There are some great tips out there on ways to save big $$$ on car insurance, so we’ve compiled a list of our favorite and biggest money savers. We want to help you put more money in your pockets so buying all those gifts this holiday season won’t put too much damage on your wallet. Take advantage of all these great tips!
Helpful Tips From Bankrate.com:
Buy only what you need
The car insurance you need when your car is brand new is often considerably different than what you need later on. Initial rates are generally higher, since you’re required to get both comprehensive and collision coverage if you took out a car loan to pay for the vehicle. Comprehensive pays for the repair or replacement of your car from damage that doesn’t result from an accident, and collision covers damages if you’re in a wreck.
Once it’s paid off, most people forget to save money by exploring their car insurance options. Check the value of your car through the Kelley Blue Book® or NADAguides.com. You might have more collision insurance than you need. And in some cases, it might be worth dropping it entirely, especially if your car is an older model.
“It’s often smart to drop collision on older vehicles,” says Mike Barry, spokesman for the Insurance Information Institute. “Comprehensive is so inexpensive, and you’re giving up a coverage you might need — that’s worth hanging on to, though.”
Among the reasons you might need comprehensive coverage: damage from storms, vandalism and theft.
Consider a Tracking Device
If you know you’re a careful driver, you might save money with a new car insurance policy from Progressive Casualty Insurance Co. called MyRate. A small wireless device is attached to your car, letting the company monitor your driving habits, including distance, most frequent travel times and driving habits, such as sudden stops or speeding.
After the first year, you could save as much as 60 percent, according to Progressive. But you will be sacrificing some privacy for the savings. And in some states, such as New Jersey, if the company doesn’t like your driving habits, it could raise your rate by up to 9 percent.
Concerns about the device’s intrusive nature have slowed the rollout of MyRate in several states. In Pennsylvania, Progressive ultimately withdrew its filing to introduce the coverage, says Melissa Fox, deputy press secretary for the Pennsylvania Insurance Department.
Audit Your Driving
Have you changed jobs recently? Maybe you’ve moved to an area where your favorite stores are a lot closer? Keep an eye on that odometer to save money. Just like with carpooling, reduced driving mileage means reduced car insurance rates, says Scott, the retired insurance agent. But people often don’t reach out to their insurance agents when their residence or driving habits change, and they end up sticking with unnecessarily high rates.
Our Favorite Tips From Consumer Reports:
Take Advantage of Discounts
Car insurers offer a whole range of modest but worthwhile discounts that are essentially based on a low-risk lifestyle. Here are some to ask your insurer about if they don’t mention them to you first:
- Students with good grades.
- New drivers who have taken a driver-training course.
- Older drivers who have taken a refresher course.
- Any driver who takes a defensive-driving course.
- Members of affinity groups, such as college alumni and certain occupations and professions.
- Anti-theft and safety equipment.
Pick a Top-Rated Insurer
Saving money isn’t simply a matter of finding the lowest premium. Some insurers have lower premiums, but end up costing you more in the end by lowballing loss estimates, hassling the repair shop to cut corners, and forcing you to pay extra for original-equipment replacement parts. They might even unfairly jack up your premiums after an accident.
We surveyed 64,872 ConsumerReports.org subscribers who filed a claim between 2011 and 2014. Eighty-eight percent of them were highly satisfied with the handling of their claims. Among the highest-rated groups were USAA, Amica, and NJM, with overall satisfaction scores of 90 or higher.
Insurers also offer fairly hefty auto discounts if you also buy your homeowners, renters, or life-insurance policy from them. But be sure you check out total costs both ways: premiums from different insurers compared with single-insurer packages.
Manage Teenage-Driver Risk
Adding a teenager to your policy can hike your costs by 50 to 100 percent. Make sure your child takes a safe-driving course before getting a license. Make it a rule that unsafe driving will mean loss of driving privileges.
Inform your insurer if the child isn’t licensed, or if your child is a college student residing more than 100 miles from your home and doesn’t have a car.
Great Tips From Kelley Blue Book®:
Maintain good credit
In the eyes of auto insurance carriers, drivers with established and stable credit records have fewer accidents. That’s why an increasing number of auto insurance companies consider credit scores when calculating rates. Since your credit score can impact the amount of money you pay in auto insurance, be sure to maintain a good credit rating and check your credit report periodically to ensure the items in your history actually belong to you. There are a variety of online services that allow you to check your credit as well as those that offer advice about how to improve it.
Increase your deductible
Sure, you’ll have to pay more out of pocket if you have an accident, but if you increase your deductible by just several hundred dollars, for example, you could save anywhere from 15 to 40 percent or more in collision and comprehensive coverage costs. It’s always good practice to set aside a portion of your monthly car insurance premium savings to ensure you can actually afford a higher deductible in the event of a claim. Learn more about how much, and what kind, of auto insurance you need.
Consider car insurance costs before you buy
When it comes to buying a new or used car, many people overlook insurance expense as part of the total cost of owning a vehicle. It’s better to consider the cost of insurance before you buy since auto insurance premiums vary widely depending on a vehicle’s specific characteristics, including its price, average repair costs, safety record and whether or not it’s a target among thieves.