Car insurance is one of the most misunderstood expenses in the average household. People think it’s expensive when they just don’t know how to shop for it. If you want to save on car insurance, there are plenty of ways to do just that!
Try These 5 Money-Saving Tactics
When shopping for car insurance, it’s important that you don’t lose focus on what matters most: the coverage. Having said that, there are numerous ways to save money while getting the coverage you need. Here are a few tips:
1. Get Multiple Quotes
Shopping around for multiple car insurance quotes is not only smart but necessary. If you go with the first (and only) quote an insurance company gives, you have no way of knowing what the marketplace is like. You could be paying as much as 50 to 75 percent more than necessary – and you’d never know it!
The general rule of thumb is to get at least three different quotes from three different sources. Ideally, at least one of these sources will be an independent agent who can access multiple providers.
2. Compare Costs Before Purchasing a Vehicle
Many drivers make the mistake of going through 99 percent of the car buying process and then calling up the insurance provider to get a policy. Unfortunately, this puts people in a bind. If you follow this formula, you may realize that the insurance is way more expensive than you initially thought.
A better strategy is to compare insurance costs before buying a car. As you evaluate different makes and models, talk with insurance agents and brokers to get a feel for how each option will impact rates. In some cases, the difference will be small. It can mean a difference of hundreds of dollars per year in other situations.
3. Increase Your Deductible
This is certainly not an ideal option, but it is an option, nonetheless. By selecting a policy with a higher deductible, you can lower premium costs rather significantly. Be careful, though. Going too high can put you in a situation where you’re financially incapable of paying to get the necessary repairs done on your vehicle.
4. Keep a Good Credit History
Did you know that your credit history can impact your car insurance rates? (Underwriters and adjusters have actually found that people who manage their credit well make fewer claims, so they reward these individuals with better rates.)
If you know you’ll be looking for a new policy in several months, now’s a great time to clean up your credit and work on raising that score. Not only will it help you get a better auto insurance rate, but it’ll also offer savings in other areas (like on car loans and mortgages).
5. Bundle With Other Products
You can save a significant amount on your monthly premiums if you’re willing to bundle products – such as home and auto. The same is true if you get policies on multiple vehicles.
“If you obtain a quote from an auto insurance company to insure a single vehicle, you might end up with a higher quote per vehicle than if you inquired about insuring several drivers or vehicles with that company,” Investopedia explains. “Insurance companies will offer what amounts to a bulk rate because they want your business. Under some circumstances they are willing to give you a deal if it means you’ll bring in more of it.”
Speaking of discounted rates, many insurance companies offer lower rates for safe driving records, good grades (for students), defensive driving courses, military status, anti-lock brakes, etc. It’s always smart to ask about different discounts and to explain your situation to an agent when getting a quote. A few dollars here and a couple of bucks there can make a big difference in the overall price.
Don’t Miss Out on Savings
What if you could save $20, $40, or even $75 per month by doing a little research and using the tips from this article to secure the best possible policy for your family? While it might take a little time on the front end, you’re essentially cutting yourself a paycheck every single month from here on out. Not bad for a little bit of work!
