Car insurance is one of those bills that really annoys me. I pay it every month and get nothing out of it. No entertainment value and nothing tangible. Still, I know that it is worth having because it could eventually protect me in the event of an accident. That doesn’t mean that I want to pay any more than I have to for insurance.
Ways To Save Money
So, here are some ways that I have found to save money on car and truck insurance.
1. Shop Around
First and foremost, you need to put in the time calling around for a better rate.
Auto insurance companies often save their best discounts for new policy holders. They want to attract new business and a low introductory price is a sure fire way to do this. Keep in mind that if you score a new client discount, you will probably lose it in a year and your insurance will go up.
This, of course means that you will need to shop your auto insurance every year to get the best rates. Well worth the time if it will get you 200 dollars or more a year in savings.
2. Ask For Discounts
If you do not ask for a discount, you will never receive them. Call your insurance company and ask if there are any discounts that you might qualify for. Tell them that you are shopping around your auto insurance and they might find it worth their interest to dive into the discount pool with you.
There are all kinds of discounts potentially available. If you have a kid in the house, you might be able to get a good student discount. If you need life insurance as well, you could qualify for a multiple policy discount. Have an alarm, that is a possible discount as well. There are potentially dozens of discounts that you might qualify for.
Call and find out.
3. Raise Your Deductibles
If you have full coverage auto insurance, a sure fire way to lower your premium is to raise the deductible. Just going from 500 dollars to 1000 dollars can save you ten to twenty percent on your premium, depending on your carrier.
Before raising your deductibles, if you have an auto loan, be sure to contact your loan company. They may have limits on how high you can go.
In any case, it is probably not an idea to go much higher than $1000 on your deductible. If you had an accident, you could find it difficult to get more than 1000 dollars to pay your deductible.
4. Improve Your Credit
You might not have known it but your credit can have an effect on your auto insurance rate.
That’s right, many insurers are actually using your credit score as a factor in setting your rate. So, the better your credit, the less you pay. Of course, the opposite is also true and if you have bad credit, you will pay more.
To save the most on your insurance, get your credit score in order before changing companies. Here is what you need to do.
- Pay your bills on time.
One of the biggest ranking factor is how you pay your bills. Make sure that you pay your bills on time by setting up auto reminders or even automatic payments.
- Pay down your balances.
You do not want to use more than 30 percent of your available balance. Keeping your balance below that level will result int he best score.
- Have a mix of accounts.
Having a good mix of different types of credit will boost your score. A mix of revolving credit and installment loans will boost your score.
- Keep inquiries low.
An inquiry on your report will affect you for up to one year. Try not to apply for any new credit for the best score.
5. Combine Policies
If you own a home or have renters insurance, you may be able to get a sizable discount by moving both of these policies to one provider.
Multiple policy discounts can be some of the biggest ones that you will receive. Easily score a discount of twenty to thirty percent on your policy or policies.
6. Choose Your Vehicle Wisely
It might be too late to do this now, but next time you go looking for cars, compare insurance rates. Insurance rates can vary quite a bit based on the type of vehicle you buy.
In addition to types of vehicles, a particular model could have higher rates. This could be because of higher rates of thefts or from vehicle accident history.
7. Pay Your Policy In Full
Some but not all insurers will allow you to pay your policy in full and receive a discount. At the very least, you can save on the monthly installment fee but chances are good that if there is a discount, it is closer to ten to twenty percent of the premium.
On a $1500 a year policy, that could get you up to 300 dollars in savings.
8. Drive Safely
It should go without saying that if you are a safe driver, you will pay less on car insurance. One single accident or speeding ticket can have a big impact on how much you pay for your annual premium.
Some insurance companies have taken safe driving to the next level. They allow you to install trackers on your car that record your driving habits. Drive safely for a set amount of time and you will get a discount on your policy.
Tina’s Last Word
As you can see, there are many ways to save hundreds of dollars a year on car insurance. That might only be twenty to thirty dollars a month, but every dollar counts when you are trying to make a budget work.