How to save money on your car insurance

When we go through a difficult economic situation, we tend to see the problems even bigger than they are and find it difficult to find solutions. If you have been surprised with the price of your car policy, keep calm. We will explain to you right away how to save money on your car insurance.

The good news we have for you is that there are many ways to reduce what you pay for your car insurance without sacrificing the level of coverage you require. In this article, we’ll take a look at some of the more popular options.

Some suggestions on how to save money on your car insurance

The payment of the premiums of your insurance policy can take a large part of your monthly budget. But there are ways to reduce the cost, check out the following:

  • Get multiple quotes
  • Increase your credit score
  • Buy used car instead of new
  • Eliminate comprehensive and collision coverage on older cars
  • Combine it with your home policy
  • Increase your deductible
  • Maintain continuous coverage
  • look for discounts
  • drive safely
  • Take a defensive driving class
  • Consider Pay Per Mile Insurance

How to save money on your car insurance

Get multiple quotes

Price comparison should be the starting point when it comes to saving money on the car insurance. We recommend getting a minimum of three quotes to compare. You can apply online or by phone.

Make sure you have your current policy with you before you start. That way, you’re assured that you’re buying the same level of coverage you already have, not less coverage.

If the idea of ​​getting three or more quotes on your own sounds daunting, consider working with an insurance broker.

Brokers have relationships with multiple insurers and they can easily search all of them. It’s like having the best of both worlds: you get the comparison, but you don’t have to do all the legwork.

Keep reading: How to register a car in New Jersey

Increase your credit score

In all but a few states, insurers can use your credit score to help set your premiums. So, having a good credit score really pays off when it comes to insurance. (Notable exceptions include California, Hawaii, and Massachusetts.)

Let’s say you have a credit score somewhere in the 660s. If you can raise it by just 10 or 20 points, you’ll enter the next level of the credit scoring model. And new research The Zebra’s State of Auto Insurance shows that making that jump can save you an average of $190 on your premiums!

increase your credit score It is easier than you think. Rule number one is to pay all bills on time, every month without fail. For more information, we recommend reading our article “How to raise credit score fast”.

Buy used instead of new

Many personal and family finance experts agree that buying a used car is “one of the smartest financial moves you can make.”

That’s doubly true when it comes to what you pay for car insurance. A new car will always be more expensive to insure than a used car in good condition with two or three years of circulation. In fact, research from The Zebra found that buying a used car will save you an average of 18% on insurance premiums versus buying a new car.

Eliminate comprehensive and collision coverage on older cars

If you have an old vehicle, it doesn’t make sense to take out comprehensive coverage. In the event of an accident, the car is so worthless to begin with that you’re not going to get a big, fat check to replace it.

Depending on age and condition, you may feel lucky to get a few hundred or even thousands of dollars.

Therefore, the general rule is that When the cost of compensation and collision exceeds 10% of the value of your old vehicle, it’s time to leave it and only have liability coverage. You can determine the value of your vehicle in edmunds.com, KBB.com or NADA.com.

Keep reading: How to know the history of a free (and paid) vehicle

Combine it with your home policy

Combining your auto and home insurance can provide big savings, depending on where you live, your credit history, accidents, and other factors.

A study of Quadrant Information Services found that the average discount for combining home and auto insurance is 16%. On the other hand, combining auto and renters insurance will save about 8% on annual premiums.

Increase your deductible

Increasing the deductible, that is, the amount of money you must pay out of pocket when you report an accident, is a good decision if you have wondered how to save money on your car insurance.

Generally, you should opt for a $1,000 deductible to get the best savings on your policy. At that level, you’ll pay a lower premium and won’t be tempted to file any claims for small events like a broken windshield. Because doing so could unexpectedly increase your renewal rates.

Maintain continuous coverage

Rates will drop 8% on average after you have insurance for at least six months. That’s thanks to a discount most companies offer when you maintain ongoing insurance, according to the “State of Auto Insurance 2020” report.

“Maintaining continuous, uninterrupted insurance coverage (even for a day) is important. Drivers who are already insured are considered by insurance companies to be financially responsible and therefore lower risk,” the report states.

look for discounts

You may be familiar with the kind of discounts that most car insurance companies tout with great fanfare. For example, those that apply to full policy prepayment, switching to paperless billing, car payment setup, and more.

But there are also a variety of lesser-known discounts, including:

  • anti-theft devices
  • College students living away from home
  • driving courses
  • low annual mileage
  • long-time customer
  • more than one car
  • No accident in three years
  • No moving violations in three years
  • Student drivers with good grades

Call your insurance company, agent or broker and ask about discounts you may qualify for.

drive safely

This is hardly mentioned! While many vehicles come equipped with a variety of modern safety features, there is no substitute for good common sense behind the wheel.

Distracted driving carries fines that can increase your premiums. So can driving under the influence of alcohol, reckless driving, driver’s license suspension, being involved in an at-fault accident, and much more.

So, take it very easy and slow down on the highway.

Keep reading: How to add a car to the GEICO insurance policy?

Take a defensive driving class

Many insurance companies will give you a discount if you complete a defensive driving course. Courses can be taken online or behind the wheel. Online courses tend to be cheaper, usually between $20 and $40, depending on QuoteWizard.com. Classroom courses can cost up to $100.

But it is money well spent. A wide variety of insurers will give you a discount for defensive driving courses ranging from 5% to 20%. About 10% is the average discount.

Consider Pay Per Mile Insurance

If you’re used to driving less than 10,000 miles a year, then pay-per-mile insurance might be your best option. With this type of comprehensive coverage policy, the less you drive, the less you pay.

The basic way pay-per-mile insurance works is that you plug a dongle into your vehicle’s port and it logs your daily mileage. Or you download an app to your phone and your driving is tracked through that app.

The way you drive is not evaluated. The key is how much you drive.

How to save money on your car insurance: conclusion

Neither you nor anyone else likes to pay too much for auto insurance. By following all the tips in this article, you can lower the cost of your premiums and keep more money in your pocket.

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