Looking for straightforward ways to cut down on what you pay for car insurance?
Saving money is on the minds of many these days, and if you’re like most, you might be looking at your car insurance costs and thinking, “How can I cut down on this expense too?” With lots of companies talking about giving back, there could be more than just a few cents hiding in your policy.
While insurance agents usually ask a bunch of questions to find discounts, there might be a few things they overlooked. To help you boost your budget (and keep those savings going in challenging times), we’ve gathered some ways to lower your car insurance premiums. Take a look at these useful tips below; you might find some surprises. Putting a bit of extra money back in your pocket is simpler than you might think.
A Quick Tip About Car Insurance Costs
Before diving into the details, take a moment to understand what influences your monthly premium. It might help you in bargaining for a better rate and will surely be beneficial when comparing rates from different companies — even if you decide not to switch providers.
Insurance companies consider various factors, some of which you can’t easily change, like your age, gender, location, and the coverage required in your state. While you could move to a state with lower requirements, it doesn’t really make much sense to uproot your life just to save a bit on car insurance since it’s mandatory nationwide.
Here’s some good news – you have control over most of the things that decide how much you pay for insurance each month. Your driving record, credit score, the kind of car you drive, and your annual mileage are factors you can influence. You can also check out rates on other websites to compare.
But, keep in mind, it’s crucial to keep shopping around even if you’ve used comparison sites. They might not show you the absolute lowest price because insurance companies don’t pay them for getting you to sign up. So, don’t forget, giving them a call can still be a great way to snag a low insurance rate.
Nine Simple Ways to Reduce Your Monthly Payment
Wondering how to cut down on your monthly premium without making major changes to your life? Check out the list below!
Consider a “Green” Vehicle
You might already know that buying a hybrid or alternative fuel car can get you a tax break. However, did you realize it can also bring down your monthly insurance premium? According to Investopedia, companies like Farmers offer a 5% discount, and Travelers and Liberty Mutual provide breaks for owners of environmentally friendly cars. When you factor in fuel savings, it’s a win-win situation.
Drive Less for Savings
Let’s have a real talk moment, courtesy of the Insurance Information Institute: “Some companies give discounts to drivers who cover fewer miles each year. You could also get low mileage discounts if you carpool to work.”
It might sound like common sense. If your insurance company knows you’re driving less, it means less time on the road. Statistically, that translates to fewer chances of getting into an accident. To put it simply, if you carpool to work or live close to your job, you’re reducing the number of drivers on the road. Insurance companies often ask questions like “how many miles do you drive to and from work every day?” and “how many days a week do you drive to work?” If you carpool, bike, take the bus, or subway, make sure to let them know.
Try Behavior-Monitoring Gadgets
Many big companies use devices to track behavior and give discounts to safe drivers. For instance, Experian says that “Progressive’s Snapshot is a program where you get a discount just for joining and more discounts if you show good driving habits.” Liberty Mutual, Allstate, and State Farm have similar programs with their own discounts.
However, keep in mind that using these devices or apps comes with a trade-off. The insurance company will use them to monitor your driving habits, like your speed, distance, reaction time, and common locations. If you’re not comfortable sharing these details for a discount, it’s totally up to you.
Enroll in Driver’s Ed or Excel in School
Getting good grades in school can often lead to discounts on your monthly insurance bill. If you’re past your school days, completing a driver’s ed course demonstrates the same commitment to being a knowledgeable driver. “Before signing up for a class, be sure to check with your agent or insurance company about this discount,” recommends Investopedia. However, keep in mind that “Liberty Mutual is among several companies providing a good student discount for students maintaining a B average or higher.”
Combine Your Insurance Policies
It really makes a difference when you bundle all your insurance together in one place. Investopedia notes that Allstate, for instance, provides a 10% discount on car insurance and a 25% discount on homeowners insurance when you bundle them. You’ve likely heard companies boast about insuring your home, car, boat, motorcycle, and RV all in one go. Having all your insurance in one place also means just one payment. If you and your spouse are using different companies for car insurance, consider having one of you switch. It’s a win-win—you both get to save.
Make the Most of Group Benefits
You could score some great discounts by joining groups like professional associations, business networks, or alumni associations. For example, GEICO gives a 15% discount to military families, and Farmers provides discounts to various groups. Chat with an agent from your insurance company to figure out if any groups you’re a part of qualify for discounts. Don’t forget to check with your employer or any community groups you’re part of—they might have special group discounts with specific companies.
Adjust Your Insurance Coverage
While it’s important to meet your state’s minimum auto insurance requirements, there are ways to potentially lower your costs. For instance, you could consider reducing or removing collision coverage for your vehicle. Just keep in mind that if there’s a crash, you’ll be responsible for covering your car’s repair expenses. You might also have the option to adjust the amount of comprehensive coverage you have.
Making these changes involves some risk. If your car needs repairs, you won’t receive the same level of assistance from the insurance company. Also, removing certain coverages may not be allowed if you’re still paying off your vehicle. However, if you’re driving an older, fully paid car that may not be worth fixing, it’s worth considering a slight reduction in your coverage.
Boost Your Deductible and Drive Safely
A great way to reduce your monthly car insurance cost is by keeping a clean driving record. Companies like Liberty Mutual, for example, give discounts to those with a history of safe driving. It’s logical—insurance companies appreciate customers who don’t frequently file claims for accidents. Following the rules of auto insurance can really pay off.
Elevate Your Credit Score
The III notes that “most insurance companies use credit info to determine auto insurance prices. Studies indicate that people who manage their credit well tend to have fewer claims.” Apparently, staying financially stable also connects with driving safely and following the rules. But, keep in mind that insurance providers in California, Hawaii, and Massachusetts can’t factor your credit score into your monthly insurance premium. Remember this as you explore your options.
Maximize Your Car Insurance Savings Now
There are many other ways to cut down on car insurance costs. For instance, opting for an electronic bill not only saves trees but also money. Having a house (or at least a garage) for your car makes a positive impression on insurance companies. Recently married or just graduated from college? Check with your insurance provider to see if you qualify for any discounts.
Even saving just $10 more in your monthly budget can add up over time. Talk to an agent at your auto insurance company to find out about potential discounts. Shop around for better rates and make comparisons. If you’re thinking about a new car, consider the monthly insurance premium for each option on your list. Be a savvy shopper and make the most of your auto insurance policy.