10 Brilliant Tips on How to Save Money on Car Insurance

10 Brilliant Tips on How to Save Money on Car Insurance

In recent years car insurance premiums have risen by a good 33%. That makes all of us sit back and take pause, wondering how we can ease this increased hit on our wallets.

Today most people face rates of well over $1,000 a year. If this is more than you are happy to pay, you may want to look for ways to save money on car insurance.

We have good news! Keep reading for ten ways you can reduce your car insurance costs in 2019.

1. Shop Around Before You Commit

When it is time to renew your car insurance, don’t just blindly accept your current insurance company’s renewal rate. Shop around by using a guide to get a few quotes from a handful of different insurance companies.

You will find that rates can vary greatly from one company to another for the same policy. You wouldn’t be happy to find out that you’ve paid $1,500 for a policy that you could have gotten for $500.

2. Think About What You Drive

The make, model, and year of the car you drive will affect the cost of your insurance. Insurance companies will look at some factors when deciding the rates for different vehicles.

They consider the durability, safety, likelihood of theft, price, and repair cost of the vehicle. Those that are less durable, more expensive to repair, and likely to be stolen are going to cost the most to insure.

Most Expensive Vehicles

Car models from Tesla and Mercedes rank high for expensive insurance rates. These vehicles are expensive to buy, expensive to fix, and are not the most durable vehicles.

Then there are cars like the Mitsubishi Lancer and Scion FR-S that are also expensive. While they aren’t especially expensive cars, they are commonly associated with wrecks and theft.

Most Affordable Vehicles

When it comes to affordable cars, you are safe choosing a Jeep Wrangler, Honda Odyssey, or Toyota Tacoma. These vehicles are not only affordable to buy and maintain, but they are not associated with dangerous or reckless behavior.

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3. Look at Your Deductible

Your deductible is the amount you must pay before your insurance kicks in. So the lower your deductible, the more insurance you need to pay for.

If you currently have a $100 deductible but can afford to pay $1,000 out of pocket, then you have bought more insurance than you need.

The amount that you could save will vary based on your personal driving history and the insurance company you quote with. On average though, consumers save 9% by adjusting their deductible from $500 to $1,000.

The savings can soar though, as consumers in Massachusetts could see savings as high as 19%. While those in Michigan don’t get a great discount and will only see 4% in savings.

4. Merge Your Policies

If you have more than one car to insure you should combine them and get a multi-car discount. Or if you need home insurance then look for a company that combines different types of policies.

Not only will you enjoy savings, but it will also make managing your finances easier.

5. Fix Your Credit

Insurance companies look at your credit history as a factor in determining your rate. It has been shown that how we handle our finances is a direct correlation to our claim history.

So insurance companies feel that if your credit is poor, you will be more expensive to insure. This makes your rates go up.

6. Ask for Discounts

Insurance companies offer a discount for everything from being accident-free to being a good student. So contact insurance companies and ask them what discounts they offer.

Then make sure every applicable discount gets applied to your quote. Here are some of the more common discounts offered:

  • Paperless
  • Multi-car
  • Accident-Free
  • Affinity to an Organization
  • Combined policies
  • New Vehicle
  • Good Student
  • Driving habit trackers

Companies like Progressive and Nationwide offer drivers the ability to earn their discount by proving they are safe drivers. A tracker monitors your driving for some time and then the insurance company determines your discount based on the data.

7. Insurance by the Mile

If you don’t drive a lot, you may find that paying for insurance by the mile is the most cost-effective way to buy insurance. It isn’t available everywhere, so you’ll need to check before you get too excited.

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8. Lower Your Coverage

This one is simple, lower your amount of coverage and your rate will decrease too. As your car ages, you need less insurance to cover the cost of repair.

You need to keep in mind that many states have a minimum amount of insurance drivers are required to maintain. Do not go below this limit or you risk having problems with the DMV.

9. Don’t Pay Monthly

Have you noticed that when insurance companies quote you, there is one rate if you decide to pay monthly, and another, cheaper, rate if you decide to pay for six months up front?

If you can afford it, pay for six months up front. This will result in a decent amount of savings throughout the year.

It will also make it easy to manage as you only have to think about your insurance every six months. You’ll want to put away some money each month for the next six-month premium.

10. Improve Your Driving Habits

The best way to lower your rates is to improve your driving habits over time. When you drive better, you will receive fewer tickets and be involved in fewer accidents.

When you have fewer claims or bad marks on your history, insurance companies see you as less of a risk. The lower your risk, the lower your cost for insurance.

Save Money on Car Insurance

The best way to save money on car insurance is to take control of your finances. Shop around and compare rates and ask insurance companies for discounts.

Then consider the car you drive and the way you drive it. You may find that you can save money by simply trading in your car and adjusting your daily habits.

Now that we have car insurance sorted, read this article to find affordable health insurance options.

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