The cost of driving can add up fast. Even if you have a small budget, there are ways to save on car insurance and drive at the same time. Car insurance is one of those expenses that sneak up on you.
It’s so unexpected that it’s easy to overlook until you get a bill and see just how much it is. As with any type of insurance, the more risks you take, the higher your premiums will be.
That’s also why insuring your car as fully as possible is cheaper in the long run than skimping on coverage and then paying for repairs yourself when something happens. Here are 10 ways to keep your costs down and drive safely at the same time:
Check your credit report
Car insurance companies want to know how likely it is that you will file a claim. One of the best ways to show that you are a low-risk driver is to have a good credit history.
Most car insurance companies request a copy of your credit report when you apply for coverage. If you have a poor credit history, you will pay more. You can check your credit report for free once a year at AnnualCreditReport.com or by calling (877) 322-8228. You can also pull your free credit report from each of the three major credit bureaus, Experian, TransUnion, and Equifax, once every 12 months. If you find any incorrect information, file a dispute with the credit bureau and it will be corrected.
Regularly checking your credit report and making sure it is accurate will ensure you are paying the lowest rate possible.
Bundle your insurance
Bundling your car insurance with your homeowner’s or renter’s insurance is often the cheapest way to save. Many insurance companies offer discount policies for multi-policy holders.
If you own a home or rent an apartment, you likely already have some type of insurance on it. If you are paying for car insurance on top of that, you are essentially doubling your insurance costs.
If you bundle your policies, you can often save on car insurance by paying a lower rate for both policies. It’s a great way to cut down on costs and simplify your payment process.
Many people just renew their car insurance without ever giving it a second thought. However, it’s important to know what you are paying for. Shop around and compare multiple companies and policies before settling on one.
Car insurance companies base your premium on a variety of factors, including where you live, your age, sex, marital status, driving record, type of vehicle, and coverage amounts. If you want to save money, you should shop around. You may be surprised by the results.
Change your deductible
Your deductible is the amount of money you pay out of pocket before your insurance company begins paying. If you have a high deductible, you will pay less in monthly premiums.
If you are in an accident and have to file a claim, your premiums will be higher. Change your deductible from $500 or $1,000 to $2,500 or $5,000, and you can probably save a considerable amount on your monthly premium. That can add up over the course of a year.
Many car accidents are caused by drivers who are distracted or who speed. If you drive safely, there is a good chance you will have a clean driving record and lower premiums.
Even if you have had an accident or violation in the past, you can often drive safely for years with a clean record and see a significant drop in your premiums. Driving safely will help you save money on car insurance, as well as make the roads safer for everyone.
Pay in advance
Some insurance companies offer lower rates if you pay your premium in advance for the year. This is often done during the summer when car insurance rates tend to be the highest due to increased accident rates and an increase in teens driving. If you are paying in advance, your premium will be based on the lower rates at the beginning of the year.
Ask for a discount
You’ve probably heard this one before, but it’s important! If you are a good driver, have had few claims on your record, have a new car with good safety features, or have installed a device that monitors your driving, you may be eligible for a discount.
Ask your insurance company if they offer any discounts and what you need to do to qualify. You never know what might be available.
Install safety features
While it may cost a little extra to install safety features such as a proper car seat or a special braking system, it could save you money in the long run. Insurance companies often give lower premiums to drivers who have installed these types of features. You can often get a break on your car insurance if you install these types of features.
Don’t own a car? Don’t pay for car insurance!
If you live in an area with public transportation and don’t own a car, there’s no law saying you must pay for car insurance. Your state’s insurance department should be able to tell you if it’s required and how to apply for an exemption.
This is a common practice in many European countries, where public transportation is extensive, but very few states in America follow this example. If you don’t own a car, don’t pay for car insurance!