Whether you drive a classic VW Beetle or a beat-up ‘02 Accord, car insurance is always pricey. It can be a never-ending battle getting the best (or at least a decent) rate on your policy. You absolutely need to have auto insurance or you’re at risk to spend even more money on fines, or cause financial harm to others.
Car insurance doesn’t always have to break your bank. Contrary to popular belief, there are many ways to save a ton of money on your premium by exploiting discounts. Various practices from keeping track of your credit score to checking your coverage every few months can save you hundreds of dollars on a yearly basis.
Let’s be honest, whether you’re wealthy or poor, saving money is always a good thing. So how do you save money on yet another monthly bill? To give you an idea, we’ve compiled the top five ways to save a buck or two on your auto insurance premium.
#1 – Check That Credit Score
Many insurance consumers don’t realize how much their credit score actually affects insurance rates. California, Massachusetts, and Hawaii are the only states that do not allow car insurance companies to base their premiums on consumers’ credit scores. So, if you live in those three states, this section will unfortunately do you no good. But, if you do not live in those states you are most certainly being judged on your credit score by every insurance company big or small.
The best way to combat this judgment is by making payments on time, paying above the minimum payment, and never letting your credit card debt reach above 40% of your total budget. Debt can absolutely ruin your life, so be sure to combat it in every possible way. Using these practices will improve your credit score quickly, which can lower those insurance premiums drastically.
#2 – Re-check Your Coverage
Car insurance coverage is very important. It can make or break you in different situations. Most insurance coverage ranges from low to high coverage. High coverage will cost you more month to month, but will save you out-of-pocket money if you were to get in an at-fault accident. Low coverage will be the cheapest rate monthly but might bite you in the butt if something happens on the road.
Checking your coverage every few months or annually will reassure you that the coverage you have is actually necessary. There are a lot of details when it comes to auto insurance policies so make sure you need the coverage you have. If you’re paying for coverage you do not need, you could be blowing money that you should be saving. Call or go online to your policy and be sure that everything you pay for is actually necessary.
#3 – Shop-Around Before You Buy
If you don’t have car insurance yet, your best bet is to shop around to all the different companies. And even if you do have car insurance, you should still shop around! There are thousands of different insurance companies throughout the United States that all claim to have better coverage than the other companies for a cheaper price.
Small companies may give you more coverage for your buck, but large companies will usually be cheaper. Comparing quotes and coverage levels is a sure-fire way to save money on your premium. Prices range drastically so you could end up saving thousands a year if you do the right research.
#4 – Discounts
Discounts are extremely important when it comes to auto insurance. There are discounts for many different things that most people don’t even know about. Checking with your insurance provider is the best way to know if you’re getting all the discounts you should be getting.
The most popular discount is usually for students. The average teenager is usually on their parents’ auto insurance policy. If this is you, there is a way your child can help you out significantly! All they have to do is get good grades. The discounts are given to students who are in school full-time, have a 3.0 GPA, and are under 25 years old. This discount alone can save you hundreds of dollars a year.
Speaking of teens, as an honorable mention, one of the best ways to save on car insurance is by getting older. Teens are known to insurers as “high-risk” drivers. They have almost no driving experience and top the charts for speeding, accidents, and citations. Since we can’t make ourselves older it didn’t make our top five, but every year you get older, car insurance rates will drop.
There are loads of other discounts that differ from company to company. The most popular is a good driver discount, which consists of having no citations or accidents. An important thing to remember is that insurance companies are always changing. There are new discounts for different things all the time.
#5 – Watch What Kind Of Car You Buy!
Though it’s at the bottom of our list, the kind of car you drive is one of the most important factors insurance companies use to determine your policy rate. If you have that little red Corvette, you will certainly be paying a lot more than a soccer mom with a minivan.
Again, this stems from the “high-risk” driver. The faster your car goes, the higher risk you have of speeding or getting in an accident. Plus, expensive cars have expensive parts and maintenance, so they’re more costly to repair. Insurance companies know that minivans won’t usually speed through residential neighborhoods to get to practice or requiring thousands of dollars in maintenance every year.
So, be careful what kind of car you purchase, and keep in mind what the insurance from car to car may cost. If you’re a classic car lover, be ready to pay about double what a normal car would for insurance.
We all know how frustrating the entire car insurance process can be. From pricing to talking to an automated voice, dealing with auto insurance is never peaches and cream. The worst part about car insurance is, and always will be, how much you have to pay.
There are quite a few different ways to assure you aren’t overpaying, but these five are the best practices you can use. Hopefully, we can help save you some green every month with these five tips!