Having auto insurance is a necessary expense, but how much should your auto insurance cost? There are several ways to lower your premium while still maintaining the coverage that you require.
Shop around for your car insurance
There are lots of auto insurance companies out there, so don’t just limit yourself to the giants like State Farm or Geico. Some sell directly and some use independent agents. It might be helpful to ask around with friends and family to get first hand knowledge of a particular company before you buy. You might also keep in mind that the cheapest option isn’t always the best option. Do your own research to make sure that the company has a good reputation of customer service and paying claims.
Check auto insurance rates before buying a car
Different cars come with different auto insurance premiums due to a number of factors. Many companies offer discounts for advanced safety features such as automatic braking or blind spot warning. Other factors that influence the cost of auto insurance are the value and the cost of repairs. If you are looking at a Mercedes, it would be reasonable to assume that it would cost more to repair than say, a Toyota Camry, thus resulting in a higher cost for comprehensive and collision coverage. A good place to start might be to do some research on the safety features for the vehicle you are thinking about buying. Do some research on the cost of insurance for a particular car before you purchase it. That way you can avoid some unexpected expenses.
Raise your deductible
If you’re willing to pay a little more in the event you have to file a claim with your auto insurance company, raising your deductible can significantly lower your premium. Before you do, make sure you have some money set aside to pay the higher deductible.
Get the right coverages for your vehicle
You might not need all the coverages that your auto insurance can provide for your particular car. If you just drove off the lot with your brand new luxury car, it’s probably a good idea to have all the coverage you can get to protect, instead of the minimum amount of auto insurance that the state requires. However, if your car is old and has a lot of miles on it, it might not have a high enough value to justify paying for comprehensive and collision coverage along with the deductible that goes with it. As a general rule, if your car is valued at less than ten times the insurance premium you’re paying, it might not be cost effective to keep those additional coverages.
It’s no secret that a bad driving record is a quick way to raise your auto insurance premiums. Having lots of tickets and accidents will make auto insurance companies see you as a higher risk, thus charging you a higher price for auto insurance. Accidents happen, but do what you can to avoid driving aggressively and speeding, it will save you money in the long run.
Maintain a good credit score
Your credit score can have a significant influence on your cost of auto insurance. Paying your bills on time and keeping your credit card balances low is a good way to keep a good credit score. You might be wondering why would my credit score affect my car insurance premiums? Well, research has shown that a person’s credit score can accurately predict the likelihood of an accident. A person with a good credit score is less likely to file a claim while the opposite is true for someone with a poor credit score. Many auto insurance companies base their premiums on research data and statistics, so you’ll want to make sure this statistic looks appealing to them!
Bundle your insurance
If you own a car and a home, you’ll likely need insurance for both. Many auto insurance companies also provide home, RV, or motorcycle insurance, and offer discounts for purchasing two or more types of insurance from the same company. Your auto insurance company might also provide a discount for having more than one vehicle on your auto insurance policy.
Ask about mileage-based insurance
Due to the coronavirus pandemic, many people are working from home and driving less, and driving less means a lower likelihood of getting in an accident! The good news is many auto insurance companies are offering reduced premiums for this. For instance, with Progressive Snapshot, Progressive can track your driving habits as well as the amount you drive and you could be eligible for a pretty good discount.
Ask about other discounts
There are a number of discounts available through different insurance companies. Having continuous auto insurance coverage or owning a home are just a couple ways to get your cost of auto insurance lower.