How to save money on car insurance
Keep your premiums low with these simple tips
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After shelling out a lot of money to buy a new or used car or truck, you might be looking for ways to save money on your car’s insurance. Lucky for you, there are plenty of ways to save. Here are 10 ways to save money on car insurance from the Insurance Information Institute
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1. Have a good driving record
Keep a squeaky clean driving record and you’ll pay less for car insurance than a driver with speeding tickets, driving under the influence charges, or accidents on their record. It pays to be a good driver. For example, a speeding ticket that costs you a couple hundred dollars for the ticket may increase your car insurance by more than 20%, and this surcharge would last three years.
2. Drive fewer miles
If you work from home and drive only occasionally, be sure to inform your insurance provider. As a low mileage driver, you’ll pay less for car insurance than someone who commutes long distances to and from work each weekday. Driving less than 7,500 miles yearly is considered low-mileage driving and will save you money on your car insurance.
3. Live in a small town
There are higher rates of vandalism, theft, and car accidents for city drivers than for drivers that live in rural areas or small towns. Because of this, city drivers pay more for car insurance. Living in a rural area or a small town where there is less crime and fewer car accidents will save you money on car insurance.
If you are a city dweller, you can lower your car insurance by parking your car in a secure location such as a garage or by equipping your vehicle with anti-theft features.
4. Be 25 or older
Teens and drivers under 25 pay more for insurance because they tend to have more accidents. Once you or any drivers on your car insurance are 25 or older, you will pay less for your car insurance premiums. So at least, there’s one advantage to getting older.
If you are under 25, get good grades, and attend school full-time, you may qualify for a discount on your car insurance. In most cases, you must maintain a B average or higher to get this discount.
Other options include getting a group plan for auto insurance through your employer or picking up a multi-policy discount. Multi-policy discounts work this way. Let’s say you already have a renters insurance policy. Sign up for your auto insurance policy from the same insurance company as your renters insurance policy and you may land a multi-policy discount on your insurance premium.
5. Be a woman
The ladies have this money-saving category covered. Women drivers often pay less for car insurance than men, and here’s why.
“Statistically, women tend to get into fewer accidents, have fewer driver-under-the-influence accidents (DUIs), and —most importantly—have less serious accidents than men,” Worters says. “So all other things being equal, women often pay less for auto insurance than their male counterparts.”
If you are a man married to a woman, you may wish to put the car insurance in your wife’s insurance since she will pay a lower rate.
6. Drive a safe car
Choosing a car with a good safety record isn’t just sensible; it’s also a great way to save on car insurance. You could get discounts on the price of your auto insurance by choosing a car with good safety equipment.
“Insurers not only look at how safe a particular vehicle is to drive and how well it protects occupants but also how much potential damage it can inflict on another car,” says Loretta Worters, vice president of media relations for the Insurance Information Institute. “If a specific vehicle model has a higher chance of inflicting damage when in a car accident, an insurer may charge more for liability coverage.”
The National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety conduct car safety tests and ratings. Check out your car’s safety rating. A good rating could mean a discount on your car insurance.
7. Shop around
Different insurance companies will charge you different insurance rates for the same car. So don’t get just one quote. Keep looking around for a better deal.
“We recommend that people get at least three quotes from both different insurance companies and different types of insurance companies – that is, those that sell through their own agents; those that sell through independent agents; and those that sell directly to consumers via the phone, an app or the Internet,” Worters says.
8. Get personal recommendations
Don’t forget to ask friends and family about the auto insurance companies they would recommend. You may find the insurance company you are looking for from a personal recommendation from someone you know and trust.
9. Stick with a trusted insurance provider
If you already have renters or homeowners insurance, you may get a discount if you decide to insure your car with the same company. Insuring multiple vehicles with the same insurance company also will earn you a discount. So consider the insurance company you already do business with when looking to insure a car.
10. Choose a higher deductible
A deductible is the amount you need to pay before an insurance company pays on a claim. So, for instance, choosing a $1,000 deductible instead of a $500 deductible would help to lower your auto insurance premium.
“The only caveat to that is that you be sure you have enough money set aside to pay the higher deductible in the event you have a claim,” Worters says.
Put the higher deductible amount into a small emergency fund so the money will be there if you need it.
Prices were accurate at the time this article was published but may change over time.