The Best 8 Ways to Save Money on Your Car Insurance Plan
For your financial security and the safety of other drivers on the road, you cannot drive a car without getting car insurance first. Along with the basic requirements, getting car insurance can bring you real benefits.
For example, if you choose comprehensive automobile coverage, you may get funds if your car gets stolen, damaged from an animal collision, or damaged from a flood or fire.
Nonetheless, you will need to consider your financial circumstances when picking a car insurance policy. Read our top eight tips for saving money on car insurance. Let’s get started!
1. Analyze your car insurance needs
The first step you need to take when choosing car coverage plans is to determine the type of insurance you need. Do you lack the savings needed to repair your car in case of a major accident? If so, you may want to get collision and comprehensive insurance.
However, if you have an old car and you don’t plan to drive it around a lot, you should consider getting the most basic coverage. The basic tip is to only purchase these plans if your yearly premium cost is 10 percent or less of your car’s overall value.
Be sure to analyze and determine what your car insurance needs are before you purchase a specific policy.
2. Perform an annual rate check
Have you had the same insurer for a long time and think that you won’t be able to find cheaper rates? One survey from 2014 found that only 10 percent of car owners would save money if they switched coverage, according to ConsumerReports.org.
However, you never know if you may fall into that 10 percent. It’s a good idea to conduct an annual rate check to see if you may find a cheaper insurer. There are some easy ways online to find out how your coverage compares to other plans.
You may not get an immediate quote online, but you will probably receive email messages from agents who may provide their quotes. An independent agent can even look at the insurance rates for your car at several insurers.
3. Choose the deductible best for you
If you’re looking to save money on your premium and you don’t usually end up driving a lot, you may want to get a larger deductible. A higher deductible means you pay more out of pocket if you have a car accident and a claim to file, but lower monthly premiums.
You could reduce your premiums by 15 to 30 percent if you increase your deductible from $200 to $500. If you raise that deductible to $1,000, your premium could be cut by as much as 40 percent.
This might be a good strategy if you have a good driving record. However, if you drive two hours a day and want to be more financially safe, you might choose a smaller deductible and a larger premium.
4. Find discounts on your car insurance
Car insurance companies offer a host of different discounts for drivers who live a relatively low-risk lifestyle. Ask your insurance agent if the company offers discounts for students who have good grades, drivers who have taken a driving course, drivers who take a defensive driving course, and car owners with anti-theft and safety equipment.
5.Choose multiple coverage plans from the same company
You may find significant discounts on your car insurance premiums if you choose other coverage plans from the same insurer. If you own a home, consider getting home insurance and flood insurance from the same payer along with your automobile coverage. You may also need life insurance or boat coverage.
Getting policies from the same insurer may save you money in the long run. Make sure to compare your plans to premiums from different insurers as opposed to a single-insurer package.
6. Keep your credit score in good standing
Many car insurance companies consider your credit score when setting a premium for your coverage. In fact, most states allow for insurers to look at your credit score when deciding on your coverage rate.
Be sure to check and report any errors on your credit score. If there are certain reasons why your financial standing and credit score has declined such as the recession or a job loss, ask your insurance agent if they can make some exception.
7. Let your insurer know about reduced mileage
Did you retire or start working from home on a permanent basis? If you’re driving a lot less than before, your lower mileage may be cause for a reduced car insurance premium.
The way insurance costs are calculated to depend upon mileage driven per year. The average amount of miles driven on a yearly basis is usually 12,000, but if your mileage is lower, talk to your insurance agent.
If you report it to your car insurance company, you may save as much as 5 or 10 percent of your premium costs.
8. Buy a car that doesn't require expensive coverage
If you are looking to buy a new car, check out the different models available and check their insurance rates. The type of vehicle you buy will impact the premium cost of your car insurance plan.
This is especially important if you want to buy collision and comprehensive insurance plans. If you buy a minivan, SUV or another moderately-priced and safe vehicle, your insurance rates are likely to be lower than that of a more pricey sports car.
So when you are looking for cheap insurance, be sure to buy a car that won’t require more pricey policies.
These eight tips for saving money on your car insurance plans should help you create a stronger financial future. Be sure to analyze your needs before purchasing a plan, compare annual rates among multiple insurers, search for discounts, and report reduced mileage. This advice should go a long way to stabilizing your finances about your vehicle needs.