5 Ways to Save on Auto Insurance
In our last blog, we talked about ways to save on your transportation costs, and mentioned that a great way to reduce your monthly expenses is to save money on insurance. But how exactly are you supposed to do that? For many of us, car insurance costs are kind of opaque: we hop online, fill out some forms about ourselves and our cars, and out pops a number we can choose to accept or reject.
But the truth is, we have far more control over the cost of our car insurance than we might initially realize. If you dig into the options available to you, you can often find that you can save a big chunk of change you might not have ever even considered. Here are just a few ways to save money on car insurance in 2023:
- Cross-shop insurance providers
Most drivers don’t really explore their insurance options; they just know they’ve used Progressive or Geico or State Farm or whoever and stick with it whenever it’s time to renew their policy. But often, this isn’t out of any real sense of loyalty, and is more just inertia and convenience–it’s easy to auto-renew than it is to seek out alternatives.
But it never hurts to cross-shop rates from other insurance providers, as you never know what’s out there! If your insurance is about to renew, plug your info into a number of providers and see who can give you the best rate. You can end up with a cheaper policy, a negotiating tool to bring back to your current insurance provider, or–if nothing else–the comfort and knowledge that you are in fact getting the best rate possible already.
- Bundle with your other insurance policies
Insurance providers are businesses, and will really do whatever they need to do to make money. For many, that means a willingness to provide a discount for bringing all (or some) of your insurance policies under their umbrella, so If you have separate providers for auto insurance, home/renter’s insurance, etc, look into bundling your policies.
Almost all major insurance providers will have bundle options that can save you money on individual insurance plans when purchased together, often with little downside. Unless there’s a very specific (and good) reason why you’re using different providers for each policy, seriously consider the benefits in cost and convenience of bundling them together instead.
- Look into safe driver discounts
As mentioned before, insurance companies are businesses and will do whatever it takes to make a buck. For the insurance industry specifically, this means reducing the claims they need to pay out by whatever means necessary–which can be great for you if you’re a safe and responsible driver.
Most auto insurance providers nowadays offer discounts to safe drivers that can reduce your monthly insurance costs significantly. Whether these are time-based (such as reducing your rates for every year without an accident) or behavior-based (many providers will offer a discount for installing a tracker that measures your speed, abrupt driving maneuvers, etc), if you’re a reliably safe driver then you should have no shortage of options to lower your rates.
- Only carry the insurance you need
Did you know that many people are carrying Collision and Comprehensive auto insurance when they don’t need it? No, this is not a recommendation that anybody start driving under-insured, and you always want to evaluate your needs and speak with your provider to determine what the best level of coverage is. Having said that, it’s worth looking into whether or not you’re paying for more than you need.
The easiest way to do this is to find the realistic value of your vehicle, as this will determine the maximum amount your insurance provider will pay out in the event of a total loss. Then, add up how much you pay for Collision and Comprehensive insurance and add that to your deductible. If you’re paying more annually than your car is worth, then you’re simply throwing away money!
- Build your credit score
The rest of these tips may be easy ways to lower your monthly car insurance costs, but if you’re a long-term planner, then you might want to think about ways to maintain these lower costs in the future. In most states (excluding California, Hawaii, Massachusetts, and Michigan), insurance providers are allowed to use your credit score to determine your rates, and it can sometimes even make a bigger difference than your driving history!
This means that for people with low credit scores, one of the best ways to lower your insurance costs going forward is to work on building that score back up. By paying your bills on time, keeping your credit card usage far below your spending limits, and generally managing your credit accounts responsibly, you can put yourself in a position where future insurance quotes are well below your current rate.
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