15 Strategies to Lower Your Auto Insurance Premium
Save Money on Insurance With These Tips
Owning and maintaining a car costs a lot of money, but it doesn't have to leave you broke. By doing a little bit of research—or even just being part of certain demographic groups, like being a woman for example—you may be able to find deals and discounts that save you money when it comes to insurance.
Here are 15 strategies to help you reduce your auto insurance premium.
Reduce Coverage on Older Vehicles
If your car is older and you've already paid it off, consider eliminating your collision coverage. Collision coverage pays for any damage that you cause to your vehicle, and it makes up a big portion of your insurance cost.
Use One Insurance Company
Group all of your insurance policies—auto, home/renters, etc.—with one insurance company, and many companies will provide a bundling discount. This could save you up to 10% on your premium
Raise Your Deductible
Slash your auto premium drastically by raising your deductible—the amount you pay out of pocket when you make a claim. The difference between a $250 deductible and a $500 deductible is usually quite substantial, and the difference between a $250 deductible and a $1,000 deductible is even bigger. Decide how much you can afford to spend out of pocket; then, adjust your deductible accordingly.
Get a Quote Before You Buy
Before buying a new vehicle, call your insurance agent to find out how much it will cost to insure it. Premiums can vary widely based on the make, model, and year of a vehicle. This is one instance where smart shopping can pay off.
Safe drivers are rewarded with better insurance premiums. Avoid speeding and stay out of accidents, and you may save 5% or more on your premium. Most companies will further reduce your rate every time you go three years without a traffic violation.
Are you an infrequent driver? If so, tell your insurance agent about it. Less time on the road means fewer opportunities to get into an accident, and this often translates into a lower premium for you. Are you a carpooler? In that case, be sure to mention it. There's more than one way to earn the low-mileage discount.
Buy a Safe Car
Choose a car with added safety features like airbags, anti-lock brakes, electronic stability control, and automatic seat belts. Your smart choices may be rewarded with more discounts.
Seek Teen Driver Discounts
Insuring a teen driver can be expensive, but there are things you can do to minimize the expense. Ask about a good-student discount if your teen carries a B average or better in school, and check to see if taking a safe driving course could result in a second discount. These two questions could net you a savings of 5% to 25%.
Skip Monthly Bill Pay
The high cost of insurance may make monthly billing seem like a good idea, but you'll usually pay for the convenience with add-on fees. To avoid these extra charges, request to be billed every six or 12 months instead (and ask for auto-billing to save even more).
Note: If the large annual bill makes you nervous, you can set up a monthly savings plan. Just divide your premium by 12 and deposit that amount into a savings account each month. This will ensure that you'll always have the money when the bill comes due.
Protect Your Car From Theft
Garage-kept cars and cars with alarm systems are less likely to be stolen, and therefore they're less expensive to insure. Be sure to ask your insurance agent if your car qualifies for a theft-deterrent discount.
Some insurance companies will give you a discount if you etch your car's VIN number on the windows, install wheel locks, or have an ignition cutoff switch. These lesser-known discounts are certainly worth asking about.
Skip Roadside and Car Rental Coverage
Your auto insurance policy probably comes packaged with a lot of extras that you don't need, roadside assistance and car rental coverage being two common ones. Go over your insurance policy line by line and ask about removing any coverage that you don't need.
Improve Your Credit Score
Many insurance companies now use your credit score as part of the criteria for determining the cost of your insurance premium. To ensure you're getting the best deal possible, be sure to pay your bills on time and to contest any credit reporting errors that you find on your report.
Work Your Senior Status
If you're over the age of 55, you may be eligible for more discounts. Check to see if your insurer offers a discount for retirees or for taking a defensive driving class. Also, check to see how AARP's senior rates compare to your current premiums.
Work Your Connections
Are you in the military, a teacher, or part of some other professional group? If so, check with your employer and your insurance company to see if any group insurance discounts are available. GEICO offers a military discount up to 15%, for example, while Farmers offers discounts to a number of different groups.