The average American pays $1,706 annually on car insurance – a significant household expense. Some individuals pay even more for their car insurance, depending on their driving record, vehicle, and location. Unfortunately, car insurance typically increases unless you take proactive measures to save money. You can make more headway on your financial goals by cutting your car insurance premiums. After reducing your car insurance, make sure to check out our loan payment calculator and debt tracker app to learn the best ways to become debt-free.
Ready to save money on car insurance? Here’s how:
Compare Quotes
Whether you’re purchasing renters or liability insurance, comparing quotes is imperative. You should never go with the first quote. Fortunately, there are free tools you can use to get multiple quotes at once, making it easy to find a good deal. One of the most popular websites to compare quotes is QuoteWizard. All you have to do is enter your zip code and information about your vehicle, employment, and driving history. Before you know it, you’ll have a list of competitive quotes from the nation’s largest car insurance companies. After receiving the quotes, it’s a great idea to get another quote directly from the insurance carrier’s website to see how the prices compare.
Select a Higher Deductible
Generally, the higher the deductible, the lower your premium. When it comes to selecting a deductible on your auto insurance policy, you must consider your risk appetite. For example, are you willing to pay $500 out-of-pocket if you get in a crash and need to repair your car? Or, are you willing to pay $1,000 and save 20 percent each month on your premium? Deductibles typically come in the following increments: $250, $500, $1,000, and $2,000. If you have a solid emergency fund, it might make sense to select a higher deductible.
Sign Up for a Defensive Driving Course
A defensive driving course not only protects you on the road but also allows you to save money on car insurance. These courses are relatively inexpensive, with the average class costing between $20 – $100. However, the courses certainly pay off because you can save up to 20 percent on your car insurance premiums. You also don’t have to stress over a significant time commitment because most DOT-approved courses only last six hours! If your insurance company doesn’t mention a defensive driver discount, we recommend contacting them directly (there’s a good chance they have an unadvertised deal).
Practice Safe Driving Habits
Practicing safe driving habits is a no-brainer. The more accidents on your record, the higher your insurance. Not only that, but you’ll also end up paying a hefty amount in out-of-pocket expenses to repair your car. You may also be subject to fines or, even worse, a revoked license. A defensive driving course can help you drive safer, but you also need to stick to the basics. For instance, you should never text and drive, follow other cars too closely, or speed. By practicing safe driving habits, you can avoid accidents and fines, enabling you to maintain or lower your car insurance premiums.
Choose Your Car Wisely
When we’re car shopping, the cost of insurance isn’t the first thing that comes to mind. Instead, we look at the car’s physical attributes, MPG, and price tag. Sports cars are generally the most expensive to insure, such as the BMW-7 Series, Porsche 911, and Audi R8. On the other hand, more practical vehicles with high safety ratings have the lowest insurance costs – the Subaru Outback and Forester, Hyundai Tucson, Mazda CX-5, and Chevrolet Equinox. The price of a car doesn’t always correlate to the cost of insurance, so it’s an excellent idea to get an insurance quote before buying a new vehicle.
Take Advantage of Discounts
Almost every car insurance company offers discounts – Geico, Nationwide, Progressive, and Liberty Mutual, to name a few. In most cases, you’ll automatically receive the discount based on questions asked by the insurance carrier when you apply for a policy. You can save up to 30 percent on your monthly premium (around a few hundred dollars per month). Most car insurance companies offer discounts for veterans and active-duty military and law enforcement, students with good grades, senior citizens, and individuals who belong to specific professional organizations. You can also receive a decent discount by paying an entire year of premium in advance and signing up for automatic payments.
Use Safety Devices
Safer cars pose a lower risk to insurance companies and are therefore cheaper to insure. Insurance companies look for features like anti-lock brakes, electronic stability control, and daytime running lights. Moreover, many insurance companies let you drive with an application before signing up for a policy. This application uses artificial intelligence and sensors to judge your skills on the road. While using such an application is typically optional, it’s an excellent way to save money if you’re confident in your driving abilities.
Don’t Buy Unnecessary Coverage
You have to buy the minimum required coverage in your state. This coverage includes a combination of bodily injury liability per person, bodily injury liability per accident, and property damage liability. Car insurance coverage sells extra coverage, such as medical payments and rental replacements. In the case of medical payments, many people see it as duplicate coverage if they already have health insurance. Rental replacements coverage pays for a rental car if your vehicle is out of commission. Generally, insurance companies will give you $30 – $50 per day to cover the cost of a rental. Nevertheless, this additional coverage might not be necessary if you don’t drive daily or have another vehicle you can borrow.
Combine Insurance Policies
If you’re married or have teen drivers, you can save money by combing your car insurance policies. Many companies, such as Allstate, off a multi-car discount. Nonetheless, there are some cases in which you shouldn’t combine policies. For example, if one individual has a poor driving record, the rates could increase for both drivers. If both drivers have clean records, you can save a significant amount of money. Once you cut down your insurance premium, be sure to check out our platform’s debt payoff app and expense management tools to position yourself for financial success.