Just because its a legal requirement by the government to insure your car, this does not mean it has to cost an arm and a leg to get a policy for your car. Statistics show that there are lots of people that overpay to insure their cars.
The good news is that this doesn’t have to be you and that there is a lot you can do to save money on your car insurance. The cost of vehicle maintenance is on the rise. Your insurance costs will also increase with an increase in your vehicle costs.
However, there are measures you can take to ensure that your insurance costs are at an affordable low.
1. Buy A Car That Is Less Likely To Be Stolen
The National Insurance Crime Bureau (NICB) researched the cars that are most likely to be stolen. Older cars tend to increase your chances of theft. Older cars are prone to theft because they are less conspicuous and lack modern anti-theft systems.
Thieves have trained to handle older anti-theft systems. That is why, even in movies, you will find thieves picking on the older vehicles. NICB made a list in 2017 of the top ten most stolen cars.
The list has been dubbed Hot wheels. The List Includes:
- 1998 Honda Civic
- 1997 Honda Accord
- 2006 Ford Pickup
- 2004 Chevy Pickup
- 2017 Toyota Camry
- 2016 Nissan Altima
- 2001 Dodge Pickup
- 2017 GMC pickup
- 2015 Toyota Corolla
- 2008 Chevy Impala
Some vehicles like the Honda Civic, the Honda Accord, Toyota Corolla and Chevy Impala featured in the 2016 Hot Wheels report. There is no need for panic if your vehicle appears in the list above.
There are some measures you can implement to ensure its safety. They include:
- Ensure your vehicle is always turned off after you park it.
- Use updated anti-theft systems on your car.for example car alarms, kill switches, tracking systems, and tire locks.
- Ensure you lock everything up, including the trunk and steering wheel when you are away from your vehicle.
- Ensure you park your car in a highly visible and well-lit spot. Furthermore, make sure the front end is facing an obstacle if possible.
- Ensure you etch your Vehicle Identification Number (VIN) on your windows. I will make your car harder to sell.
2. Shop Around To Get Quotes From Different Insurers
Companies offer varying auto insurance costs. You should analyze auto insurance quotations from at least three insurers. There are numerous available sources of information on auto insurance quotations of companies.
Sources of Auto Insurance Information
- You May Start With the Internet. You can get the information from official websites or reviews that compare various companies.
- You can Call up the Insurance Company to get the information directly from the service desk.
- Lookup Your State Insurance Department. They provide a catalog that compares the insurance prices of major auto insurance providers.
- You Can Rely on the Rating Agencies to provide price and cover comparisons of auto insurance providers. Some examples of rating companies include Standard & Poors and Am Best.
- You can use recommendations from friends and relatives.
- You Can Rely on Insurance Agents for the Information. Insurance companies could use their agents or independent agents that carry the company’s name.
How to Compare Auto Insurance Companies
You will need criteria that will guide you to settle on a specific company.
- Check for discounts on car insurance
- Look up their complaints ratio.
- Pick a coverage and compare it across different companies.
- Research the consumer record on car insurance.
You can use the state auto insurance information, which is a compilation of insurance covers across various states.
3. Pay Your Annual Premium All At Once
You will find it cheaper to purchase your insurance on an annual basis. You will save yourself money, and you will also save the insurance company time and money used to process the insurance premium each month.
Who Should Use the Annual Premium?
- People with a fluctuating income
- People who get a tax-refund
- People who get annual bonuses.
- You can rely on it if you will have a hard time keeping up with monthly payments.
- People who want to save money.
Call up your auto insurance company and establish the discount you get for paying an annual premium. It would be best if you analyzed multiple companies to see which one offers the best discount.
The annual premium will give you ample time to get money for the next premium payments, unlike monthly premiums that may get canceled due to late payments.
Furthermore, some companies offer more discounts for using electronic and automated payments. Automated payments will take the hustle of transacting away. What is your current insurance premium?
4. Combine Your Insurance Policies
You have the option of paying your life, car, and home insurance separately. You may choose this strategy to benefit from an insurance policy a company has. For example, you may settle for one company with the best car insurance, another with an excellent home insurance package and so on.
Yes, you may benefit from individual discounts like when you opt to pay annually. However, you will not be saving on insurance costs. If you choose to combine your insurance policies under one company, you will get a greater discount benefit.
The total insurance cover may amount to $3000 to $5000. The total amount is affected by factors like your home value, your type of car, your health, etc. Furthermore, companies use insurance package discounts as a customer retention strategy.
Customer turnover and customer processing is an expensive endeavor for insurance companies, so they seek to retain the customers they already have. If you combine your insurance coverage, you will be able to benefit from the huge discounts.
You will also save time to sort and pay your insurance benefits to different companies as one company will be in charge of all your insurance coverage. Have you already combined with your insurance policies, or do you pay them separately?
5. Buy A Cheaper Car
Top of the line vehicles are expensive in terms of cost, and this impacts the cost of insurance. You will find that these vehicles have a high maintenance cost and their spare parts may not be readily available.
Most companies will give you a discount if you buy a hybrid or alternative fuel car. You will save on auto insurance costs and the environment at the same time. Cheaper cars are usually the ones that have been longer in the market.
Insurance companies have done their research on such cars and tend to have insured them in the past before. Hence you will be able to benefit from discounts, for example, if your car is low on theft or repair cases and complaints.
6. Improve Your Credit score
Your record as a car owner or driver is a major factor when it comes to insurance costs. Some insurance companies insurance scores based on credit. They argue that the rate at which you may file claims is related to your credit history and how you manage your personal life.
Insurance companies take credit scores very seriously. It is evident when you compare a driver with a good credit score but many insurance claims and a driver with a poor credit score and no insurance claims.
The former is likely to get a better discount as compared to the other driver. If you take a business perspective, you will know that insurance premiums are a recurring cost. Thus a person with a poor credit score has a risk of missing out payments, especially in monthly premiums.
Insurance companies have an insurance score on drivers. Your credit score is one of the factors used to determine your insurance score alongside your driving record and other factors. You should take your credit score seriously and try to keep it high as it may outweigh the other factors.
Be on the lookout for an error on your credit score and make sure it is corrected as it will affect your insurance premium.
7. Install An Anti-theft Device To Get A Discount
As much as you care about the maintenance of your car, you should also prioritize safety. Car theft is a global menace, and you may want to avoid the costs and the feeling of losing your car.
You may not entirely have the power to control it, but you may reduce the odds and risks of having your car stolen.
Anti-theft devices were invented to help secure our vehicles. There are two types of anti-theft devices. They are electronic and mechanical anti-theft systems. Mechanical theft systems are meant to immobilize your vehicle.
Wheel locks, gear shift locks, door locks, steering locks and more are examples of mechanical immobilizers. Electronic theft systems enable remote immobilization and digital measures to prevent car thefts. Some of them include tracking systems and alarm systems.
Your car key is also part of the electronic system as they lock the ignition and doors. Mechanical and electronic safety systems work hand-in-hand to ensure the safety of your car. Furthermore, they offer another significant benefit which is low insurance premiums.
How Do Anti-theft Systems and Car Insurance Costs Relate?
Anti-theft systems reduce the chances of a stolen case for your car. This will reduce your chances of filing claims for car theft. As a result, your company will offer a discount for low insurance premiums.
Your insurance company will tell you the anti-theft devices that are associated with low premiums. The most common are Lojacks and car alarms. You may also be eligible for a reduced deductible if thieves outsmart the recommended anti-theft system.
8. Research Additional Discounts
There are many other discounts that will help lower your insurance premium. For example, you may be eligible for a discount if you have no moving violations or accident records for numerous years.
The Following Are Some of the Most Common Discounts in Insurance Policies:
- Low annual mileage discount
- Long-time customer discount
- Multiple-car discount
- College students not at home
- Higher deductibles
- No moving violation within 3 years
- No accidents in 3 years
- Students with good grades.
- Good credit score
- Anti-theft device discount
- Combined policies discount.
Insurance companies use discounts to retain customers and attract more. The above discounts are not available in all states and companies. It would be best if you asked which ones are available before you purchase a package.
Always keep your eye on the final price before you get excited about the number of discounts a company presents. You may find a company offering a few cuts on their insurance policies but has a low final price as opposed to one with numerous discounts but a high final price.
9. Take A Defensive Driving Course
A defensive driving course is a course that equips you with the skills necessary to become a safe driver. It is meant to help you manage unexpected situations on the road. For example, drunk drivers, distracted drivers, poor roads, poor weather, for example, a snowstorm, and more.
You will pick up skills like monitoring the speed limit, managing poor weather, avoiding distractions, and how to handle unexpected situations on the road. The first benefit you will gain from a defensive driving course is safety skills.
You will then be eligible for a discount from your insurance company. The driving costs and discounts may not match, but the course is worth it. Insurance providers offer this discount as the course will lower your chances of filing claims.
You will need to inquire from your insurance provider if they have listed such a discount. Most insurance companies will issue a discount if you have taken the course voluntarily. You might be ineligible if you had to take the course because of a ticket or court order.
However, some states and companies will make an exception.
There may be some additional conditions for getting a defensive driving discount. You may need to meet certain age, you may be required to complete the course within a minimum timeline, and you will need documentation as proof.
Furthermore, the discount does not extend for a lifetime as some companies will require you to retake the course over a given period. The most common is for two years. Various insurance companies will offer different defensive driving discounts.
10. Increase Your Deductibles
A deductible is a fee you pay from your own pockets to cover a particular expense. When it comes to insurance you set a fee that you will pay before the insurance company can cover the rest of the cost. You will need to pay deductibles in cases of theft damage or accident.
The deductible amount depends on your insurance policy. In most cases, you will set the amount between $250 and $1000. The amount of the deductible you choose has a relationship with the insurance premium cost.
A low deductible amount will mean a high insurance premium, and a high deductible will mean a lower insurance premium. Talk with the insurance agent to explain the deductible policy of the insurance provider.
However, we advise you to increase it if you wish to reduce your insurance premium. Please also read on How You Can Eliminate Your Credit Card Debt In 5 Simple Steps.
The auto insurance premium cost is expected to continue to rise in the foreseeable future. However, the tips above will help you find loopholes to keep your insurance policy at an affordable minimum.
We advise that you combine all the tips rather than focusing on one. Also when it comes to discounts, try and pursue all the cuts you are eligible for to reduce your insurance premium.