It’s not always easy to save money on car insurance. Rates vary by company, so it can be hard to find the right one. There are a lot of factors that go into figuring out how much you’ll have to pay. Where you live, the kind of car you drive, and your driving record all play a role in your car insurance premiums.
Follow these steps to keep your car insurance costs low and get the best rates available to you to benefit your savings accounts.
Understand the Different Car Insurance Types
When shopping for car insurance, it’s essential to understand the different types of coverage available. The most common types of car insurance are liability, comprehensive, and collision coverage.
Liability coverage
Liability car insurance covers damage to other people or property if you are responsible for an accident. It is required in most states and is typically the cheapest type of car insurance.
Comprehensive coverage
Comprehensive car insurance covers damage to your car from accidents, theft, vandalism, and other events. It is not required in most states, but it is a good idea if you live in a high-crime area or if your car is worth a lot.
Collision coverage
Collision car insurance covers accidental damage to your car. It is also not required in most states but can be a good investment depending on how much your vehicle is worth. If you’re financing or leasing a car, the lender may require you to have a collision coverage policy.
Consider Your Driving History and Age
Your driving history is critical when determining the cost of your car insurance premiums. Typically, people who have received traffic violations or caused accidents will pay higher car insurance rates than those who haven’t received any infractions behind the wheel.
Young drivers pay more for car insurance because they have less driving experience, and statistics show they are more likely to get into car accidents. Drivers 16 to 19 years old are three times more likely to be in a car accident than drivers older than 20.
Find Out Which Discounts You Qualify For
You’ll also want to find out what discounts you may qualify for. These discounts could save you a lot of money on your premiums. Some of the most common deals include:
Multi-policy discount
If you combine your auto, home, and life insurance with the same provider, you may qualify for a discounted rate.
Defensive driver discount
You may qualify for this discount if you’ve taken a defensive driving course.
Good student discount
If you’re a good student, you may qualify for a discount on your premiums. This program operates on the assumption that a student who achieves good grades academically is more responsible, resulting in a lower risk when driving.
Senior citizen discount
If you’re over the age of 55, you may qualify for a senior citizen discount.
Early payment discount
If you pay your premiums in full for six months, you may save on insurance costs.
Review Your Current Policy
When it comes to saving on car insurance, you want to ensure you’re getting the most value out of your current policy. Taking a closer look at your policy may help you decide whether to stop or increase various coverage and move from a higher deductible to a lower deductible to broaden your financial protection.
A thorough auto insurance review might help you save money while alerting you to insufficient coverage that puts you and your car at risk.
Compare Rates from Multiple Providers
Insurers use various methods to calculate rates. It’s worth comparing car insurance quotes from various providers before deciding who to buy coverage from. You should collect at least nine estimates from three types of providers.
Gather three estimates from insurance firms with agents such as State Farm and Allstate. Then collect three quotes from three independent insurance agents.
Independent agents work with multiple firms, so they’ll help you broaden your search. Finally, collect three quotes from direct-to-consumer auto insurance companies, such as GEICO and Progressive.
Own a Smaller Car
Some insurers offer discounts if you purchase a hybrid or alternative fuel car. Farmers, for example, offer a 5% discount.
You can feel good about conserving energy while also reducing your insurance premiums. Shop around to assess the rates of insuring various energy-saving cars before investing in one.
Report Decreased Driving Distances
In general, people who drive less than 7,500 miles per year get a low-mileage discount on their car insurance. Drivers who spend less time on the road save an average of $86 per year on car insurance compared to those who drive more.
Turn to Usage-Based Insurance
If you are a low-mileage driver and do not abuse your car, you may be able to save money on your car insurance by using a pay-per-mile program. Allstate, Progressive, and State Farm are companies that offer this service.
Install Anti-Theft Devices in Your Car
If you have anti-theft devices in your vehicle, you may save money on your annual premiums. It’s hard to know whether a device may lower your rates until you contact your insurance provider and ask.
If your primary goal in installing an anti-theft device is to lower your insurance premium, consider whether the expense of doing so will be significant enough to justify the effort and cost. Ask if your insurance company offers any potential reductions for specific equipment when installed. Two devices that might help save money on insurance premiums are car alarms and LoJacks.
Think About Your Location
You’ll rarely move to a new state because it has cheaper automobile insurance premiums. When planning a relocation, though, the prospective change in your auto insurance premium is something you should consider.
For instance, the average car insurance rate for minimum coverage in New York is $867.00. Whereas in Georgia, the average rate for minimum coverage is $684.00. The cost of insurance premiums in a state typically depends on the accident rate in that region.
Is Mass Transit an Option?
If you use your car to commute three hours to work every day, you will almost certainly pay more insurance premiums than someone who only drives one mile each day. If feasible, try using mass transit rather than driving to rack up fewer miles and potentially receive a discount.
Save on Your Car Insurance Today
These suggestions should put you on the right track to reducing your car insurance costs so you can save more. Finding the best auto insurance policy might be as simple as comparing a few different companies.
Finance is us is here to assist you in making educated insurance decisions. We can help you with your auto, life, and home insurance. Check out our online resources for all your insurance needs.
Disclaimer: All content on this site is information of a general nature and does not address the circumstances of any particular entity or individual, nor is the information a substitute for professional financial advice and services.
