Many insurance companies will give you a discount if you allow them to monitor how you drive. Some will install a device in the car and others will have you install their app on your phone.
My insurance company had us install the device for a period of about 3 months and tracked whether we stayed within the speed limits and whether we did hard braking on a regular basis. We then earned a discount for good driving habits on our next coverage period.
Increase Your Deductible
Ask to increase the deductible on collision and comprehensive coverage on your insurance if you have enough in your emergency fund to cover it. Do be aware that if you have an accident (or have damage to your car), you will have to pay more out of pocket due to your higher deductible.
If you're in a position where you rarely drive your car though, there's less likely a chance that you'll have an accident.
Park in the Garage
Ask your insurer if they give discounts for parking in the garage. Ours does since it protects our cars from theft, vandalism, and damage (like from spring Texas hail storms).
Ask About Affinity Group Discounts
Do you belong to any groups, like a graduate of a university or a professional organization? Ask the car insurance company if they have any affinity discounts and list any groups you're a member of.
Be a Good Student
If you have a teen driver in high school or college students, you may be able to get discounts if they're a good student and get good grades.
Pay a 6 or 12-month Premium in Full
It may be convenient to pay your insurance premiums monthly, but you're usually paying fees for these monthly payments. If you can scrape together the full 6-month or annual premium the first time, you can save money during your policy period.
Then, you can add your "monthly" insurance premium to your insurance sinking fund so you have the money to pay the full premium the next time it's due.
Ask about Discounts for Features
Does your car have anti-lock brakes and air bags? Or maybe it has anti-theft devices? You could even get a discount for having a new car. As a general rule, auto insurance companies will give discounts for these safety features.
You don't have to pay a lot of money for insurance. There are so many easy things you can do to lower your costs. Whether you drop your full coverage or increase your deductible, you can save a lot of money
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