So, you’ve bought a car, and everything seems great.
It gets you from A to B, has excellent gas mileage, and is the perfect color for your personality!
And then suddenly you get hit with crazy high car insurance rates. All the sudden you find yourself wondering how on earth you’ll be able to afford everything.
After all, car insurance rates can be astronomically high if you don’t pick the right one.
Today, I’m sharing with you how to reduce your car insurance rates.
I hope that these tips and tricks will help you lower your payments so that you’re able to put that money away for a better or future use.
Request A Higher Deductible
A deductible is a sum of money you are required to pay for before your benefits kick in. The most common deductibles are $500 and $1,000. That means you’d have to pay $500 before your insurance will pay for any damages to yours (or someone else’ss) car.
If you request a higher deductible, you can lower your insurance rate costs significantly (like potentially $50 a month!).
If you go this route, you do want to consider the fact that you’ll need enough money set aside in case you end up having a claim.
We keep $1,000 in an emergency fund and then have $1,000 deductibles on our vehicles. But we should really have a larger emergency fund, just to be safe.
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Buy Your Car Insurance From Your Homeowner Insurance Provider
This tip is pretty straightforward. Companies will reward customers who use their services for more than just one thing.
If you have homeowners insurance, you should call your provider and ask about what discounts you can receive when you bundle car and home policies together.
However, you still want to be smart and shop around to make sure you’re getting the best rate. It is possible to find a better deal somewhere else, although it is unlikely.
Also, if you have two cars registered with the same insurance provider, make sure to double check that you’re receiving even more of a reduction in price.
Keep A Great Credit Score
Did you know that most insurance companies use your credit information to price their auto policies?
According to research, those who keep tabs on their credit score often have fewer claims.
If you establish a good credit history, this can cut your insurance costs significantly.
While it may seem daunting to keep your credit stellar, all you have to do is pay your bills on time, don’t obtain more credit than you need, and keep your balances as low as possible.
Make sure to check your credit score monthly, and get any mistakes fixed on your record right away.
Credit Karma is the perfect place to keep tabs on your credit history and score. The website is free and doesn’t hurt your credit at all when you check things out.
RELATED POST: How To Raise Your Credit Score
Reduce Your Coverage On Older Cars
If you have an older car, try dropping the collision or comprehensive coverage.
Research shows that if your car is worth less than ten times than the premium, purchasing those coverages may not be the right choice financially.
I hadn’t reviewed our car insurance premiums in a couple years and when I went through the policy with someone from USAA they noticed that we were paying more each year in insurance than one of our cars was worth! Our car is only worth $900, yet we were paying $100 a month to insure it!
Now, let me clarify that you will still need to carry the insurance to pay for the damage on someone else’s car, should any accident be your fault (or someone else on your policy).
Ask About Low Mileage Discounts
This would be the perfect option for anyone who carpools to work, or homeschools so you don’t drive AS much each day.
If you’re someone who drives lower than the average number of miles per year (12,000), then you’ll want to ask about low mileage discounts.
Don’t be shy! Take advantage of this opportunity!
Pay For Yearly Car Insurance
This one might be a little harder to do, but if you are able, paying your car insurance up front in one lump sum could save you up to 15%.
Some insurances will also allow you to pay 6 months at a discount also, so that would help the one-time payment be less.
Not only will you spend less than you would if you paid each month, but you’ll also have the peace of mind knowing that your car insurance is paid in full for a whole year.
My insurance company, USAA, does not charge any difference between paying monthly and paying 3 or 6-months at a time. So call your provider and find out how your company works.
Group Insurance Discounts
One fantastic way to save on car insurance rates is to speak with your employer about group insurance discounts.
Some companies offer lower costs to those who get insured through a group policy at work.
You can even get a discount through alumni groups from your college!
Ask the groups or clubs that you’re a part of to see if there is anything like this as a possible option for you too.
Car insurance rates don’t have to cost you an arm or a leg
With some simple knowledge of how these providers work, you can end up saving yourself a lot more money than you previously thought possible!
I hope these tips help you get a lower insurance rate on your car and inspire you to help others save as well!
YOUR TURN: Do you have your home and car insurance with the same company? Let me know in the comments below!
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