Car Insurance Insurance

15 Ways to Save Big on Your Car Insurance

Car insurance is a necessary expense in your budget. In this article, we will discuss strategic measures or ways to save big on your car insurance.

  1. Consider insurance expenses when buying a car

The cost of your car insurance is partly based on the cost of your vehicle, repair cost, overall safety record, and the likelihood of burglary. So the more costly your car is the higher your premiums. Do not buy an expensive car if you can afford the cost of premiums.

If your car has features that reduce theft and accidents, your insurer will offer you some discounts. Also, research the difference between insuring a new and used vehicle. So before purchasing any car, check its conditions and safety ranking from the Insurance Institute for Highway Safety website.

If you want to save more, consider switching your huge SUV with a smaller vehicle. This is because smaller vehicles are easy and cheaper to repair compared to guzzlers. But before changing, talk to your insurance agent and ask about the car you’re looking to buy and how it will affect your premiums. 

Read Also: Important questions to ask your car insurance agent

  1. Take advantage of your mileage

Upon signing up for car insurance, your insurer will ask several questions, including the number of miles you drive your insured vehicle per year. If you use your vehicle daily to work, you will probably pay more premiums than someone who uses their car about three times a week.

This is because your mileage is likely to be more. So, you can use mass transit several times a week to reduce your mileage because the lower your mileage, the higher the chances of a discount. 

Before signing on the dotted line, ask your insurer about the company’s mileage thresholds to ensure that your sacrifice is worth it. Also, ask your insurance company to check how many miles you are currently using, and you might find yourself getting an improved insurance quote.

  1. An excellent credit rating

Your credit score is not only useful when taking a loan; insurance companies also make use of it when determining the cost of car insurance. A higher credit score shows your insurer that you are responsible, and the likelihood of filing claims for minor accidents is close to zero.

And this qualifies you for better rates since your insurer does not have to be wary of your driving habits. Take measures to fix your credit score if it’s low to save big on your car insurance.

  1. Pay for your policy in full and upfront 

Insurers love clients who simplify their job by paying their premiums without being followed up. As a result, they offer discounts to encourage such behavior. For instance, if you pay your car insurance policy in full; instead of monthly premiums, or several months at a go, your insurance company will afford you a certain discount. 

You can also opt to set automatic payments such that your premiums are paid at that date, and the chances of missing payments are low. Ensure that you have money in that account every month close to the due date to avoid bank overdrafts or missed payments, as you may be fined by both the insurance company and the bank.

  1. Let your insurer track you

This is a new strategy car owners use. Car insurance companies use a telematics device to track drivers; the app communicates when you drive, how far, and your driving habits. So, if you accelerate, brake suddenly, or trigger safety systems such as automatic emergency braking, airbags, or stability control, your insurance company will know.

Although some items such as speeding tickets or collisions can take several months before reflecting on your driving record, your insurer will be informed of your driving habits through the device data.

If you are a responsible driver, you can let your insurance company install the tracking device. It will help lower your insurance premiums. But if you love racing, then do not consider having the tracker. The upside is if your car is stolen, it will be easy to find it using the tracker.

  1. Remove all the coverage you do not need

If you have an older vehicle whose cost is 10 times less than the insurance policy, you should consider any other type of coverage other than collision or comprehensive. This is because it is not cost-effective as it has a low value. Also, check if all the add-ons are necessary enough to retain; if not, have them dropped from your policy. 

With that said, never compromise on your liability insurance because you will be in hot soup in the event of an accident. This is because vehicle repair and medical bills can go up to thousands of dollars, and if you are underinsured, then legally, the rest of the amount is your responsibility.

So, ensure that while saving big on your car insurance, you are not underinsured, especially on liability insurance. The good thing is liability policy is super cheap, ensuring that it doesn’t increase your premiums.

  1. Don’t make small claims

Suppose you get into an accident and your vehicle suffers from minor damages. In that case, you may be tempted to call your insurance agent, but don’t, especially if it does not involve another car or other people’s properties.

Take your vehicle to a body shop to get an estimation, and if you can afford it out of pocket, you don’t need to have a claim on your file, as it could increase your premiums when renewing your policy.

However, when the damage is severe or involves other people, no matter how minor, you may settle on the ground for them to sue you months later. And the fact that you did not call your insurer during the accident to assess the scene, even if the other person wins, your insurer may fail to honor the policy since you did not inform them promptly.

Read Also: How to save big on your homeowners insurance costs

  1. Consider paying per-mile-usage

Some people don’t use their cars often, and as such, it would be wasteful to get collision or comprehensive coverage. With usage-based coverage, you’ll be required to pay a base rate and a small fee for each mile you drive. The insurance company will install a telematics tracking device in your car. 

Note: Usage-based insurance is viable for people who drive several miles per year. But if you drive a lot, this is an expensive option.

  1. Remember to update your coverage every year.

After choosing a car insurance company, ensure that you do not get comfortable. Keep up with the trending news, and if the company gives you the best of its services, you can stay loyal and renew with them.

However, if you shop around and find that you can save big on car insurance with another insurer, and the terms and conditions are also favorable, nothing is holding you back from switching and renewing with the said company

Final Thoughts

Car insurance is a must, and as the cost of car insurance continues to rise, you should also take advantage of the various ways you can save big on car insurance.

The 15 tips above will guide you in the right direction, but safe driving is the best saving of all. And don’t just settle for any insurer, do your research and select the one that fits your needs.

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