7 Ways to Save Money on Car Insurance
There is so much competition in this space that rates are constantly changing.
If you take the time to compare a few rate quotes, you can realistically save $1,000 or more per year.
But that's not all. There are several other strategies you can use to ring every penny out of your insurance policy.
Here are the top 7 ways to save money on your car insurance:
1. Comparison Shop Rates At Least Once Per Year
There are few things in life that give you big rewards for such little effort.
Comparison shopping insurance rates is one of them!
It's shocking how much money consumers leave on the table when it comes to car insurance payments.
Take a few minutes and compare your current rates - the difference will likely surprise you.
2. Set Your Deductible to $1,000
The deductible is what you agree to pay out of pocket in the event of an accident or theft.
So many people pay extra to keep the deductible low while maintaining a minimum level of liability coverage. This makes no sense.
The purpose of car insurance is to protect your assets, so you should keep a high deductible and use the money saved to increase your liability coverage.
Most experts recommend setting your deductible to at least $1,000 for comprehensive and collision. This can save you up to 40% on your premiums.
3. Maintain or Improve Your Credit
Paying your bills on time and maintaining a good credit score is essential to getting the lowest rates on car insurance. (See: Why Your Credit Score Can Affect Rates by 50%).
You can check your credit score here. Anything above 720 is considered prime and won't negatively affect your insurance rates.
4. Report Reduced Mileage
If you start working from home or become unemployed, you will likely be driving a lot less.
Insurance companies provide reduced rates for those driving less than 7,500 miles per year, so it pays to let them know when this change occurs.
5. Take Advantage of All Discounts
There are tons of discounts offered by different insurance companies - some of which can save you up to 30% on your premiums.
But you need to ask for them - insurance companies don't always apply the discounts automatically. (See: Common Discounts Offered by Car Insurance Companies)
6. Choose the Right Car
Some cars have much higher insurance rates than others.
It pays to keep your options open to at least 2 or 3 different models and compare insurance rates before making your final decision. (See: The Best and Worst Cars for Car Insurance).
7. Minimize Cost for Teenage Drivers
Having a teenage driver on your policy can increase your premiums by 200% or more!
If your teen goes away to college, let the insurance company know. Some will provide discounts as long as they keep their driving to a minimum.
Make sure your teenager maintains good grades and sign them up for a drivers education course to help lower their rates.
All of these tips should help you save upwards of $1,000 per year on car insurance.
Remember, the most important step is to compare rates from different providers:
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid