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These days, every dollar counts. And saving money anywhere you can is important. This is especially true when it comes to automotive insurance. The premiums charged for automotive insurance continue to rise and finding ways to keep the monthly insurance payments lower is helpful. And there are many steps that people can take on their own to achieve lower auto insurance premiums. Here then are 12 tips for saving money on car insurance.

12. Choose Your Car Wisely

It is not a myth that the type of car a person drives influences their insurance rate. In fact, insurance rates are set largely based on the frequency of claims, and average cost of claims, for each make and model of car. For example, four-wheel drive vehicles often costs more to insure because the cost to repair them after a crash is more than a two-wheel drive vehicle. Ditto for foreign luxury cars such as BMW and Mercedes, whose parts can be more difficult to order and cost more than for most American-made vehicles. Insurance companies even consider how often a particular vehicle is stolen, notably sports cars that are attractive to teenagers and young drivers. The bottom line is that choosing a lower risk car such as a Ford Focus, for example, can reduce the insurance premiums you pay right off the bat.

11. Bundle Your Home and Auto Insurance

Most insurance companies offer discounts as high as 10%, or more, for customers that bundle their home and automotive insurance. If your home and auto insurance are currently with a different companies, consider moving the home insurance over to the company handling your auto insurance and bundle them together. This can be done relatively quickly and painlessly, and it is another way to achieve a savings on both the automotive and home insurance premiums you are paying each month. Some insurance companies also enable their customers to add other types of insurance to the bundle such a life insurance and insurance against critical illness, and they provide even deeper discounts for the added business. If you have multiple insurance policies, put them together with one company to yield the highest discount possible.

10. Ensure You Are Getting Multi-Vehicle and Age Savings

Most insurance companies offer multi-vehicle savings for customers that insure more than one car with them. They also provide discounts for people based on their age. Someone who is 40 years old and has been driving for nearly 25 years with a good driving record should not be paying as much for auto insurance as a 19-year-old who has only had their driver’s license for three years. However, it is important for people to ensure that they are getting these and other savings from their insurance company. Many people are surprised to learn that multi-vehicle savings and discounts based on experience are available from their insurance company, and that their insurance company has not told them about these available savings or offered them automatically. Never hesitate to ask your insurer if you are getting all the available savings and discounts that the company offers.

9. Add More Security Measures

Most vehicles made today come with a factory-installed alarm system, and insurance companies factor this in when calculating a policy. However, many insurance companies provide further savings to drivers who add additional security measures to their car that are above and beyond what comes from the manufacturer. A second alarm system or immobilizer, as well as a camera system, often lead to savings for car owners. Be sure to check with your insurance company to see if having added security features in a vehicle can further reduce the insurance rates being charged. You may be surprised by the answer. And, a lot of additional vehicle security systems can be purchased at retail outlets such as Walmart for little money and easily installed by the driver.

8. Raise Your Deductible

The rule of thumb is that the higher the deductible is, the lower the insurance premium. For this reason, it may make sense for car owners to choose $1,000 deductible rather than a $500 deductible. Some auto insurance companies let people go as high as $2,000 on the deductible. And having a higher deductible should not be an issue as long as you can afford to pay more out-of-pocket should something happen to your car, truck, minivan or sport utility vehicle. In any event, it never hurts to discuss the amount you could save from having a higher deductible with your insurance provider. If the savings on the monthly premiums are significant with a higher deductible, then it is definitely worth giving it some thought.

7. Cancel Unnecessary Coverages

There are some coverages that come with auto insurance that are necessary and others that are not. For example, if your vehicle is damaged will you need the insurance company to pay for a rental car or put you up in a hotel? Likely not if you live close to family and friends. So be sure that you are not paying for these unnecessary costs with your auto insurance policy. Get the insurance company to provide an itemized break down of everything included in the policy and how much each item is costing you. Then eliminate all the coverages that you feel are not needed, or that you are unlikely to use in the event of an accident. You’d be surprised what’s hiding in the fine print, and what you are paying for each month.

6. Cancel Collision Coverage

People who are driving a really old car should give serious thought to canceling their collision coverage. First of all, collision coverage is usually a significant portion of any insurance premium. Second, collision coverage likely isn’t needed if the car being driven is more than 10 years old. This is because the value of an older vehicle with lots of miles on it is extremely low—so low that it may not be worth paying to repair the car in the event of a collision. If the car gets into an accident, the smart thing likely would be to just buy a new car. As a rule, if the value of a car is worth the same or less than the deductible, the driver would be better off to cancel the collision coverage and put the money they save towards the cost of buying another vehicle. Talk to your insurance company about whether this kind of move is possible. Not all insurers let their customers cancel collision coverage. But if it is possible, and your car is old, it would be a smart decision.

5. Don’t Drive Your Car to Work

The frequency that a car is driven, and the time of day when it is driven, are factored into insurance quotes and policies. People who drive their car to work each day in rush hour traffic pay higher rates for auto insurance than people who take the bus to work and only drive their car on the weekends when traffic is not as heavy. The way insurance companies look at it, the more you drive your car, the higher the likelihood that you will get into an accident. If you can afford to use public transit to get to and from work, it will save you money on your auto insurance. It will also keep the number of miles down that you put on your car each year, which is another thing that can influence the cost of insurance.

4. Take a Defensive Driving Course

This is especially helpful to teenagers who are relatively inexperienced drivers, or parents of teenagers who are paying to insure their kids while they drive. Most insurance companies look favorably on young or new drivers who have taken a defensive driving course, or other safety course that teaches them to be more cautious and safe behind the wheel. Discounts of 5% or more are often provided to young drivers that have taken defensive driving courses. Insurance companies also provide discounts for teens who have taken a driver’s education course at their high school. In general, younger drivers (particularly teenagers) are the most expensive segment of society to insure when driving a car. This is because they are statistically the most likely to drive recklessly and get into an accident. So anything that can be done to lower the cost for a teen driver is important.

3. Shop Around for Auto Insurance

One of the best ways to save on auto insurance is to shop around and get quotes from different insurers. This enables people to compare and contrast, then choose the most affordable insurance available to them. And trust us, not all auto insurance policies are the same. Significant savings can be found for people who are patient and take the time to shop around. Best of all, the needed insurance quotes can easily be found online from the comfort of home. Taking the time to check auto insurance rates online will ensure that you’re getting the best rate possible based on all the factors already discussed.

2. Purchase Auto Insurance Online

Most insurance companies today prefer for their customers to buy auto insurance from them online. This is because it does not cost the insurance company anything. Most insurers frown on insurance brokers because they have to pay the broker for the business they bring their way. So enamored are insurers with having customers purchase auto insurance through their website, that they offer discounted rates to people who go the online route. This is another small thing that people can do to save money on their monthly auto insurance premiums. All the savings add up, and the reality is that it is often easier and more convenient for people to buy auto insurance through the Internet than in-person or on the telephone. When looking online for the best possible quote, take note of the companies that offer a discount for customers that buy through their website.

1. Become a Better Driver

Nothing impacts the amount a person pays for auto insurance more than their personal driving record. Keeping a clean driving record is the best way to keep auto insurance premiums down. Tickets and convictions negatively impact the insurance rates a person pays for up to three years. Accidents can affect auto insurance rates for six years or longer. In this situation, it literally pays for people to be as careful and diligent as possible on the roads. In the end, nobody pays higher insurance premiums than unsafe drivers. Driving safe each and every day is really the best way to keep insurance rates as low as possible. And the longer a person has a clean driving record, the lower and lower their insurance costs will be. So drive safe, be careful and save money in the process.

 

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