Here in America, the average annual cost of car insurance is no less than $1,592 per year. That works out to about $133 coming out of your account every month.
With stats like this, it’s clear that the vast majority of the population is overpaying for their auto coverage. From increased rates due to past claims to unnecessary add-ons, the cost of your coverage can be confusing and overwhelming.
That’s why so many Americans simply pay their monthly bill without even trying to get their rates lowered. Luckily, this won’t be you.
When it comes to how to save money on car insurance, we’ve got you covered. Follow along to discover the secrets to landing cheap car insurance with these simple and actionable tips.
Do Your Homework and Shop Around
Before you sign up with any insurance provider, make sure you know exactly what you are agreeing to. Get familiar with the different types of car insurance and what you truly need for your automobile. It’s easy to get talked into upgrades and extra features, but if you don’t need them, you’re just wasting your money.
It’s also important to not just jump on the first insurance provider you call. Take some time to compare rates and don’t be afraid to tell providers you’re looking into your options. You never know, they may pull out a little extra incentive to boost their chances of gaining you as a client.
While the large insurance companies tend to be the easy choice, they aren’t necessarily offering the best rates for your needs. By checking out the little guys, you might be able to swing a deal that only family and friends normally have access to.
When in doubt, turn to an auto insurance agency for help. These agencies help you find the best deal around without all the hassle of calling providers and gathering confusing information. No matter your history, they’ll work hard to ensure you get the most affordable auto insurance options possible.
Ask About Discounts
If you are already insured, give your policy provider a call and ask them about the discounts available to you. Believe it or not, there are a number of little perks to enjoy that you may be missing out on simply because you didn’t know they were there.
Many insurance companies offer discounts for things like:
- Members of roadside assistance programs such as AAA
- Certain occupations and job titles
- Service for the military
- Students with upstanding grades
- Senior citizens
- Vehicles with added safety features
- Drivers who park their car indoors
- Loyalty bonuses
- No-claim bonuses
While some of these discounts may be minor, every little bonus adds up to save you money.
Increase Your Deductible
When you sign up for your coverage policy, they’ll ask you what you would like your deductible to be. Usually, they’ll suggest a $500 deductible in which most drivers agree to without knowing a whole lot about it.
You see, a deductible is the amount of money you would have to pay before the insurance would kick in in the event of an accident or other claim. For example, let’s say the damage on your vehicle from a hit and run adds up to $3,000. If your deductible is $500, you’ll pay this upfront, and insurance will cover the other $2,500.
The reason most people choose a low deductible is that they don’t want to pay much money out of pocket if they were to make a claim. Of course, the thing they are forgetting here is that they may be paying as much, if not more, by paying an increased premium.
Because the insurance company needs to recoup the costs of those high-ticket claims, they’ll charge you more the lower your deductible is. At the end of the day, you could be paying hundreds of dollars extra for a low deductible and never use it anyway.
Instead, consider opening up a savings account and stashing away the equivalent of your deductible for emergencies. This way, you can pay a lower premium and still have the money available if anything were to happen.
Cut Out Extras
If buying car insurance overwhelms you, we’re willing to bet that you don’t fully understand what you agreed to when you signed your contract. Unfortunately, those sweet-talking salesmen are mighty good at convincing unknowing drivers that they need a whole lot more than they actually do.
The most common unnecessary extra is opting for premium coverage when basic full coverage is nearly the same. While there may be slightly better perks on that premium plan, they often aren’t worth the price tag. If you see this cheeky phrase on your bill, it’s time for a ‘downgrade’.
In addition, options like collision and comprehensive coverage may not be worth it either. If your vehicle is getting up there in years or you’ve fully paid it off, these claims may not add a lot of value to your policy.
If your vehicle is valued low, you won’t receive a whole lot of money back from your comprehensive claim anyways. This defeats the purpose of paying high premiums for added security.
On the other hand, one thing you never want to drop is your liability insurance. Without it, you could be held responsible for some insanely high medical and repair bills. We recommend carrying at least $500,000 in liability insurance – fortunately, it’s usually the most affordable option.
Shop Insurance-Friendly Vehicles
If you’re in the market for a new vehicle, keep cheap auto insurance top of mind before buying. Believe it or not, some cars are just cheaper to insure than others. Whether it’s due to their safety features or track record, these 10 cars are currently rated the most affordable options for insurance.
In addition to buying the models on this list, there are a few ways you can steer yourself towards affordable insurance.
First, shop used instead of new. Because new cars are so expensive, your premium will be high to offset the amount of coverage you’ll need. Beyond this, most of us will take on a lofty loan to buy those fancy new wheels. These loans require you have the top insurance possible, running up your monthly bills even more.
Of course, you don’t want to go too old either as these vehicles become unreliable and mechanic bound.
Aim for a used vehicle that’s 4-10 years old to secure yourself an affordable rate without the risk of buying a lemon. Bonus points for keeping things realistic with your size. If you don’t need a 6 seater hummer, don’t waste your coin. The smaller the vehicle, the more affordable your insurance will be.
Change Your Payment Method
Insurance companies love customers who are on top of their bills. In fact, they’ll even reward you for doing so with some pretty sweet discounts!
Here are a few payment method upgrades to consider to lower your bill:
Pay in Full
When your premium is broken down into monthly payments, it doesn’t exactly equal your annual quote. You see, your insurance company will do the same as any payment plan out there and charge you interest on those smaller payments.
If you can afford to, paying in full for your entire policy year is the best way to ensure you aren’t lining their pockets with those interest charges.
Authorize Auto Payments
Can’t afford to pay upfront? No problem. Authorize your insurance company to take the money directly out of your bank account each month and they’ll reward you for the access.
Not only could this save you money on your policy, but it also reduces your chances of late fees due to simply forgetting that your bill is due. At the end of the day, this option is fantastic for peace of mind and savings alike.
Pay in Advance
Instead of leaving your bill to the last second, consider getting on top of your finances by paying your monthly or even quarterly premium in advance. When your insurance company already has the money in their hands, they know they can rely on you.
While it may take some time, these advanced payments will present you as an ideal client and your insurance will go the extra mile to keep you around.
Switch to Usage-Based Insurance
If you don’t put many kilometers on your car, this may be the perfect option! Instead of paying for your entire policy, these pay-as-you-go premiums allow you to only pay what you’ve used.
If you’re looking to save a little extra money, you can opt for this plan and action your cash-saving tricks such as taking the bus or carpooling when possible.
Drive Safely
While this sounds like a no-brainer, you wouldn’t believe how many people aren’t aware that their driving history impacts their rates.
If you’ve got a history of driving like a jerk, it’s time to clean up your act. By becoming a safer driver, you’ll reduce your chances of having to make a claim and earn yourself a pretty lofty no-claims bonus.
Of course, it will take some time to build up your positive reputation, but believe us, the results are worth it. You can even chat with your provider about installing a driver cam to expedite the amount of time it takes for them to notice your great driving habits.
Bundle and Save
One of our favorite secrets to cheap auto insurance is to combine your policy with your other insurance needs.
You see, insurance companies are in the business of making money, and the more you have to ensure through them, the more money they stand to make off of you. This is a major incentive for these companies to capture your business and keep you there.
To do this, bundle and save deals are offered like they are going out of style.
By combining your home, health, and auto insurance, each of these policies may see a significant drop. What’s more, is that you’ll have one easy and convenient bill for all of your needs. Top that off with the automatic payments we mentioned earlier and you’ll never have to set that ‘pay the bill’ alarm again!
Improve Your Credit Score
This technique’s effectiveness is widely debated, however, when it comes down to it, your insurance company wants to know they can rely on you to pay your bill.
The more impressive your credit score is, the more likely insurance providers are to give you a deal. This is because they want more reliable clients just like you to fill their schedules.
Of course, if your score isn’t something you’re all that proud of, you’ll need to work to improve it. Take steps such as always paying your bills on time, only taking credit out when absolutely necessary, and keeping your credit balance nice and low.
If you’re doing all of these things already, check out these helpful tips and tricks for improving your score so you can finally reap the benefits of that cheap car insurance.
Review Your Coverage
Last but certainly not least, take the time to review your coverage. As life changes, it can be easy to forget about little things like the conditions on your insurance policy.
For example, you may have had a teen learning to drive in your vehicle, but in the last 5 years, that teen has grown up, bought their own car, and maybe even moved out. Things like this are no longer necessary and just add on to your monthly bill.
By upgrading your policy to ‘no drivers under 25’, you can save a significant amount of money in a matter of seconds.
And of course, if there’s anything on your policy that you don’t understand, don’t be afraid to ask. It’s your provider’s job to explain your premium to you whenever you need a refresher. Don’t feel obligated to stay in the dark just to save them some time on the phone.
How to Save Money on Car Insurance
Now that you know these simple tips and tricks for how to save money on car insurance, it’s time to put your new knowledge to the test. With this comprehensive guide, we’re confident you’ll be on your way to reducing your rate and landing the best premium in no time.
Want more tips and tricks for all your auto needs? Check out our other articles to discover everything you need to know to stay safe on the road this year with the right insurance, dealer updates, and more Click for info
Learn more about the best method to get your vehicle insured, on this website: www.carautoinsurancequotes2013.com
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