How To Save money On Car Insurance

Having adequate car insurance is both smart and prudent, but there’s no question that it adds to the expense of driving. The good news is that premiums can vary by hundreds of dollars depending on a number of factors. Review your coverage and follow these practical steps to reduce the bottom line on your auto policy.

Shop around for your car insurance

Prices differ from company to company, so it pays to shop around. Get at least three quotes, from both different insurance companies and different types of insurance companies—that is, those that sell through their own agents; those that sell through independent agents; and those that sell directly to consumers via the phone, an app or the Internet.

Remember, these are the people you’ll rely on if the worst happens and you need to make a claim. Keep in mind that the lowest price isn’t always the “cheapest” option. Make sure the company you choose is reputable, and that you’re comfortable with the service you get from the insurance professionals you speak to.

Compare insurance costs before you buy a car

Auto insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of car theft or personal injuries, or for cars that are known to be safe.

Raise your deductible

By choosing a higher deductible on your car insurance, you can significantly lower your premium costs. Of course, be sure you have enough money set aside to pay the higher deductible in the event you have a claim.

Reduce optional insurance on your older car

As a rule of thumb, if your older car is worth less than 10 times the insurance premium, having collision and/or comprehensive coverage may not be cost-effective. To find out whether this is true for you, check the value of your car. You can look up what your car is worth for free on websites such as Kelley Blue Book, National Association of Auto Dealers (NADA), and TrueCar.

Bundle your insurance and/or stick with the same company

Many insurers will give you a discount if you purchase two or more types of insurance from them—such as homeowners and auto—or have more than one vehicle insured. There are no guarantees so do your homework and compare costs for a multi-policy discount from a single insurer with buying your insurance separately from different companies.

Maintain a good credit history

Many insurers use credit information to price auto insurance policies. (Research shows that people who effectively manage their credit make fewer claims).

Take advantage of low mileage discounts

Some companies offer discounts to motorists who drive less than the average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

Ask about group insurance

Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or from other associations. Check with your affiliated organizations to see what they offer.

Seek out other discounts

There are other discounts that your insurer may offer to policyholders. For example, some companies offer discounts to those who’ve not had any accidents or moving violations during a specified period, or who have taken a defensive driving course.

If there is a young driver on your policy who is a good student, has taken a driver’s education course or is away at college without a car, you may also qualify for a lower rate.