How to Save Money on Your Car Insurance
Everybody wants to save money, and auto insurance is a great place to start.
The dynamic nature of the policies means that you can take control of what you need and how much you’re paying for it, but the last thing any driver wants is to give up necessary coverage that could cost them more than it saves.
You can save on your insurance without compromising on quality of coverage, though, and you can do it in a way that you’ll be sure fits your needs.
Well, you get to decide where your insurance is working best for you, and make your choices from there.
The REAL Way to Save
So what’s the real way to save on car insurance? In the broadest terms, by getting the insurance that you need. When you purchase insurance, you’re buying on a what-if contingency, and while that protection is valuable, you should be buying for the kind of coverage that is most applicable to your driving.
There are a couple of things to focus on in order to make sure you’re getting the right level of insurance for you:
- The age of your car
- How much you drive
- Your deductible
- Your driving record
- What extra expenses are of value to you
- Where your other insurance comes from
The Age of the Car
Let’s start with your car’s age. If your car is paid off, it won’t require full coverage, and with many older or de-valued cars, adjusting your coverage after your car has been paid for is one of the more efficient means of saving on car insurance.
There’s often an argument against maintaining collision and/or comprehensive coverage on older vehicles, since the amount you’re paying in premiums over multiple years actually begins to exceed the value of the car, itself.
Dropping one or both of these, or simply raising your deductible on either can help kick-start insurance savings on older vehicles.
Your Driving History
Likewise, how much you drive impacts what coverage is really necessary. Many insurance companies offer low mileage discounts, which is a savings in and of itself, but these can be combined with raising specific deductibles, such as collision coverage, since low-mileage drivers are less likely to get into those particular types of incidents.
If you know you’re going to be driving your fair share each month or year, don’t forgo proper coverage, but for those who drive relatively less, readjusting to fit your mileage could yield further savings.
Deductibles and Safe Driving
Specific deductibles are applicable in specific circumstances, but evaluating your overall deductible is something any driver can do to improve their savings, regardless of whether they need to maintain full coverage. Raising deductibles for any coverage means that you’re increasing the amount you pay out of pocket when you file your claim.
For things like fender-benders, it could make more sense for many drivers to pay for simple or minimal repairs, rather than maintaining that higher premium. It might not be wise to do this for a more accident-prone driver, such as a teenager, but for those with an established safe-driving history, it’s perhaps the easiest and most direct way to save.
Much like low mileage driving, safe driving often comes with its own benefits and discounts. If you can prove a safe driving record to your company, you may be eligible. It’s also perhaps the best way to avoid future increased prices.
Moving violations, at-fault accidents, and claims will all increase what you pay annually each time one is reported. Safe driving is really the only way to avoid these steep hikes in your premium.
As previously mentioned, when you buy insurance, you’re buying on a what-if contingency. Remember that at the end of the day, your insurance is in the business of selling insurance, not just providing it. That means that you could end up with portions of your coverage that were simply sold to you, not that you really need.
What those are will vary from driver to driver, but things like towing or car rental are worth evaluating when it comes to your insurance costs.
If you know you maintain your car properly, drive relatively little, or stay mostly in-town, towing coverage might not be necessary for you, especially if your collision coverage already covers towing in the event of an accident (and it generally does).
Having towing for those ran-out-of-gas moments isn’t going to be necessary for all drivers. Rental cars are another expense that might not be worth carrying on your insurance.
Your insurance covers you while you drive for a rental car. Paying for the extra coverage offers little benefits to drivers unless you rent frequently.
Shopping and Bundling Insurance
The final thing to consider is where your insurance will come from. Shop around and compare and calculate values, but don’t just do it with the individual value of the car insurance policy. Look at where your other insurance comes from, and see if they offer discounts for bundling.
Combining home and auto could yield higher savings than comparing prices for auto, alone.
When you break it down, saving on your car insurance is actually pretty straightforward. As long as you’re reasonably able to assess your needs based on your car and your driving habits without getting lost in a myriad of technically-possible but highly unlikely circumstances, you’ll be able to identify what you need, and where the excess is.
It won’t translate into mountains of money, but making just small adjustments in your coverage could save you hundreds during the life of your policy.