10 Great Ways to Save on Car Insurance

Many people are paying more than they should for car insurance. Maybe they are carrying coverage they don’t need or aren’t getting the discounts they qualify for. Whatever the reason, it’s easy to find savings on car insurance if you know where to look. Here are 10 great ways to save on car insurance.

Drop Insurance You Don’t Need

Saving money on your car insurance policy starts with reviewing your actual coverage. Your insurance may be loaded with things you don’t need. Some policies have road service added in, but you might already emergency road service from your new car purchase. If your car is paid off and is an older vehicle, you might not want to keep carrying collision and comprehensive. Look through your policy and understand your coverage. You can start peeling off the coverage you don’t need. You might be able to save 30 to 50% just cutting off the coverage you don’t need.

Consider Higher Deductibles

Your insurance rate for comprehensive and collision coverage are partially based on your deductible. A higher deductible saves you money on your auto insurance. This is because you are taking on more personal risk. If you are in an accident, you’ll pay more out of pocket to cover your repairs, but if you are able to avoid accidents, you’ll save on insurance rates. It can be a gamble so you really have to evaluate how much risk that you are willing to assume. It’s also important to keep in mind that your auto finance company may require you to maintain a deductible below a certain amount like $500 or even $250. Call them up before increasing your deductible.

Explore Every Discount

Insurance companies give discounts for a myriad of different reasons. Are you a member of a university alumni association? Are you a member of a professional organization? Are you an honor student? Do you always use your seat belt? Are you a member of a credit union? If you answered yes to any of these questions and many more, you could get a discount on your car insurance. The easiest way to get discounts that you qualify for is to contact your insurance agent and see what discounts you are eligible. 10% to 30% and even higher discounts might be available just for the asking.

Combine Insurance Lines

If you have your homeowner/renter’s insurance with one provider, your car insurance with another, and your RV insurance with a third company, you are probably paying a lot more for each policy than you would if you would combine them with just one company. Multiple vehicles on one policy usually gives a large discount, and most insurance companies give discounts when you have your home insurance and car insurance with them. Keeping your policies with different companies is leaving money on the table every month.

Repair Your Credit

Credit may not seem to have anything to do with saving money on car insurance, but these days it’s integral. Insurance companies have determined that people with lower credit scores are a higher insurance risk. Since low credit scores are a credit risk, improving your credit score translates into lower insurance rates. If your score is particularly low, focused credit repair can have a fairly quick impact on your credit score and by extension your auto insurance rate.

Take Defensive Driving Course

The old tried and true way of lowering car insurance rates is to take a defensive driving course. Many insurance companies give a significant discount by taking a defensive driving course. Not too long ago, taking a defensive driving course meant wasting a Saturday going to a dingy classroom with a tired out instructor and boring films. This is changing as more and more states approve of online defensive driving courses. Classes can be done in your own home at your own pace.

Drive Fewer Miles

Every time you get insurance, you’ll be asked about how many miles you drive per year. The more miles that you drive, the higher your rates will be. Taking public transit a few times per week or carpooling will not only save you money on gas, but it can get you a cheaper insurance rate. While the rate drop may not be dramatic, combined with commuting savings, this little tip could save hundreds.

Drive Safely

It should go without saying, but driving safely is one of the best ways to save money on car insurance. The problem is that if you have accidents or tickets on your record, it can take awhile before these fall off your records. As long as they are on your record, they have an effect on your rates. The good news is that they will fall off your record. Even better news is that some insurance companies will even provide a data logger that plugs into your car’s OBDII port that captures data about your driving. They can see that you are driving more safely and can adjust your rates accordingly.

Comparison Shop for Insurance

The company that offered the best deal a year ago may not offer the best deal now. Everyone has a specific rating profile that pertains to a collection of data about them, including age, driving record, credit, place of residence, and more. This rating profile changes as the data in it changes. In just one year, your profile could change enough to lower your rates considerably, sometimes cutting your rate in half. If you are not shopping around, you won’t even know that you could be savings hundreds. In fact, a Fortune Magazine article discussed that merely shopping around can lower the rate on your existing policy.

Choose the Right Car

Different cars have different insurance rates. Everyone probably knows that sports cars have higher insurance rates than a typical sedan, but rate differences go much deeper. Rates not only differ by the type of vehicle and even the number of doors, but they can also differ significantly between different models of the same type. A lot of data points go into these rates so vehicle value, theft rates, and accident rates all play a part in your rate.

While you may not be able to take advantage of all 10 of these ways to save, but you certainly can use one or more of these. Start from the top and work your way down. You’ll find that you can combine, mix, and match these 10 great ways to save money on your car insurance to maximize your savings.

See Also: Compare Car Insurance Quotes