7 Ways to Save Money on Car Insurance

7 Ways to Save Money on Car Insurance
  • Opening Intro -

    Insurance rates continue to climb and are, in some states, well above the national average.

    Even with insurance reform in place, it isn't too hard to find households where auto insurance costs exceed $2,000 per year for two vehicles.

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There are many ways for you to save money on car insurance. We’ve listed seven of these as follows:

1. Low Mileage Discounts – Auto insurers routinely base your premiums on the number of miles agents think that you drive each year. For many Americans putting 12-15,000 miles on the odometer is common, thus they are insured accordingly. If you drive much less than that, then you should receive a discount based on your low mileage. Notify your insurer and ask for a low mileage discount.

2. Get Estimates First – If you are planning to buy a new car, contact your auto insurance agent first to get a quote on that vehicle. You may learn that a particular make/model costs much more to insure than a similar model. Insurers look at the number of claims submitted for theft and how each model performs in crash tests and what repairs will cost. You may be able to save several hundred dollars per year by buying a different model.

3. Choose Higher Deductibles – You may not be willing to drop collision on an older car, at least not yet. You may, however, decide that a higher deductible is in order. Most newer cars have $250 deductibles for comprehensive and collision. Consider raising these numbers to $500 or $1,000 if you can handle a possible loss yourself.

4. Shop Several Insurers – The longer you are with one insurer, the more likely you’ll receive a loyalty discount. Don’t be fooled by an automatic savings of 10 or 15 percent – you may discover that a competing insurer can undercut the discounted rate right off the bat. You’ll only know this if you routinely comparison shop.

5. Bundle Your Insurance – If you own a home, then consider bundling your auto insurance with your car insurance to receive a discount. Moreover, by bundling you’ll save money and should be eligible to purchase umbrella insurance, if needed.

6. Review Your Credit – You may be paying too much for car insurance, but for reasons that have nothing to do with the age or type of your vehicle or your personal driving habits. One factor – and an important one at that – is your credit rating. If you have credit problems, then insurers will consider you to be a greater financial risk. Clean up your credit report and when your credit score rises, ask your insurer to adjust your insurance to reflect your now stronger credit record.

7. Look For Discounts – Beyond low mileage discounts, you can save money on car insurance if your vehicle is equipped with various safety and security features. ABS, traction control and blind side warning systems can reduce your insurance. A vehicle immobilizer or other security system can also drop your insurance premiums.

The key, of course, is not what you save here and there, but what your final bill reads. Some discounts alone are quite small, but when added up can yield significant savings for you.

Resources

Auto Insurance Myths Die Hard, Don’t They?

Auto Insurance Premium Terms Defined

Your Low Cost Auto Insurance Quotes

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Categories: Money Management

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".