Do you want to know how to save money on your car insurance?
Then you’re in the right place. When I was younger and I had my first car, I was shocked by how much the insurance was. It was more expensive than my father’s was, but the thing that made me realize how easy it is to flush money down the drain was when I received my first speeding ticket.
I was listening to Tina Turner’s “Proud Mary” and speeding through the gorgeous and empty roadways of rural Arizona, singing my lungs out, and I got pulled over by two police officers.
I immediately started shaking because I didn’t know what to do, but everything was fine. Except for the fact that I got my first speeding ticket, a $200 fine, and an increase in my car insurance premiums by roughly $100 a month. I had to pay the extra $100 for two years, and let me assure you, it wasn’t pleasant. But I learned from my mistakes. Very quickly.
Nowadays, with inflation at its peak and with mind-blowing technological progress, cars are more expensive than a few years ago, and insurance isn’t that cheap either.
However, I know a few tips on how to save money on your car insurance and still get all the benefits you want, so if you want to spend less on your policy, here’s what you need to do!
Before we begin with these tips on how to save money on your car insurance, let’s take a few moments to talk about all the reasons and factors that lower or increase the price of your policy.
Key factors for setting coverage rates
Location: if you live in a rural area, you might discover that it’s easier for you to save money on your car insurance compared to people who live in urban areas. The reason behind that is the fact that the coverage rates are heavily influenced by the city and the state you live in.
Vehicle type: if you drive a brand-new car or an automobile that costs you a lot of money, you might find that you need to pay more money for your insurance premiums because repairs will be more expensive in case of an accident;
Age: Senior and young drivers might be required to pay more for vehicle insurance because they’re considered to be at higher risk. But they’re not the only ones: new drivers, regardless of their age, will also have to support higher coverage rates;
Credit history: sources say that a high credit score is a sign of a financially responsible driver—a person who’s reliable and who doesn’t cause problems. Thanks to that, people who have a good credit score might be lucky and have lower auto insurance policy costs. On the other hand, having a bad credit score can increase your rates, but that depends from one state to another, so talk to your agent about that.
Driving record: it will be hard for you to save money on your car insurance if you were responsible for moving violations, an at-fault accident, or for driving under the influence (DUI) or while intoxicated (DWI) convictions on your record;
Deductible: You can generally choose the amount of money you take out of your pocket for a covered repair, but having a lower deductible will make you pay more for a premium.
Now that you know all the factors that impact the amount you have to pay for your policy, it’s time to discover the best tips on how to save money on your car insurance.
1. Update those miles
If your driving habits changed in the last few months or in the past year, you’re lucky, because it’s one of the easiest ways to save money on your car insurance. If you’re retired or work from home, chances are that you don’t use your vehicle as much as you used to.
Based on data from the Federal Highway Administration, the average American drives approximately 13,000 miles annually. As a result, those who drive less than the average are eligible for price savings from auto insurance carriers. That’s great news, so if you’re in this situation, call your insurance agent ASAP, let them know about your new driving patterns, and get all those benefits.
2. Group your policies
Even with the constant barrage of advertisements claiming that it saves money, bundling is still overlooked. To save money on your car insurance, you should think about consolidating or adding plans if you are underinsured or have multiple policies.
If you’re a homeowner, or renter, or have umbrella coverage, among other policies, you might be eligible for a bundling discount. In fact, you can frequently save more money on your car insurance by adding a renter’s policy than by paying for it, so having one will really benefit you financially.
3. Agencies can help you shop rates
Did you know that if your insurance is provided by the same firm that insured your parents, you might be able to get better and occasionally less expensive deals?
Since shopping for insurance can be a headache, most of us just renew without giving it much thought when our insurance company sends us a notification. I totally do that, so let me know in the comments below if you do the same.
If you want to save money on your car insurance, you can ask companies like Auto Insurance Specialists, a more traditional agency, or the Jerry app, which uses AI to discover the best rates, to help you find the best prices on the market.
When you insure your vehicle through an agency, they shop around for the best rates, and they do it again at each renewal to make sure you’re getting the best possible deal. Make sure you trust the company that you choose, and you’ll be good to go.
4. Increase your deductible
Many of us choose to lower our coverage or raise our deductible when money is tight without realizing what we’re giving up. Even though lowering your deductible and decreasing coverage are two great methods to lower your costs, they might not be the best options for you.
If you have full coverage insurance on an old clunker, it might make sense to convert to a liability-only plan, but it might not make sense for a car that you can’t afford to replace if it’s totaled.
Experts say that raising your deductible to $1000 or more is a cost-effective option if you have a sizable savings account. On the other hand, if you’re living paycheck to paycheck, doing the same could put you in a difficult situation when the time to make your required payments comes, so it’s always good to think of all the details before making a decision.
5. Earn discounts based on your grades
Even though they might seem like minor infractions, driving a few miles over the speed limit (like I did a couple of years ago), running through a red light, and failing to use your turn signal can have a significant effect on your rates. Even worse, moving infractions can have a major effect on your car insurance costs for a minimum of two years from the date of the ticket.
On the other hand, experts say that speeding doesn’t necessarily mean you’re going to arrive at your destination faster. According to research, you need to drive at least 100 miles at 75 mph (instead of 70 mph) to arrive 5 minutes earlier.
If you do that daily, it won’t help you save money on your car insurance because you run the risk of paying fines and higher rates due to the abrupt stops that wear down your brakes.
Moreover, sources say that the more mindful you are when you drive, the more trouble you’ll avoid. Besides helping you gain more skills and be safe while in traffic, being a safe driver will also help you save money on your car insurance.
Depending on your driving record, some companies offer incredible discounts for safe drivers, and that’s always good. So follow the rules, drive safely, and keep reading this article to discover the smartest tips on how to save money on your car insurance.
6. Defensive driving class
Did you know that taking a defensive driving class could help you save money on your car insurance? There are states where insurance companies will give you a better deal for taking these courses.
Besides helping you pay less, this opportunity is also great, thanks to the fact that people might reduce the number of points they have on their licenses by taking this course or an accident prevention one.
In the majority of cases, this option is only available for teenage or senior drivers, but these classes can be of good use for everybody, regardless of their age. Talk to your insurance agent about whether they have this option or not and go for it, because it might help you save money on your car insurance.
Don’t forget to pay attention and sign up for a course that is accredited. Keep in mind that the rules about accreditation are different from one state to another, so get informed before you go to classes.
Have you ever heard of any of these tips on how to save money on your car insurance?
7. Invest in a safer car
Besides reducing the risk of theft and other damage, parking your vehicle in a garage can also help you save money on your car insurance, as it can result in rate reductions on your premiums.
Whether you invest in an old or a new car, having one that is packed with gadgets that help you make the experience more pleasant, such as blind-spot monitoring, automated braking, and reverse cameras, can help you save money in the long run.
8. Ditch everything you don’t need
While it’s hard to decide what you should ditch from your policy, if you want to save money on your car insurance, you might want to take a few moments to analyze what you need and what you don’t.
After a few moments of thought, you might realize that not every whistle and bell in your policy is needed, such as car rental coverage or roadside assistance. Think of your needs and the benefits you want to have and ditch all the things that don’t serve a purpose.
A tip I have for you is to talk to your credit card company and ask them whether they offer roadside assistance benefits to cardholders. This might give you the chance to ditch this feature from your vehicle insurance policy and still have the option to access it when needed.
9. Invest in anti-theft devices
Another way to save money on your car insurance is by installing anti-theft devices. You can always talk to your insurance agent and ask them whether the company you collaborate with offers reduced premiums for certain gadgets.
But before you order all types of devices, analyze whether the cost of adding them will help you save money in the long run. Some sources say that LoJacks and car alarms are two of the devices that can help you save money on your car insurance, so ask your agent about them.
10. Choose the right vehicle
One of the easiest ways to save money on your car insurance is by making sure you have the right vehicle for your needs and budget. While a huge and gorgeous SUV might be wonderful and fun to drive, paying for the insurance of a 5,000-pound car can be quite expensive.
Some insurance companies offer great discounts for mild-hybrid or hybrid vehicles or for alternative fuel automobiles, so think of your needs, the place you live in, and your yearly budget for car maintenance, as well as all the policies needed.
11. Analyze your coverage
As we’ve previously discussed, dropping particular types of coverage can be a slippery slope because you can’t ever know what happens. However, the coverage you opt for should be based on your needs and the type of car you drive.
For instance, if you own an old automobile that’s on its last legs, you might want to reconsider paying for comprehensive coverage and collision coverage. In a case like this, the company will probably ask you if the vehicle was involved in an accident.
However, it might not be the best deal to pay $1,000 for collision coverage if the coverage will cost you $500 per year. Think about it and choose what’s best for you. It’s always better to be safe and to have peace of mind, so don’t rush.
12. Boost your credit score
There are many states where a big debt, a terrible credit score, and a poor payment history can harm your insurance premiums. You probably know that insurance companies don’t think of credit the same way lenders and banks do.
Unfortunately, payment history and major debts are very important for insurance purposes, especially if you want to save money on your car insurance.
Experts discovered that people who have a low insurance credit score are more likely to pay $500 to $2000 more per year, depending on the part of the state they live in. I don’t think you want to get that much money out of your pocket for a policy, so if you want to save money on your car insurance, it’s time to boost your credit score.
Even though this is something every vehicle owner must do, there are easy ways to save money on your car insurance. Don’t forget to follow the rules of the road and adjust your speed accordingly. Drive safe and have fun!
Make sure you make the right decision for you and your needs, and take this article as a guideline. Always talk to your insurance agent about your problems and ask them for details when you don’t understand something. I hope these tips on how to save money on your car insurance will be helpful, and feel free to tell us if you have any suggestions on what you’d like to read next.
Until next time, don’t forget to take care of your vehicle and maintain it for as long as possible. If you want to save money on your car wash, here’s my favorite kit for washing your vehicle at home. It’s one of the best, and it will help you save money in the long run!
Do you know any other ways to save money on your car insurance? Let us know in the comments below! Did you find this article helpful? If you’d like to read something else from the Urban Cars Blog, here’s another amazing post for you to check out next: 10 Safest Cars for Older People
