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Best Ways to Lower Your Car Insurance
With the rising costs of cars, rates are on the rise across the country. With this, insurance isn’t likely to drop in the near future so to battle this, the team at LowerMyBills has compiled the best ways to make sure you are getting the lowest car insurance for your unique situation.
You should get at least 3 price quotes from various insurance companies. Luckily, insurance companies have all moved to the internet so you can do this all online. There are even great tools out there such as Policy Pilot that can help you compare insurance companies all in one fell swoop.
Understand what type of driver you are
If you feel like you’re a good driver with a pristine driving record, there are ways that you can get lower auto insurance via higher deductibles. You can actually lower your premiums by 9% by raising your deductibles from $500 to $1,000. This is definitely a great plan for someone that doesn’t drive much or is accident averse. If you are more likely to get in an accident or drive a lot, you should look to have a lower deductible.
Establish a strong credit history and good credit score
A lot of insurers will use your credit history as a way to price out their auto insurance policies. The higher your credit, the better price you will most likely get. Make sure your credit is in good standing by paying your bills on time and keeping your credit balances low. You should also monitor your credit so you ensure your score is accurate.
Insure multiple drivers
You should inquire about insuring several drivers or vehicles with the same company, as insurance companies will often give you a better “bulk” rate vs. the standard rate for insuring just one car. Insurers are most likely willing to give you a better deal if they feel like you’ll bring in more business. Usually, you can qualify for this if the drivers live at the same residence and are related by blood or marriage. If there are two people who aren’t related, they may still be able to get the discount if they jointly own a vehicle.
Check on group plans from your employer
If you are employed full-time, you should check with your work to see if they offer a group plan where you could get a discount through your employer.
Find out about discounts
Many insurance companies offer a wide-range of discounts for behavior that lends itself to better driving. Examples of these insurance discounts include the following:
- No accidents in a certain number of years
- Good student discount
- Carpool discount
- Low-mileage discount
- Safety features such as anti-lock brakes, anti-theft devices, airbags
- Bundled insurance with home
- Drivers Ed courses
- Defensive driving courses
- Long-time customer
- Good credit record
- Safe driving discount
Ask about group insurance
With all of these discounts, the key to the savings is the final price so be sure to compare the final price of multiple car insurance companies despite the number of discounts offered within each.
Understand insurance costs before buying a new or used car
Car insurance premiums are based on the car’s price, the cost of repair, the safety record of the car and likelihood of theft. Insurers will offer discounts for car features that limit the risk of theft or injury which will, in turn, lower auto-insurance premiums.
Don’t just go off price of auto insurance
You should understand the full background of your auto insurance provider before choosing them, not just using price as your one point of comparison. You should make sure that the insurance you buy to protect you financially is coming from a company that is financially stable. Ask friends and family or compare ratings online before choosing.
Consider dropping collision or comprehensive coverage if your car is older
A simple rule of thumb is that if your car is worth less than 10X the premium, this coverage may not be worth the cost. You can look up the value of your car at kbb.com or a similar site to better understand if it is worth it to get this type of coverage.
Taking mass transit may help you avoid paying more in insurance premiums as a way to limit the miles that you drive. Usually, the decrease in the number of miles you drive will lead to lower premiums. It is worth it to understand these mileage thresholds with your auto insurance company.
The type of car matters
If you are buying a new car such as a large SUV, you should know that this vehicle can be more expensive to insure than a smaller car. If you are looking at lowering your auto insurance, consider a lower-cost commuter car or even a hybrid/alternative fuel vehicle that can help protect the environment and lower your insurance premiums at the same time.
Location, location, location
If you are looking to move, you should be aware that car insurance rates differ by state and you may want to factor them into your budget.
Beware of unnecessary coverage
A lot of times, insurance companies will throw in additional coverage such as roadside assistance and car rental coverage. This type of coverage may be unnecessary for your lifestyle, so it is important to go over your policy line by line and removing any and all coverage you may not need.
Check out Pay-as-you-go insurance
For safe drivers, there are usage based insurance programs that allow your insurance company to track your driving in exchange for potential discounts. A typical rule of thumb is that if you drive less than 10,000 miles per year, you may be able to save extra going through a program like this.
Always talk your plan through with your agent
You should know that insurance companies are willing to offer discounts to make or keep high value customers so it is good to get on the phone with your agent to remind them why you are such a good customer. You should go through your current plan with your agent and take the time to renegotiate your current policy when necessary. A few tips for lowering your car insurance when you speak to an agent:
- Ask about bundling your homeowners insurance and auto insurance together
- Ask about renewal discounts or long-term discounts. A long term customer appeals to insurance companies.
- Ask about prepayment up front to save money. Some companies will allow you to prepay for the entire year up front as a way to save money.
- Ask about car feature discounts or mileage discounts. Remind them that you have these features or drive such low mileage to enhance your good driving image.
- Ask about courses you could enroll in such as a defensive driving course to see if that could lower your premiums.
- Have them take you through deductible scenarios to truly understand how much you should be paying in deductibles and how that affects your premium.
- Continue to reiterate that you want a better deal, are looking for a long-term insurance agent and highlight other insurance companies that are offering better deals. You need to let them know that you want to stick with them or join them, but need to make sure you have the best deal possible because once you commit you are committed for a long time.
The Bottom Line
While auto insurance will likely continue to increase in the future, it is important to understand all the tools at your disposal to try and limit this increase and find the best car insurance policy for you. Truly understanding the various discounts and ways to negotiate is a good step for making sure you have and or can find the best deal for you. And, again, it is best to compare multiple car insurance quotes before making the decision and one of the best ways to do this is through a comparison site such as PolicyPilot.com that will help you get the best rate through comparing multiple auto insurance rates.
Comparing Cheap Car Insurance
According to research by NerdWallet, below are the average annual rates for good drivers across the 7 big insurance companies.
- State Farm – $1,337
- Geico – $1,627
- Progressive – 1,828
- Farmers – $1,855
- Allstate – $1,964
- Liberty Mutual – $2,752
- USAA* – $896
*USAA is only available to active military, veterans and their families