How to Save on Car Insurance? Tips to Lower Your Rate

How to Save on Car Insurance? Tips to Lower Your Rate

Although lowering your auto insurance premium may seem difficult, KV Auto can demonstrate how simple it may be to do so. So, how to save on car insurance?

You are supposed to drive safely, take a defensive driving class, shop around for better car insurance rates, take advantage of car insurance discounts, use mass transit, bundle your policies, downsize your vehicle, update how many miles you drive, increase your deductibles, improve your credit, and drop car insurance you don’t need…

Please read on to find more detailed information.

How to Save on Car Insurance Costs?

You can reduce the cost of your auto insurance by using a variety of methods. You can use some or all of these strategies once you know how much your auto insurance will cost.

Drive Safely

Accidents, speeding tickets, and other traffic infractions raise the cost of auto insurance. You might be given the choice to attend traffic school if you receive a ticket in order to have it dropped or to have the number of points associated with the infraction decreased on your driving record. According to our analysis, if you can keep the infraction off your driving record, the time you spent in class could lower your annual car insurance by an average of $546. See also: How Long Does An Accident Stay on Your Insurance Record?

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Take a Defensive Driving Class

In some states, insurance companies offer discounts to drivers that take certain defensive driving courses. While these discounts are sometimes available only to teenage or senior drivers, taking such a class is beneficial for everyone, even if your insurance company doesn’t offer any savings for it. Driving carefully and avoiding collisions and tickets can save you money in the long run. How Much is Car Insurance for a New Driver?

Shop Around for Better Car Insurance Rates

Although auto insurers use the same variables—such as location, age, and driving record—to determine your car insurance costs, they weigh these variables differently. That’s why it’s important to compare rates. Check for What Age Does Car Insurance Go Down?

To analyze the importance of shopping around, NerdWallet compared rates for 35-year-old drivers buying full coverage insurance from the largest insurers in the nation. Full coverage car insurance is a great choice especially choosing car insurances. We found that costs vary by hundreds of dollars a year. Why is Car Insurance So Expensive? Although one of the biggest insurers in the nation, Liberty Mutual was left out of our analysis because it does not provide rate information. Check for How to Get Car Insurance Before Buying a Car?

In fact, nationwide, good drivers with good credit can save an average of more than $207 a month by switching from the most to the least expensive insurer. Additionally, drivers with a recent at-fault accident or bad credit may save even more money—on average, nearly $214 and $153 per month, respectively. How Much is Car Insurance for a New Driver?

However, these rates apply nationwide. Depending on where you are, you will pay a different rate. For instance, a business offering the most affordable rates in one state might not be in another. And the most affordable provider for a safe driver with good credit might not be the most affordable for someone who, for example, has a DUI or a recent accident.

To lower your car insurance rates, get quotes from several companies once a year.

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Take Advantage of Car Insurance Discounts

Each insurance provider offers unique strategies for reducing the cost of your auto insurance. Visit the discounts page of your insurer and request that your agent go over any potential savings to ensure that you are receiving all the discounts to which you are entitled.

Our car insurance discounts page gives more details on what insurers offer different discounts. But keep in mind to compare prices based on your own circumstances. Just because an insurer offers multiple discounts doesn’t mean it offers the lowest overall price. Read more: Average Cost of Car Insurance

Use Mass Transit

The business will typically begin by asking you questions when you apply for insurance. It may inquire about your annual mileage on the insured vehicle, among other things.

In general, you will pay a higher insurance premium than someone who only drives one mile per day if you use your car to travel three hours to work every day. If at all possible, use public transportation to rack up fewer miles. However, keep in mind that you will typically need to significantly reduce your mileage in order to qualify for a discount. To ensure that your efforts are not in vain, ask your insurance provider about the various mileage thresholds used by the company.

Additionally, ask your provider how many miles you currently drive; most will be able to provide you with a more accurate insurance quote.

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Bundle Your Policies

Even though it is constantly emphasized in advertisements, bundling frequently gets overlooked. Consider combining or adding policies if you have several policies or are underinsured to save money. Renters, homeowners, and umbrella insurance coverage (among others) are eligible for bundling discounts. In fact, by simply adding a renter’s insurance policy, you can frequently save more money than it costs.

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Downsize Your Vehicle

It may sound exciting to purchase a massive SUV, but insurance for a 5,000-pound, top-of-the-line car can be more expensive than insurance for a small (but secure), less expensive commuter car. You may be eligible for a discount from some insurers if you purchase a hybrid or alternative fuel vehicle. Farmers, for example, offers a 5% discount.7

While saving money on insurance, you can feel good about helping the environment. Before making a purchase, research the precise insurance costs for each vehicle you’re thinking about.

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Update How Many Miles You Drive

Have you switched to a job that doesn’t require as much driving lately, or are you working from home now? According to the Federal Highway Administration, the average American drives 13,000 miles a year, and companies that provide auto insurance give discounts to customers who drive less than usual. Give your insurance agent a call, let them know your current driving habits, and reap the rewards.

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Increase Your Deductibles

When you file a claim, the insurance company will deduct the deductible from your payout. Deductibles are a part of car insurance coverage. When you purchase auto insurance, your insurance provider will give you a variety of options for your deductible amounts, so it might be worthwhile to consider raising your deductibles to reduce your premium. Your premium will naturally decrease due to the higher out-of-pocket expenses. Before choosing a higher amount, make sure you can afford the deductible in the event of an accident. See also: How to File a Third-party Car Insurance Claim?

Improve Your Credit

When determining how much to charge for car insurance, your credit may play a significant role. In some circumstances, it may be more important than your driving record. However, this is not true in California, Hawaii, Massachusetts, or Michigan, where insurers are not permitted to take credit into account when determining rates.

To build your credit, focus on these three steps:

  • Pay all of your debts, including loans and credit cards, on time.
  • Maintain credit card balances that are far below the credit limits.
  • Only open new credit accounts when absolutely necessary. Applying for too many credit cards can lower your rating.

Drop Car Insurance You Don’t Need

It might be time to stop paying for collision and comprehensive insurance, which cover damage to your car, if your vehicle is a junker. Collision insurance pays to repair damage to your car if it crashes into another vehicle or object, or flips over. Comprehensive insurance pays if your car is stolen or damaged by storms, vandalism or by hitting an animal such as a deer.

It’s time to discontinue them if the value of your vehicle is less than your deductible plus the cost of your annual insurance. Collision and comprehensive never pay out more than the car is worth.

Assess whether it is worthwhile to pay for coverage that may only reimburse you for a minimal amount, if anything.

But keep in mind to save the money you would have spent if you forego collision and comprehensive. Put it aside for auto repairs or a down payment on a new vehicle when your old one breaks down.

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Consider Location When Estimating Car Insurance Rates

You probably won’t relocate just because the cost of auto insurance is lower in another state. But if you’re preparing to relocate, you should account for the potential change in your auto insurance rate in your spending plan.

Review Your Coverage

Dropping some coverage options can be a slippery slope. Nobody can actually predict whether or when an accident will happen. However, if you are driving an extremely old automobile that’s on its last legs, it may make sense (depending on the cost, your driving record, and other factors) to drop collision or comprehensive coverage.

This is because the insurance company would probably declare the car total if the car were to be involved in an accident. It might not be worthwhile to purchase a car with a $1,000 value and $500 annual collision insurance. How Much Will Insurance Pay for My Totaled Car?

Get Discounts for Installing Anti-Theft Devices

Individuals have the potential to lower their annual premiums if they install anti-theft devices. GEICO, for example, offers a “potential savings” of 25% if you have an anti-theft system in your car.

Which particular devices can lower premiums when installed should be clear to you from your insurance provider. You might want to ask about LoJacks and car alarms.

If your primary motivation for installing an anti-theft device is to lower your insurance premium, consider whether the cost of adding the device will result in a significant enough savings to be worth the trouble and expense.

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Speak to Your Agent

It’s important to remember that in addition to the cost savings mentioned in this article, there might be other opportunities for cost savings. In fact, this is the reason it is often a good idea to inquire about any special discounts the business may provide, such as for members of the armed forces or employees of a particular business. You can never be certain of the discounts that might be offered for your situation. Explore the answer: Average Cost of Car Insurance for 18-Year-Olds

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Switch to Pay-as-You-Go Insurance

If you’re a safe, low-mileage driver, a usage-based insurance program (also known as black box insurance) may be available to you, such as Drivewise, Snapshot, or Drive Safe & Save are a few insurance companies’ programs. By signing up for these programs, you let your insurer track your driving through a telemetric device installed in your car in exchange for possible discounts based on how much you drive, when you drive, and how well you drive. You might be able to save money with this kind of program if you drive less than 10,000 miles annually.

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Research Additional Discounts

The discounts offered by insurers are varied. Check for discounts such as these:

  • Offers to let you pay the entire annual or six-month premium at once
  • Agreements to receive e-bills and documentation
  • Memberships in particular organizations or groups that offer discounts

A lengthy list of potential discounts should not sway you. Compare the regular and discount rates offered by various insurers.

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

How Much Does Car Insurance Cost?

Depending on the state they reside in, the insurance provider they choose, and the level of coverage they have, every driver’s car insurance costs vary. How Much is Car Insurance for a New Driver? However, it is helpful to be aware of what the average driver pays when looking to reduce the cost of auto insurance.

According to the National Association of Insurance Commissioners’ (NAIC) most recent data, the typical person spent $1,190 on auto insurance on average in 2018. Despite only a 7% increase in the number of insured vehicles between 2014 and 2018, the NAIC data shows that car insurance premiums increased by 30% between those years.

According to AAA data, the average annual cost of auto insurance for brand-new vehicles will be $1,202 in 2020. Since the figures are fairly close to one another, it is possible that you will need to allocate about $100 per month for auto insurance when planning your budget for a new car.

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How to Find a Cheap Car Insurance Company?

Here’s what you need to know to do this accurately and to help determine the best car insurance company:

  • To determine which option will cost you the least for the same amount of coverage, compare baseline quotes from each company. Make sure your policy’s coverage and limits are the same. If you don’t, you might unintentionally choose a premium with a lower value and less protection. How Much is Car Insurance for a 16-year-old
  • Add optional coverage.If adding optional coverage is important to you, you can see which auto insurance providers provide it. This might include accident forgiveness, gap coverage, and other things.

Take into account additional elements such as ratings for financial strength, the availability of mobile apps, and more. Positive customer service, simple policy management tools, and a prompt claims payout can all contribute to a good experience. You could choose the option that best suits your preferences and needs based on these elements, along with price.

Questioning how long does GAP insurance last?  Maybe you’re curious about your GAP Coverage’s cancellation or refund options. We’ll address all of your GAP Insurance questions in the paragraphs that follow. Read Now!

How does car insurance work? The purpose of having auto insurance is to safeguard your finances in the event of an accident. Auto insurance can assist in paying for repairs to your car and medical care for your injuries if a tree falls on your car or you are the victim of a hit-and-run. It also provides liability coverage, in case you are at fault for an accident that causes injury or property damage to others.

How to Save on Car Insurance? Tips to Lower Your Rate
How to Save on Car Insurance? Tips to Lower Your Rate

Frequently Asked Questions

How Do I Get Cheap Car Insurance?

You can begin by requesting quotes from various insurance providers when looking for affordable auto insurance or figuring out how to reduce auto insurance premiums. To get a precise estimate of which company will be the least expensive for you, you should ideally want the policy coverage and limits to be the same. Additionally, make an effort to include any potential discounts offered by each business in your comparison so you can determine which is truly the most affordable option for you.

What is the Best Cheap Car Insurance?

Every driver has distinctive personal characteristics, such as age, location, and driving history. The best cheap car insurance provider will vary for each person because these aspects, along with others like the make and model of the car you drive, affect the underwriting procedure and the final rate you pay. To narrow down your list, consider which providers offer low rates on average in your area and how many discounts you would be eligible for with a particular policy.

Is Cheap Car Insurance Available for High-risk Drivers?

High-risk drivers may have a difficult time finding cheap car insurance. The reason for this is that high-risk drivers may be more likely to cause costly collisions, and insurance companies typically compensate for the risk with higher premiums. The same approach, though, is used regardless of your driving history—good or bad. You might have a better idea of the cost of your auto insurance premium if you shop around, are open to dealing with different carriers, and request quotes.

How Can I Lower My Car Insurance Premiums?

Asking your current insurer about any discounts you might be eligible for could be one of the simplest ways to reduce your car insurance premium. While shopping around and comparing carriers may also be helpful, it can also benefit you to continue to be a safe driver. When it comes time to switch insurance carriers, driving safely and avoiding collisions and moving violations may help you keep substantial discounts, such as the good driver discount.

Summary: How to Save on Car Insurance?

You are supposed to drive safely, take a defensive driving class, shop around for better car insurance rates, take advantage of car insurance discounts, use mass transit, bundle your policies, downsize your vehicle, update how many miles you drive, increase your deductibles, improve your credit, and drop car insurance you don’t need…

When you first purchased your auto insurance, you most likely assessed your needs, looked around for the best deal, and confirmed your eligibility for any available discounts. But have you done any of that since?

It’s a worthwhile exercise to reevaluate your insurance policy as your car ages and your driving record and habits change. Deals and discounts change, information becomes dated, and your insurance requirements change. 

If you have any questions, please leave a comment. KV Auto tries to give you the best car industry information. Thank you for reading.

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