Most people complain about the cost of their car insurance, which is not surprising given that a typical policy costs at least several hundred dollars a year. Depending on your age, driving record, and other factors, your annual premium may be significantly higher than that. So how can you lower your premium and save money?
If you own and drive a car, not having insurance is generally not an option. In most states, you are required by law to purchase a minimum amount of liability coverage. And you should probably have more than the bare minimum if you want to give yourself adequate protection. However, there are steps you can take to lower your auto insurance costs without canceling your policy. Some or all of these steps may be appropriate for you, depending on your circumstances.
Specific ways to save money on auto insurance:
1. Shopping around.
One of your first steps should be to shop around. A particularly good time to investigate your alternatives is when your current policy is about to be renewed, especially if you discover that your premium has increased. You may be surprised to learn that auto insurance premiums for the exact same coverage on the same car can vary widely (in the hundreds of dollars) between different insurers, even in states that regulate auto insurance rates.
2. Increase your deductible.
For many people, increasing the deductible on their policy is a good way to reduce the cost of the policy. Sometimes you can lower your annual premium by 10 percent or more by increasing your deductible from, say, $250 to $500. However, if you do this, make sure you have the financial resources to handle the larger deductible when the time comes.
3. Keep an eye on your credit report.
Your credit history is an important factor for most auto insurance companies. Many studies have shown a correlation between your credit history and the risk of an insurance company. Paying your bills on time and maintaining good credit will allow you to enjoy lower auto insurance rates.
4. Drive less.
If you drive less than a certain number of miles in a year (for example, 7,500), you may qualify for a low mileage discount. If your insurer offers this discount, try to limit your driving as much as possible. If you commute to work, use public transportation instead of driving. When you go on vacation, fly or take the train.
5. Do not use your car for commercial purposes.
Since work-related driving typically subjects you to higher premiums than pleasure driving, it may be in your best interest to stop using your car for business purposes.
6. Drive more safely.
You may be eligible for a price reduction on your policy if you maintain a clean driving record for a specified period (usually three years). A clean driving record generally means that there were no accidents, moving violations, drunk driving convictions, etc., during that period. The best way to qualify for the applicable discount is to drive carefully and defensively at all times.
7. Buy a low profile car.
Automobiles are rated on a risk scale for auto insurance purposes. In general, sports cars and other flashy, high-performance vehicles are classified as higher risk because they are common targets for thieves and vandals, and because, statistically, people who own them tend to drive more recklessly. If you own such a vehicle, you’ll likely pay a higher premium than if you owned a pickup truck, sedan, or other low-risk vehicle.
8. Move.
If you live in a rural community with little crime and traffic congestion, your premium will generally be lower than if you live in an urban area where your car is more likely to be stolen, vandalized, or involved in an accident. Of course, you shouldn’t move just to cut your auto insurance costs. However, this may be one of many factors in her decision if she is thinking of moving from the country to the city.
9. Keep your car in a garage.
Cars parked in garages are less likely to be stolen, vandalized, or hit by other vehicles. Using a garage to store your car may entitle you to a slight reduction in premium.
10 Have security/anti-theft devices installed.
CYou may receive discounts on your insurance if your car is equipped with one or more of the following: anti-lock brakes, automatic seat belts, and air bags. Similarly, anti-theft devices such as car alarms and tracking systems (for example, Lojack) can also give you a discount because they reduce the chances of your car being stolen or vandalized.
eleven Learn about multi-family/multi-policy discounts.
You may receive a discount from your insurance company if you buy more than one type of insurance through the same company (for example, auto and home). A discount may also apply to your car insurance if you insure multiple cars under the same policy or with the same company.
12 Other discounts
Other discounts may be available if you meet certain criteria. Examples might include discounts for taking a defensive driving course, being a member of AAA, or staying with the same auto insurance company for multiple years. These discounts vary by company.
Please note that this description/explanation is only intended as a guide.
For more information on auto insurance, visit: Insurance.com