Saving on Car Insurance: Seven Tips

According to the Insurance Research Council, more than 85 percent of U.S. drivers have some form of car insurance. It’s a legal requirement in almost every state. But what if you’re a new car owner or if you’ve let your previous policy lapse? Here’s what YOU need to know about saving on your auto insurance premiums today:

Tip #1: Take Advantage of Company Discounts

As insurance companies struggle to attract new customers, they’re offering more and more incentives for anyone willing to take them. For example, Nationwide is willing to cut costs by 10 percent for drivers aged 55 and older who complete a defensive driving course. Look for these deals within every company, because you might just be surprised at the ways you can save.  I also recently wrote about the Allstate Drivewise program as well, which gives discounts to customers willing to put a monitoring device in their car.

Tip #2: Find The Right Insurance For Your Age Group

Teens are uniformly considered high-risk drivers, so if you’re a young person behind the wheel, your premium will be higher than average. There’s no getting around that. You might find, however, that some companies are more forgiving than others, so make sure to shop around for the lowest quotes for your specific age group.

Tip #3: Use Your Car Less

It may sound counterproductive, but you’ll actually save on car insurance if you take the bus more often. That’s because insurance companies will ask you how much and how far you drive during a regular week, and the lower those numbers are, the less you’re statistically likely to have an accident.

Tip #4: Improve Your Credit Score

Even taking into account age, gender and other economic factors, a bad credit score can massively swell your car insurance rates. InsuranceQuotes.com reports that poor credit scores can inflate your premiums as much as 91 percent, more than many other risk factors combined. If you want better rates, you’ll need to improve your credit first.

Tip #5: Stop Paying For Unnecessary Coverage

If you’re driving an old clunker that will turn into scrap metal in the event of an accident, what’s the point of paying hundreds of dollars in collision coverage every month? You won’t be repairing it anyway. Take a close look at your insurance policy and determine whether you have more coverage than you need.

Tip #6: Raise Your Deductible

The higher your deductible, the lower your monthly premiums. A higher deductible does mean paying more if you wind up in a pile-up, but you’ll come ahead if you rarely use your insurance.

Tip #7: Don’t Be Afraid of Switching Plans

If you’re unhappy with your car insurance company, or if they’re increasing fees and decreasing coverage, you shouldn’t feel like you have no say in the matter. You’re free to take your business elsewhere as soon as your policy expires. Don’t stick with a company you don’t trust just because they’re familiar.

These are just a few tips for saving on car insurance. You may not have a choice about obtaining it, but that doesn’t mean you can’t make smart and informed decisions within the limits of the law. Good luck!

What are your favorite ways to save on auto insurance?

About Holly

Holly Johnson is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly, Frugal Travel Guy, and U.S. News and World Report's "My Money Blog." Holly has been featured in the Wall Street Journal, Kiplinger Personal Finance, Fox Business, and Daily Finance.

Comments

  1. Great tips! I just used almost all of these to switch ours insurance over to a cheaper plan. I’m looking forward to the day when I live closer to work and can ride my bike. Or just quit my job and work from home :)

  2. I also commute to my basement, but my rates haven’t changed for years. I did look into getting new rates with a friend who specializes in property and casualty. He sent me ten pages of forms full of questions that would take hours to complete – just for a quote!

    I took the lazy way out and renewed with the old carrier. My youngest daughter gets her permit in a few months. It may be time to revisit the lengthy forms.

  3. #3 makes a lot of sense, but it something I wouldn’t have even thought of. Bf and I only use our car on the weekends to buy groceries etc. We use public transportation during the week so we barely drive except for weekends.

  4. All good points! I would add using a customer service reputation because you don’t want to have deal with difficulties when you need service.

  5. We also have homeowners and umbrella insurance through the same carrier, and we get a break on all policies, so a ‘Multiple Policy’ discount should be researched when this scenario is in play.

  6. So far I have switched every year. Companies generally have a better discount for new customers.

  7. I just like the strategies you actually offer in the posts. I’ll book mark your blog in addition to check all over again here consistently. Now i am pretty particular I will be shared with quite a few brand new information right in this article! Best of luck for the next!

  8. Some people don’t realize just how important credit score is, but it essentially plays a major role in most financial decisions. Having a good score can make your life so much easier; thanks for the overall great tips, Holly!

  9. Howdy my pal! I’m going to point out that this informative article rocks !, wonderful published and may include the majority of major infos. I would like to discover more posts like this .

  10. Great article with key points on several accounts.

    While I don’t switch every year, I do shop around annually for auto insurance. The difference in quotes is absolutely astonishing between companies, particularly for an individual such as myself who is male, young and unmarried.

  11. That’s why auto insurance is more expensive for teenagers
    than adults. When the recession hit, they lost a hefty slice of their capital reserves.

    Hidden insurance is often found in other insurance policies.

  12. Hello all, here every person is sharing these experience, therefore it’s nice to read
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