Cars are most people’s second most costly expense behind their mortgage or rent. So, saving money on car costs can really be very beneficial. Here are some tips to do so.
Compare Premiums from Different Companies
If you realize that your annual premium has increased, check premiums from other insurance providers. You need to do this comparison every year or after every two years or when your policy needs to be renewed. Doing this will help you ensure that you don’t miss on any lower rates when it comes to premiums.
However, don’t choose an insurance provider based on price alone. Keep in mind that cheap can sometimes be expensive. Apart from the rates charged, it is good to consider the reputation of an insurance company before making your decision. All insurance companies are not created equal and some are not able to pay an insurance claim.
As such, it is good to check the financial strength of an insurance company you want to choose. Some sites rate the financial strength of different insurance companies. Check these sites to know about the financial strength of an insurance company. Finally, it is good to know what your contract covers. Therefore, read and understand your insurance contract.
Consider Using Mass Transit
When signing up for insurance, you first have to fill in a questionnaire. One of the questions that you may be asked in the questionnaire is the number of miles you drive the vehicle you want to insure in a year. Those who travel more miles per year pay more in terms of premiums than those who drive less often.
You can save money by using mass transit to reduce the mileage as reducing your mileage significantly will help you get a discount. Find out about the mileage threshold of the insurance company you want to choose as different companies have different mileage thresholds.
A Larger Car Has a Higher Premium
A huge SUV may be comfortable but it may be more expensive to insure it than a smaller car. So, if you would like to cut on your insurance costs, consider buying a small and safe car. This will also give you savings on road tax. Some insurance companies offer discounts to those who insure alternative fuel or hybrid vehicles. These environment-friendly vehicles can make you feel good about protecting the environment while helping you reduce your insurance costs. Check the accurate rates of different cars before buying one.
Raise Your Deductibles
A car insurance deductible is the amount of money you pay to cover your car in case of a covered event such as theft, an accident, weather damage and so on. The amount you pay depends on the policy. It is good to increase your deductibles since the larger the deductible, the less you pay in premiums and the lower the deductible the higher the annual premium.
Find out from your agent how raising your deductibles will affect your annual premium. Raising your car insurance deductible can reduce your insurance costs by several percentage points and help you save a lot of money or the savings can be minimal.
Improve Your Credit Rating
Insurance companies consider a driver’s record when determining car insurance rates as it helps them assess how much of a risk a driver is. A driver that has been involved in many accidents can cost an insurance company a lot of money. People focus on their driving history a lot and forget that insurance companies may take a driver’s credit insurance into account when determining car insurance rates.
Why do insurance companies consider a person’s credit rating? According to Michael Barry, senior vice president and head of media relations of the Insurance Information Institute, most of the insurers use credit-based insurance scores and even though this issue is contentious in some statehousesinsurers claim that a person responsible in their own life is less likely to file claims. Whether this is true or not, it is good to improve your credit rating to cut your insurance costs as a poor credit rating can increase your premiums.
The Place You Live In Can Affect Your Auto Insurance Rates
I am sure that it is unreasonable to move to another state to reduce your auto insurance rates. However, it is important to consider this factor when planning to move to another state.
Review Your Comprehensive Coverage
Since it is impossible to predict whether or not an accident will occur, dropping any coverage from your auto insurance policy can be a slippery slope. However, if your car is so old, it may be a good idea to drop collision or comprehensive coverage. This depends on other factors such as a person’s driving record and the cost of the car.
Installing an Anti-theft Device Can Lower Your Insurance Premium
Car insurance companies offer discounts for anti-theft devices meaning that installing an anti-theft device can help you reduce you lower your insurance costs. Sometimes, installing anti-theft devices can help you save a lot of money on car insurance. Ask your insurer to tell you the devices that can help you lower your premiums.
LoJack’s and car alarms are the 2 devices that you should ask your insurer about. If you are installing an anti-theft device to cut insurance costs, consider whether installing the device will save enough money to be worth the expense and trouble.
Speak to Your Agent
Apart from the tips mentioned in this article, there may be other ways to save money on auto insurance. That is why it is good to find out whether there are any special discounts the insurance company offers for people such as employees of certain companies or military personnel. You never know the discount pricing you may get.