Auto insurance is one of those necessary, and sometimes expensive, evils. Paying high premiums every month can be a drain on your finances, but driving without insurance — beyond being illegal — is courting financial disaster. But just because you can’t avoid paying auto insurance premiums doesn’t mean you have to pay top dollar to get the necessary coverage. Here are a few easy ways you can bring your premiums down and put a little more money in your pocket each month.
Get the Right Level of Coverage
One of the first things you should do when looking to save money is review the level of coverage you’re paying for. Do you have simple liability coverage, or are you paying for collision and comprehensive coverage too?
When it comes to insurance, more isn’t necessarily better. Collision and comprehensive coverage makes more sense for newer, more expensive vehicles, which, if you’re here reading this, probably doesn’t mean you. If your car is older — in other words, the kind of car that won’t be worth it to repair of you get in an accident — comprehensive and collision is most likely an expense you won’t need. If your car is likely to be totaled in the event of an accident, don’t throw money away on insuring it.
Pay by the Mile, Then Drive Less
If you live in an area with good mass transit, or a walking-friendly city, you can save a few bucks on your auto insurance by paying by the mile, then choosing to drive your car less. Skip driving to work and take the train or bus instead — or fire up your favorite walking app and hoof it to work. You’ll put fewer miles on the car and your premiums will be less than they would at a flat rate. Plus, you’ll put less wear on your vehicle and help the environment while you’re at it. It’s win-win.
Become a Better Driver
Everyone knows drivers who get in fewer (or no) accidents get better insurance rates. Driving mindfully, with a minimum of distractions and no texting, is just common sense and will go a long way toward preventing accidents. But you can go one step further by taking a defensive driving course, either locally or online. Not only will many insurance providers offer a discount for completing the course, but you’ll also learn a lot from the course itself.
Improve Your Credit
Like it or not, your credit score has a significant impact on living costs, whether it’s rent, loans, or auto insurance. A higher credit score tells insurers you’re financially responsible and less of a risk. Conversely, a low score can make insurers uneasy, which means you end up paying for it in premiums.
With this in mind, you stand to benefit from putting some focus on improving your credit score. Start by doing your best to pay your bills on time (something you should be doing anyway). Talk to your financial institution about consolidating your debts under one loan, to make your life simpler and help get black marks off your credit record. A boost to your credit score will benefit you in all sorts of ways, including your auto insurance.
Shop Around — Every Year!
A lot of people tend to find an auto insurance provider they like and stick with them. There’s nothing wrong with that — but you could be missing out on a bigger, better deal.
Consider taking the time once a year to look for a new auto insurance provider. Comparison shopping doesn’t even have to be a hassle — there are online tools for comparing auto insurance to help make the process easy. If you can find the same coverage at a cheaper rate, why wouldn’t you switch?
Bundle Your Insurance
Another way to put away a few extra bucks is to bundle your insurance policies. If you have several policies under the same insurer — say, for instance, homeowner’s or renter’s insurance — you can often bundle these together to get a multi-policy discount.
Get Those Discounts!
Finally, one of the most time-honored techniques for reducing your premiums: hassle your insurance agent about discounts! There are often many ways to bring your premiums down that people don’t know about, because they don’t ask. For instance:
- A good grades discount for students
- Multiple driver discounts
- Occupational discounts for certain professions (like teachers)
- Discounts for going paperless (help save the environment!)
- Armed forces and veterans discounts
You can also often receive discounts for agreeing to have an anti-theft device or driver monitoring device installed in your car. This, obviously, is up to you — not everyone likes the idea of having their insurance company collect data on them — but if it’s worth it to you to get a lower rate, go for it.
Reducing your auto insurance premiums doesn’t have to be a chore. Many of these tips can be implemented with a minimum of time and effort — and keep a few bucks in your bank account where it belongs.