How to save money on your auto insurance?
Statista reveals that there were 268 million vehicles on the US roads in 2015. In the same year, there were 1,715,000 injuries, and 32,166 people popped their clogs due to these road accidents. Moreover, 4,548,000 car crashes lead to property damages.
These figures indicate the importance of automobile insurance that can get your vehicle expenses covered in the event of an accident. Not only does insurance handle the physical damage to your vehicle but also includes the injury or damage expenses due to the crash. Here is an interesting infographic in this regard:
Since insurance covers extensive costs in the case of a car crash, it is quite expensive. Lately, there has been 11% increase in the prices of average insurance policies. Of course, not getting insurance isn’t a viable option. So, how do you try and save some money when it comes to auto insurance?
So, here is an in-depth look at some ways to save money on your vehicle insurance:
Scrutinize insurance costs before you buy a car
If you are about to get a car or are going to be replacing your current ride with a new one, you are in luck. Make sure to choose the right vehicle since this decisive moment can help you save money related to auto insurance, and companies like We Buy Any Car can provide you with excellent choices. The calculation of Auto insurance policies is done based on numerous factors.
These include your car’s price, its safety record, the tendency of theft, and its repair cost. Several insurers provide discounts for characteristics like a declined likelihood of personal injuries or theft. In general, cars that are notable for being safe help in saving money. Therefore, when you compare used and new vehicles for purchasing, you should also research their insurance costs.
Most of us select the first available option when it comes to shopping. However, if you intend to save money, you will have to do some digging. A study by NerdWallet found out that most people overpay on auto insurance by $368 annually. The primary reason being insufficient information gathering on vehicular insurances by them.
Insurance companies measure car risks in varying ways. It is owing to these estimates that a policy cost for your car is determined. Therefore, it is crucial to compare quotes from multiple car insurance companies. So, you should check the rates at least once a year.
Check the rates when there is a change in your private life too. These include any changes in location, traffic violations, or marital status. These factors influence the amount that you pay for your car insurance.
Raise your deductible
You can save money on crashes and collisions by raising the amount that you set as the deductible. It is the sum of money that the insurance company does not cover when paying for your vehicle’s repair. For instance, if the repair bill is $2,500 and the deductible amount is set to $500, then the insurer will give a repair payment of $2,000. On the flip side, you will be paying $500 from your pocket.
Research from NerdWallet confirms that increasing $500 of the deductible amount to $1,000 helped save around $200 yearly. Another study revealed that you could save 9% by raising your deductible from $500 to $1,000.
See also...What is a Deductible?
Multiple car insurance companies provide a wide array of discounts. Not all companies showcase their discount offers. You will have to hunt these down by calling your insurers. For example, insurers offer a discount due to safe driving. If you are a student, then there is a chance that the auto insurance company offers some money off because of your good scores.
Some other areas that offer discounts entail an accident-free record, affinity to specific groups such as being a member of the United States Chess Federation, owning multiple cars, getting a new vehicle, and so on. Keep in mind that you will have to ask for such deals. It is because the insurer wouldn’t know if you are entitled to the discount. Subsequently, you will be able to cut down your expenses on auto insurance.
Improve credit score
There is plentiful information that auto insurers put out before finalizing the policy cost for your vehicle. Within this sea of information, don’t forget that your credit also plays a detrimental role. Subsequently, maintaining good credit history can assist you in lowering your car insurance rates. In some instances, your credit score can help you save more money than a clean driving record.
To begin with, concentrate on clearing your current bills and debts. It will improve your odds of saving on car insurance premium. It will also help lower interest rate when you get loans, which allows you to beat two birds with one stone. Another tip for maintaining a good credit score includes keeping credit card balances below your credit limits. Also, open new accounts only when needed, as opening too many credit accounts is bad for your score.
Combine insurance policies
Getting multiple insurance policies under one name not only simplifies finances but also gets you discount. For example, if you combine your home and auto insurance, then you may be qualified for a discount. In some cases, bundling your insurance policies at one place can help save up to 10%.
However, you need to remember that if the insurer offers bundle discount, it doesn’t mean that it is the best option. It might be because your current insurance company may be offering a discount to discourage you from shopping for quotes from other insurers. Get the deal from your company but keep checking other options every year.
Drive less and safe
There are multiple ways that your driving can help save some money on your auto insurance. Firstly, if you drive less, then you can consider a company that provides coverage on the base of car usage. Such insurers offer policies based on how well and how much you drive. You can participate by installing a small device in your vehicle, which sends data to the insurance company.
You will be able to earn a discount for safe driving and low mileage. It is known as pay-per-mile insurance. Typically, a low mileage ranges between 7,500 to 15,000 miles annually, but it varies with different companies.
Over-speeding can lead to the issuance of a speeding ticket that can hurt your insurance costs for numerous years. People who regularly speed are at an enhanced risk of road accidents. These factors swell the risk on your insurer’s shoulder, therefore, increasing coverage costs. Lastly, drive safely. It can help you keep traffic tickets and accidents at bay. In doing so, you will be able to lessen your costs as insurers do observe your driving habits.
Money saving on auto insurance is not a difficult task. In most of the steps outlined above, you need to research. For example, compare quotes, research discounts, keep your eyes open for bundle discounts, and inspect insurance costs before getting a car. You can also lower car insurance costs by driving less, safely, and under speed limits. Finally, Maintain a good credit score and raise your insurance deductible amount.
About Michelle Joe: Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs. You can find her on twitter: @michellejoe524