How to save money on auto insurance.
There are numerous steps that you can take to save money on your auto insurance. Of course, maybe the most effective thing to do is to not get into an accident or get a ticket - therefore the most important way to lower your rates is to just to drive safely over time, and just do it like grandmother was sitting in your passenger seat! In addition to that, and above and beyond it, there are other effective, pro-active ways to save money on car insurance bills as listed below.
The fact is that even one speeding ticket or very minor accident could raise your insurance premium. However, many people just can’t get themselves to drive slower. if this is you, or even if you have a great driving record, there are still some things you can do to save money. Some states help low-income families pay for auto insurance, there are alternative type insurance companies, non-profits that offer discounts and more listed below.
Steps to take directly with auto insurance companies to get the best rate
Looking into auto insurance companies that offer Pay by the Mile plans. If you don’t drive often, for some insurers less than 8,0000 - 10,000 miles per year, you may qualify for pay-per-mile insurance. While the driving limits are enforced, the policies can be much cheaper. Companies like Metromile or Mile Auto charge a small base rate plus a few cents per mile. This can be a great deal for people who work from home, only drive locally or that are retired or disabled and drive occasionally.
Shop for a new policy and continually get new quotes. One of the biggest mistakes people make is staying with the same insurer year after year. Rates can change, and one insurance company may charge much more than another for the exact same coverage. You can compare quotes online or call a few agents directly. Your current provider will often times not continue to offer you the best rate over the years, and shopping around every couple of years can save you money.
Studies show, including one of 100,000 people by Consumer Reports, that rates for comparable coverage can vary by more than $500 for six months' worth of coverage. Some helpful places to get free quotes include the following.
- The Zebra
- Compare.com focuses on auto insurance.
- Lemonade offers auto insurance comparison and other tools from https://www.lemonade.com/car.
- Local independent insurance brokers who work with multiple companies
Also, when looking for a new auto insurance policy, you need to get at least three quotes. Lastly, if you are considering switching your car insurance company, start shopping for a new policy well before your current policy comes up for renewal as many insurers will provide new customers with an "early shopping" discount percentage that will help you save.
Also, when seeking quotes, also try to bundle your insurance policies to get the best rates. If you have renters or homeowners insurance, ask if bundling it with your auto policy will save you money. Companies like State Farm, GEICO, and Progressive offer discounts when you buy multiple types of coverage.
Raise your deductible (if you can afford it). If you have a low $200 deductible on your car insurance policy, raising it to $500 could lower the cost you are paying for collision and comprehensive coverage by up to 30%. To save even more on your bills, raising your deductible to $1,000 could lower your premium by 40% or more. This should always be done for older cars as well.
In addition, if your car or truck is worth less than $5,000 and you don't drive far, you might not need super-low deductibles. Raising your deductible from $250 to $500 or even $1,000 can lower your monthly rate. Just make sure you have that deductible saved in case of an emergency.
Discounts for Auto Safety Features. This is becoming more common as technology continues to improve. Safety features on your automobile will also lower your car insurance payments. Topping the list of money saving safety features are driver assisted services, such as lane changes. Check to determine if the auto insurance company you are getting a quote from provides a discount for that or other safety features. Some examples of the other safety features you may get a discount for include car alarms and speed monitors on your car. Also, many insurance companies give a discount of 5% to 15% if you complete a defensive driving course which is kind of a feature, especially if you’re a senior driver or have a ticket on your record.
Understand what you are paying for. It is important to understand the different types and components of an auto or even motorcycle policy. If an owner does not understand what an insurance company is quoting them, they may buy unnecessary coverage and overpay. Knowledge is key to saving money. More on auto insurance policy terms and conditions.
Get government assistance and look for savings outside of what an insurance company gives
You need to take advantage of all discounts or state assistance programs. For example, did you know that many insurers will provide customers with a discount or your teenage drivers who have a B average or higher in school. Others include defensive driving. Some auto insurance companies will offer a 5% to 10% discount for policyholders who take a defensive driving course.
Additional examples of discounts include the combination concept, which can often knock 10% to 20% monthly premiums if you insure both your car(s) and your home with the same insurance company. Association and group discounts may also be available for if you are affiliated other associations, such as maybe you are in a military group, your alma matter may offer savings, or a professional organization. Be sure to ask for all discounts.
Low-income families can get help with car insurance from the government. These are often income and asset based. As some states offer government-supported car insurance programs for low-income families too, including government benefits that give out a free car. Other examples around insurance savings are as follows:
Other states may offer nonprofit help or discounts and some banks also offer deals around loans or insurance payments. Call your state’s Department of Insurance or visit their website to check. There are many other money saving tips and government programs (or lender support) for car expenses. Find out how you can refinance your car loan (yes, your car loan!) and save hundreds or thousands of dollars over the life of the loan.
Auto Clubs and Professional Organizations. Are you one of those people who was about to pay $150 for a hotel room, and then you learn that an AAA discount saves you 15 percent on that room? So you end up paying $128 and are happy and proud. The car insurance business is very similar.
Being a member of AAA, or other professional organizations, will almost always lower the auto insurance rates you pay. You need to check with your employer to see if there are any group insurance rates offered by your company. Check with your credit union and others. You can also ask the car insurance company representative when you inquire about the cost of the insurance policies. Some of the common groups that offer discounts on auto insurance include unions or trade groups, alumni associations, Credit unions (like AAA or USAA) as well as employer groups or military service.
Check and clean up your credit report. Whether you like it or not, your credit report and FICO scores can impact whether a car insurance company is willing to insure you, and at what rate that insurance will cost. Somebody who has poor scores or generally pays their bills late could end up paying 30% to 40% more than somebody without those credit or payment problems. you can improve your credit - even just a little - you may qualify for lower premiums. Paying bills on time and reducing credit card debt can help.
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