Ten Top Tips for Reducing Car Insurance Premiums

For most consumers, car insurance is a monthly expense that can represent a major drain on finances. Fortunately, there are a number of ways in which individuals and families can reduce their auto insurance costs while maintaining quality coverage on their vehicles. Here are ten easy tips that can save consumers big money on their car insurance premiums.

1. Comparison shop
A number of online sites offer detailed information on coverage and rates for various auto insurance companies, making it simple to compare the various options. Additionally, some insurance companies provide detailed quotes not only for their own services, but for some of their direct competitors; this can allow consumers to quickly obtain the information they need to make an informed and cost-effective decision. Friends, family and colleagues at work can also be valuable sources of information on insurance policies, rates, and quality of service.

2. Consolidate to save
Consumers who insure their homes with the same company that provides coverage for their vehicles can receive discounts on the cost of all their insurance premiums with that company. This is also true to a lesser extent for policy holders who cover more than one vehicle with the same company; while not all insurance companies offer these discounts, they can add up to considerable savings over time.

3. Shop before you buy
Comparison shopping for insurance should also include comparing rates for various vehicles. Higher insurance rates associated with some cars and trucks may relate to safety issues, increased risk of theft, or greater repair costs. By checking into the relative costs to insure various vehicles under consideration for purchase, consumers can manage their car insurance costs while maintaining solid coverage on all their vehicles.

4. Maintain reasonable coverage
The amount of coverage required for a brand-new pickup or car is significantly different from that needed for an older vehicle. In most cases, comprehensive and collision insurance coverage is required by lenders as a condition of financing, and is recommended for newer vehicles even if they are bought outright; this ensures that the vehicle can be repaired or replaced in the event of a catastrophic accident. The same is not true for older vehicles with minimal value, since the cost of repairs may well exceed the value of the car or truck. By dropping unnecessary coverage on vehicles that are approaching their trade-in or end of life date, it is often possible to save hundreds of dollars on unnecessary insurance costs.

5. Increase the deductible
Higher deductibles can make a big difference in the overall cost of car insurance. Deductibles, simply put, are the amounts consumers must pay before the insurance company begins to cover the repair or replacement costs. Typically paid directly to the company before any coverage is applied, most deductibles range from $250 to $1000 per instance; lower deductible amounts can cost significantly more than higher amounts. By setting aside cash specifically to cover a higher deductible, consumers can often reduce the monthly cost of car insurance considerably and save money in the long run.

6. Change the location
Car insurance premiums can vary significantly from area to area depending on the risk factors including potential for theft and overall desirability of the neighborhood. In some cases, moving less than a mile can significantly reduce or increase car insurance costs. Consider also the distance travelled each day to and from work and other responsibilities; by reducing the amount of time spent driving each day, consumers can benefit from more free time and enjoy lower insurance premiums into the bargain. Taking public transportation when possible can also reduce the overall miles driven per year and help to cut costs. While reducing drive time is not an option for all insurance customers, it should be considered as an important factor in the overall cost of car insurance.

7. Join the crowd
Many large employers, consumer groups, and other organizations offer their employees and members the chance to purchase auto insurance through a group plan. Group plans offer rates that are typically around 10% lower than standard auto insurance, and in some cases may offer even greater discounts for consumers who remain enrolled for a prolonged period of time. Not all car insurance customers are eligible, but for those who can qualify through affiliation with a business, organization, or alumni association, group rates offer significant savings on auto insurance.

8. Credit where credit is due
More and more insurance companies are using credit scores as a basis for analyzing risk and determining the premiums consumers pay for car insurance. By doing some basic repair work on their credit reports, consumers can sometimes realize significant savings on their auto insurance and avoid higher premiums as a result of credit difficulties in the past.

9. Maximize available discounts
In many cases, consumers are eligible for a number of discounts on car insurance premiums that may not be immediately obvious. Here are a few of the most common discounts offered by major auto insurance companies:
• Discounts for higher deductibles
• Multi-car discount
• Driver training and defensive driving course discounts
• Three years without an accident
• Three years without a moving violation
• Good student discount
• Loyalty discount for long-term customers
• Air bags, anti-lock brakes, and other safety equipment
• Anti-theft devices, including car alarms
When investigating these discounts, consumers should bear in mind that the company offering the greatest number of discounts may not offer the overall lowest price. It’s essential to compare the bottom line price after all discounts have been factored into the car insurance premium rate.

10. Drive safely and within the speed limit
It may seem obvious, but driving at or under the speed limit and observing all traffic lights and cautions is the best way to keep car insurance premiums under control. By driving safely and observing the speed limits, consumers can avoid accidents and citations and save not only time and money, but lives as well.

Consumers can significantly reduce their overall car insurance costs by comparison shopping for the best rates and discounts, minimizing their drive time and mileage when possible, increasing deductibles, and driving safely and observing traffic laws carefully. These tips can help ensure the lowest possible car insurance premiums while providing consumers with high-quality coverage no matter where the road may lead.

Written By: Sarah Montgomery

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