How You Can Lower Your Auto Insurance Premiums

Written by Clive Bristol

Auto insurance is required for drivers in all states. However, auto insurance can often be expensive. This is especially true for young males, teenagers, individuals with poor payment histories or coverage lapses, and individuals with multiple tickets. Even if you have a good driving record, if you do not take the right approach to your auto insurance, you could end up overpaying on your premiums. Acquiring knowledge about how you can reduce your premiums, no matter what your driving situation, can help you to get the most affordable rates.

Before buying your car

Some cars are more expensive when it comes to insurance premiums. Newer vehicles are more expensive than older vehicles. Some older vehicles are not eligible for full coverage insurance. Four door sedans are less expensive than two door coupes. Minivans are less expensive than trucks. Sports cars are among the most expensive vehicles to insure. Before you purchase a new vehicle, take the time to shop around for auto insurance. Find out how your purchasing decision will impact your financial status regarding auto insurance before you sign on the yellow line. This may prevent you from making an expensive decision.

Increase your deductible

A deductible is the amount of money that you have to pay out of pocket before your insurance company will make repairs to your vehicle in the event of an accident. Higher deductible amounts will cost you less money when it comes to your premium. By increasing your deductible, you can save substantially on your insurance premiums. However, before making this decision, it is important to weigh the overall costs. Even though your premium may be lower month to month, if you are in an accident or damage is done to your vehicle, you will have to shell out more money out of pocket. When considering whether or not to increase your deductible amount, take into account the accident rate of where you live. Individuals who live in rural areas may be able to make this decision with a little more confidence than an individual that lives in a metropolitan area.

Care for your credit

Although there are still a few companies out there that don’t base your premium amount on your credit, more and more insurance companies are using your credit history to determine how much you will pay for auto insurance. The reasoning behind this relates to the poor financial management of individuals who have bad credit. Take care of your credit and you can save substantially on your insurance premium. Pay your bills on time and pay off old debt to increase and maintain a healthy credit score.

Marry your insurance

Instead of carrying an insurance policy for your home and car separate, combine the two. You can also do this with motor home insurance, motorcycle insurance, and boat insurance. By placing all of your insurance under one policy, you will be offered a discount by many companies. This is called a multi-policy discount.

Consider the age of your car

If you have an older car, you may be paying for more coverage than your car is worth. Older cars do not have much face value. By carrying a full comprehensive and collision rate, you substantially increase your premium. However, if your car is totaled out in an accident, you won’t receive much compensation for the loss of your car. Instead of paying for a full coverage insurance premium, place that money in a savings account. This will allow you to have money to purchase a new car in the event of an accident and you won’t be throwing all of that money away on a premium that isn’t going to give you a return fo the money you have spent.

Group insurance

Some employers offer a group insurance policy to their employees. Although you are responsible for paying the premium, by insuring with you company policy, you may be eligible to receive substantial discounts on your monthly premium.

Discounts for low mileage

If you don’t drive very often or only drive a short distance each day, look for insurance companies that offer low mileage discounts. These companies often reduce the premium you pay monthly because your low mileage puts you at a lower risk of getting in an accident.

Ask about other discounts

Many insurance companies have a wide variety of discounts that they extend to their customers. Ask about other discounts they may have available. Some companies offer veteran and military discounts. Others offer discounts for drivers who have not had any accidents within a specified number of years. For young drivers, you may be able to find an insurance company that will allow you to lower your premium by taking a defensive driving course. Educating yourself about the many discounts that may be available to you, particularly those that you can easily do or change, can help you to find the best rate.

The most important thing you can do to ensure you get the best auto insurance rate is to shop around. Check different companies and find the one that will offer you the most discounts and the best rate. Taking time to do this can save you substantially in the coverage you receive and the premium that you pay.