15 Ways To Save Money On Car Insurance
Car insurance is a necessary evil; we are required by law to have it, yet we hardly ever use it. Like all other bills, I have researched ways to save money on car insurance that actually work. Some of these options are well known and some are new. To be thorough, I have included the old and the new ways to save money on car insurance.
Multi-Line Discount - a family can save a lot of money by simply putting all cars, motorcycles, homes, and apartments under one insurance provider.
Limit Your Driving - If you work from home or were recently laid off, tell your agent. Many companies will reduce your premium if you drive less than 100 miles per week (varies by insurance agency).
Discount for Safe Driver - You might be eligible for a rate reduction if you have not been in an accident or received a ticket for several years.
Raise your deductible - Raising you deductible can save you hundreds of dollars every year, but make sure you have money saved to cover the higher deductible if needed.
Comparison shop - Let your agent know that you are looking at other agencies to reduce your monthly premium; it is likely the agent will pull some strings to keep you as a customer. Caution: if you find a better deal, confirm that it is not an introductory price. Many times your premium will increase to what you were paying with your previous insurance agent.
Discount for parents under 25 - Car insurance companies reduce their policy holders premium at the age of 25 assuming there have been no accidents, some insurance companies offer this reduction for parents under that age of 25. However, another reduction will not apply once you turn 25.
Full coverage or liability - determine if full coverage is still needed by checking the blue book value of your car at Kelley Blue Book. If the value of your car is worth more than the cost to repair it, keep full coverage, if not, drop down to liability.
Get insurance quotes before you buy a vehicle and choose vehicle color - the type, model and color will affect you premium. If you don't want your premium to increase stay away from red sports cars. Also popular foreign models such as Toyota and Honda might have high premiums because they are stolen regularly.
Don't buy short-term policies - There might be a penalty so buy long-term.
Don't let your insurance lapse - A lapsed insurance policy indicates irresponsibility and high-risk. Avoid this at all cost. When you are ready to renew you will notice that your cost will have jumped tremendously.
Only insure cars that you drive - The old Ford that has not been driven in years should not be insured. However, depending on the state you live in, all registered vehicles must be insured. To avoid any problems make sure you register any non-working vehicles as 'inoperable'.
Refresh your driving skills - some insurance companies offer training courses that can reduce your insurance premiums at the end of the course. There are fees for these courses, so do the math and make sure the training course is worth your money.
Avoid accidents and tickets - Speeding tickets, moving violations, and accidents can substantially increase your rates for at least 3-5 years.
Don't insure teenager driver with your car - Premiums for a teenager driver is through the roof. Instead, purchase a safe, used car and only purchase liability. You will save hundreds of dollars.
Keep your credit score high. Some insurance companies will charge people with low credit scores a higher premium because they are expected to file more insurance claims.
Pay semi-annually - This is my favorite!! A surcharge fee is generally applied to customers who pay monthly. This fee is easily avoided by paying semi-annually. Begin to save up enough money to make the 1st semi-annual payment. After you make that payment, automatically transfer the monthly insurance payment into a high-yield savings account to earn interest. When you receive your semi-annual bill, pull money from your high-yield savings account to cover your premium cost. Any money earned from interest is profit.
Out of the 15 options listed above, I hope at least one of them will help you save money on your car insurance.
Multi-Line Discount - a family can save a lot of money by simply putting all cars, motorcycles, homes, and apartments under one insurance provider.
Limit Your Driving - If you work from home or were recently laid off, tell your agent. Many companies will reduce your premium if you drive less than 100 miles per week (varies by insurance agency).
Discount for Safe Driver - You might be eligible for a rate reduction if you have not been in an accident or received a ticket for several years.
Raise your deductible - Raising you deductible can save you hundreds of dollars every year, but make sure you have money saved to cover the higher deductible if needed.
Comparison shop - Let your agent know that you are looking at other agencies to reduce your monthly premium; it is likely the agent will pull some strings to keep you as a customer. Caution: if you find a better deal, confirm that it is not an introductory price. Many times your premium will increase to what you were paying with your previous insurance agent.
Discount for parents under 25 - Car insurance companies reduce their policy holders premium at the age of 25 assuming there have been no accidents, some insurance companies offer this reduction for parents under that age of 25. However, another reduction will not apply once you turn 25.
Full coverage or liability - determine if full coverage is still needed by checking the blue book value of your car at Kelley Blue Book. If the value of your car is worth more than the cost to repair it, keep full coverage, if not, drop down to liability.
Get insurance quotes before you buy a vehicle and choose vehicle color - the type, model and color will affect you premium. If you don't want your premium to increase stay away from red sports cars. Also popular foreign models such as Toyota and Honda might have high premiums because they are stolen regularly.
Don't buy short-term policies - There might be a penalty so buy long-term.
Don't let your insurance lapse - A lapsed insurance policy indicates irresponsibility and high-risk. Avoid this at all cost. When you are ready to renew you will notice that your cost will have jumped tremendously.
Only insure cars that you drive - The old Ford that has not been driven in years should not be insured. However, depending on the state you live in, all registered vehicles must be insured. To avoid any problems make sure you register any non-working vehicles as 'inoperable'.
Refresh your driving skills - some insurance companies offer training courses that can reduce your insurance premiums at the end of the course. There are fees for these courses, so do the math and make sure the training course is worth your money.
Avoid accidents and tickets - Speeding tickets, moving violations, and accidents can substantially increase your rates for at least 3-5 years.
Don't insure teenager driver with your car - Premiums for a teenager driver is through the roof. Instead, purchase a safe, used car and only purchase liability. You will save hundreds of dollars.
Keep your credit score high. Some insurance companies will charge people with low credit scores a higher premium because they are expected to file more insurance claims.
Pay semi-annually - This is my favorite!! A surcharge fee is generally applied to customers who pay monthly. This fee is easily avoided by paying semi-annually. Begin to save up enough money to make the 1st semi-annual payment. After you make that payment, automatically transfer the monthly insurance payment into a high-yield savings account to earn interest. When you receive your semi-annual bill, pull money from your high-yield savings account to cover your premium cost. Any money earned from interest is profit.
Out of the 15 options listed above, I hope at least one of them will help you save money on your car insurance.
About the Author:
I am frugal by nature and also want everyone to learn how to save money. Check out this site if you are looking for easy, realistic ways to save money, spend less at the grocery store, reduce your monthly bills, and learn how to use a budget spreadsheets. See you on the inside!!