7 Ways to Save Money on Car Insurance
by Admin
Posted on 25-11-2022 10:11 PM
While many people first consider sticker price and the price of gas when it comes to the cost of owning a
car
, car insurance rates matter too. And depending on your circumstances, it might be a larger cost than you were expecting, especially as rates continue to increase. While there is a long list of car insurance providers you can choose from to save money on car insurance, you can also do other things to help make your car insurance more affordable.
One of the most straightforward ways to save money on insurance is by bundling your home and auto insurance , meaning you buy multiple insurance policies from the same company. Allstate , liberty mutual and geico each offer premium discounts for bundling -- depending on which policies and coverages you buy together. You can get discounts on your premium anywhere from 5% to 25%, depending on the provider.
Car insurance costs are different for every driver, depending on the state they live in, their choice of insurance company and the type of coverage they have. But when trying to save money on car insurance, it helps to know what the typical driver pays. On average, the typical person spent $1,190 on car insurance in 2018, based on the latest figures available from the national association of insurance commissioners (naic). According to the naic data, car insurance premiums rose 30% between 2014 and 2018, despite the number of insured vehicles only rising by 7%. Data from aaa put the average cost of car insurance for new vehicles in 2020 slightly higher, at $1,202 annually.
1. Raise your deductible
Increase your deductible. A higher deductible usually calculates into a lower monthly payment, which, over time, can save you a significant amount of money. If your deductible is currently at $250, raise it to $500. If it’s at $500, raise it $1000.
Just make sure that you have enough in your emergency fund to cover your deductible should something happen. Additionally, if it’s a small fender bender, you might want to pay out of pocket to avoid an increase in your insurance premium. Most minor accidents are within the range of your deductible anyway so you’d already be out the cost.
Switching from a $500 deductible to a $1,000 deductible can save as much as 20% on your insurance premium. But remember that a higher deductible means you might have to pay more out-of-pocket if you have a claim. When deciding what deductible is right for you , think about how much you can afford to pay if your car or home are damaged. If the cost of repairs is about the same as your deductible, you might not want to file a claim. Auto and home insurance companies can raise your future premium after you make certain claims. That is, a small claim could end up raising your premium.
If you decide to keep your collision and comprehensive insurance, you can save money by raising the deductible. This is the amount you have to pay out of pocket each time you make an insurance claim. For instance, suppose you need $1,500 worth repairs after an accident. If your deductible is $500, you pay the first $500 and the insurance pays the other $1,000. The higher your deductible is, the less the insurance company charges you for the coverage. According to kelly blue book, if you raise your deductible by several hundred dollars, you can lower your premiums by anywhere from 15% to 40%.
2. Consider lower coverage for older vehicles
Have you been asking yourself “ when does car insurance go down ?” the price of coverage typically decreases as you age, but not necessarily as your vehicle gets older. So, a 25-year-old will likely pay more for coverage than a 45-year-old, but older vehicles don’t always get lower rates. Some reasons for this include: older cars tend to be less maintained your insurance carrier will have to pay the same amount for injuries in an accident, regardless of the age of your car as a vehicle ages, safety features get worn out, like brakes it’s also important to keep in mind that the type of car you drive impacts your rate.
There are also some ways you could lower your car insurance costs but shouldn't. For instance, if you wouldn't have access to another vehicle while yours is being repaired, keep your rental-car coverage (or add it if you don't have it). It's one of the least expensive parts of your insurance policy, so it's not worth the headache of going without. Glass coverage is another thing some people cut when lowering car insurance costs. For older vehicles, that can make sense. But if your vehicle has any advanced driver assistance systems and, specifically, distance sensors requiring an original equipment windshield and special calibration for the safety equipment to work, windshield replacement is not remotely budget friendly.
The more you use your car, the higher your collision risk. City drivers or regular commuters are more likely to have a collision due to a higher volume of vehicles on the road. Saving tip: whenever possible, take public transit or carpool to work. If you make this part of your regular routine, you’ll lower your premium and spend less on gas, parking, vehicle maintenance and other costs associated with driving to work.