Are you wondering how you can lower your auto insurance? There’s a lot to pay for these days. Between your taxes, bills, rent, and groceries, your insurance seems like the least important cost you pay.
The thing is, insurance is something you don’t want until you really need it. Most people get auto insurance with minimal coverage and low premiums. They try to save money in the short run, but when they get in an accident, they end up paying more than they save with a cheap policy. In the unfortunate event of an accident, between medical expenses, repair expenses, and towing expenses, you’ll wish you had just paid the premium.
Just because you need insurance doesn’t mean it has to be expensive, either. It’s important to compare auto insurance policies with your insurance broker and discuss the type of coverage you need, what your state requires for coverage, and how you can reduce your costs.
If you have a classic car, you’ll need classic car insurance. If you have a thumping sound system, you might want to get sound system insurance. Different drivers need different coverages, but all drivers want to save money. Let’s examine five ways you can lower your auto insurance cost in the short and long term.
#1. Learn What Costs You Can Lower
Most people sign up for their auto insurance and forget about it. They don’t often think about the ways they can lower their insurance premiums until the bill comes around. There are several factors that determine the cost of your premium including gender, age, marital status, and the type of car you drive. Some of these factors you can control and others you can’t.
Insurance costs more if you’re a male aged 16-21. This is due to the fact that young male drivers statistically file more accident claims than young female drivers. This trend reverses as both gender groups age. Male drivers become cheaper to insure between the ages of 30-75 while female drivers become more expensive to insure. Between the ages of 75-85 this trend reverses again and female drivers become cheaper to insure.
If you’re thinking about tying the knot you can greatly reduce your auto insurance premium by getting married, especially as a male driver. Your profession also matters. If you’re in a line of work that’s more accident-prone than others, you may end up paying more. Generally, the more time you spend on the road for work, the more your insurance premium will cost.
Where you live can also determine a lot of the cost you pay for auto insurance. The more densely populated your city is, the more likely you are to be involved in an accident or be exposed to theft or vandalism. Finding out where your city ranks in auto insurance costs is important. Moving to lower your premium might be a bit extreme, but if you’re choosing to relocate, it can be a significant way to save money. Being in a state with lots of uninsured drivers can also raise your rates. Find out how many uninsured drivers you have in your state before you decide on a policy.
#2. Buy the Right Vehicle
There are several ways you can reduce your auto insurance cost without sacrificing the coverage you need. Before you sign up for any insurance policies, you should shop around for the right vehicle. Picking the right vehicle can greatly reduce the cost you pay for insurance as different vehicles cost different amounts to insure.
You might be eyeing that 1962 Porsche 356C, but beauty like that comes at a price. Repairs and maintenance are more expensive on older vehicles, and sport cars generally cost more to insure because more accident claims are filed by drivers of sport cars. Older vehicles generally have lower safety ratings, while vehicles with high safety ratings cost less to insure and will save you money over time.
Consider if you really need an SUV or if you can settle for a sedan. You can get lower prices on your insurance premium for driving a smaller vehicle, especially one with a 4-cylinder engine. If you already have an older vehicle, you can reduce the collision coverage on that vehicle if it’s worth less than 10x the premium. Also consider if you can drive a less expensive car, as cars with high theft ratings cost more to insure.
#3. Compare and Bundle Insurance Policies
Many insurance companies bundle life, home, auto, and health insurance policies together. You can save a lot of money by getting a bundled policy as insurers will typically offer financial breaks for bundling. You can also get some deals for being a long-term customer with one specific insurer.
You can also look into getting a group insurance policy through your employer. Some insurance companies offer reductions to drivers who get a group insurance policy. Check if you’re a member of any clubs, alumni organizations, business groups that offer group insurance policies to save even more money on your premium.
#4. Sign up for High Deductibles and Lots of Discounts
Without a doubt, one of the easiest and best ways you can lower your auto insurance cost is by maintaining a clean driving record. Nearly every insurer offers some type of discount for good driving. If you’re a student, you can also look into academic discounts offered by your insurer for getting good grades. The more you study, the more you save.
Some insurers also offer discounts for low annual mileage or if you have more than one vehicle, meaning those who drive less or who drive one vehicle less often can earn discounts. Some insurers will also offer discounts if you install certain devices in your vehicle including speed monitors and anti-theft devices.
Finally, getting a higher deductible on your auto insurance policy is an effective way to immediately lower your cost. Your deductible is the amount of covered loss you agree to pay before your insurance benefits can be applied. Choosing a policy with a high deductible means your insurer can offer you a lower rate. For those drivers less likely to get in an accident, including those in rural areas, this can be a feasible solution to get lower premiums. However, in the event you do get into an accident, you can owe more money out of pocket.
#5. Maintain a Good Credit Score
Everyone knows that having a good credit score is important when applying for a mortgage or taking out a loan. But having a good credit score is also essential to lowering your auto insurance cost. Many insurers use your credit score to determine your premium. Some states, including California, have made it illegal for insurers to check your credit score. But, on average, higher credit scores mean lower rates and vice versa.
You can improve your credit score, and lower your insurance cost, by maintaining a long credit history. Avoiding late and missed credit card payments will bolster your credit score and make insurers more likely to offer you discounted rates. This is because, on average, drivers with good credit scores are statistically less likely to file accident claims. Remember to check your FICO score often for any errors. Checking your score won’t affect it.
We all want to reduce our car insurance payment, but that doesn’t mean we should cut our car insurance coverage. Before you decide on a policy, it’s important to look at the whole picture of your coverage needs based on where you live, what type of driver you are, what type of vehicle you own, and what discounts you receive. Before you choose a cheap policy, check with a FrontLight insurance broker to see how much you can save just by making the right choices. You’ll be glad you have the coverage when you really need it.