9 Ways To Save Money On Car Insurance
Ask someone how much it costs them each month to drive their car and they will likely quote their monthly loan payment. Most of us forget other expenses incurred such as maintenance, fuel and one of the biggest expenses, car insurance . Saving money on car insurance is a relatively quick way to lower the cost of your commute, and can be accomplished with a quick phone call to your insurer, or search of the web.
Ways to Save Money on Car Insurance
1. Shop around, and don’t be afraid to take your search online. Do a little comparison shopping by getting two or three quotes from multiple sources. Esurance.com is a great place to start your online search for a free quote.
2. Drop unnecessary coverage. Comprehensive or collision coverage for older vehicles may not make sense financially. Consider the annual cost to insure older vehicles compared to their potential sale value. It may be that it costs more to insure an older vehicle than it costs to replace one. On the other hand, if you have little savings, insurance may be a relatively inexpensive way to replace an asset worth a few thousand dollars.
3. Buy car insurance and homeowners insurance from the same provider. If you already have a homeowners policy in place, contact the insurer and ask if they offer auto insurance. Chances are you’ll receive a multi-policy discount for purchasing both from a single provider, helping you to save on car insurance and your homeowners policy.
4. Increase your deductible. I only recommend this step if you have an adequate emergency fund in place to cover the cost of the deductible. While raising your deductible can significantly reduce your premiums, the last thing you want to happen is to go into debt after an accident to cover repairs.
5. Inquire about other discounts. When discussing your policy quote with an insurer, specifically ask about any other discounts you may qualify for, such as low-mileage
driving, the installation of car alarms or the successful completion of defensive-driving courses.
6. Look for group discounts. I received a small discount on my car insurance by signing up through a link provided by my credit union. The insurer partners with them to offer credit union members an opportunity to save through a group discount. Ask your employer, professional organization or financial institutions if they have any similar partnerships.
Keeping Auto Insurance Costs Low: Maintenance Mode
7. Maintain a clean driving record. One of the quickest ways to increase your car insurance costs is to have an accident or get a ticket for a moving violation. Tickets add points to your license and increase your insurance costs. Accidents increase your risk profile to current and potential insurers and increase premiums.
8. Clean up your credit report. Those not fond of the FICO score may find it objectionable that insurance companies use your score, in part, to determine your premium. However, statistics show a correlation between bad credit and a propensity to receive more tickets and be involved in a crash. Manage your money well and you are more likely to save on car insurance premiums.
9. Drive “low-profile” cars. That is, drive cars that are not typically a target for thieves or radar guns. Annual reports are available that list the most popular stolen cars each year. Studies have also show certain models and colors are more likely to be stopped for speeding (red sports cars, for instance). In their prime, the two cars shown above would have definitely been high-profile cars.
Saving money every month on car insurance is a quick way to make a significant reduction in your monthly expenses. Shopping around for quotes and making a few phone calls could be well worth the effort, so I’d encourage you to make this a priority.
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