In addition to being required by law, auto insurance is helpful for covering the costs you’re responsible for if you are in an accident. For many people, it can be tough to afford the premiums for coverage, but the ultimate cost of being in an accident withough auto insurance is much more expensive. Fortunately, there are proven ways to reduce your auto insurance premiums. Start searching now to find out how you can save.
Don’t Pay Monthly Premiums
One of the best ways to reduce your car insurance costs is to make a lump sum payment. You can save more off your premiums by paying for six months to a year at a time as opposed to paying monthly premiums. In fact, you could save anywhere between $50 to $1000, depending upon your policy.1
At one time, people were required to pay for their insurance in one lump sum ahead of time. That changed when auto insurance became necessary by law. As such, insurance companies started allowing monthly payments for those that couldn’t pay all at once.
Unfortunately, this process requires more work on the part of insurance companies. When people pay monthly premiums, insurance companies have to manually process each payment in order to keep policies active. Manually processing payments creates additional overhead insurance companies need to cover.
Another reason to pay your premiums in a lump sum payment is that doing so obliterates all risk of forgetting to make a payment one month.
Bundle Your Plan with A Safer Driver
Insurance companies like safe drivers. Just like creditors look at your credit score to assess how risky you are to loan to; insurance companies want to know how risky you are as a driver. The riskier you are the more likely an insurance company will need to cover the costs of your damages. If you don’t have a substantial amount of violations and accidents, you might be considered as a safe driver. If you aren’t a safe driver, it would be well worth your time to bundle your plan with a safe driver to get a safe driver discount and other benefits.2
Apart from bundling your plan with a safe driver, you could possibly save money by bundling your plan with someone else’s. This doesn’t always decrease the cost of your premium, but it’s worth checking into.
Periodically Reevaluate Your Coverage
The only constant in life is change. With any change in your life, consider how it might change your coverage options. If you are a member of any club or organization, have good grades, bought a new vehicle, or have anything else you think might help you on your car insurance costs, be sure to mention it to potential insurers.
If you drive less, you might be able to pay less for car insurance. Some companies will charge you less for insurance if you don’t commute much. If you don’t drive often, this can substantially lower your premiums. In addition to driving less, your insurance premiums are more likely to decrease as you get older.
As your vehicle gets older, you are more likely to have paid it off, which can also change your coverage options. Plus, your vehicle decreases in value as time goes on. This means that insurance companies will have to pay less to replace your vehicle the older it gets, in the event your vehicle is damaged.3
Bundling can save you a lot of money on your premiums. For instance, a company may give you a substantial discount on your car insurance if you bundle your plan with your home insurance plan or other insurance plans.4
It’s important to note that your credit score plays a huge impact on your car insurance premiums. By raising your score, you could save hundreds on your yearly auto insurance bill.
Finding the Right Insurance Company for You
Once you have reviewed all your options and know what you want, it’s best to begin the process of comparison shopping. Friends and family can provide insight into which companies to look in to. Keep in mind that what a company charges your friends and family may not be what they will charge you, even if you share commonalities. Insurance companies have some wiggle room on what they can charge, which is why it is always best to shop around.
One of the easiest ways to do comparison shopping is by using the Internet. If multiple companies are aware that you’re shopping around and you have things going in your favor, you might be able to get companies to compete for your business in a bidding war. At the end of the day, performing your own research will secure the best possible deal.