11 Money Saving Hacks To Save on Car Insurance
There are various ways you can save on your auto insurance premiums. You could take advantage of the various discounts your insurance company offers to qualifying customers. You could also raise your deductible which means your premium will be lower. Insurance companies will also offer lower rates for used vehicles and to drivers with a good credit score. That’s not all! If you’re looking to get cheaper rates, keep reading for 11 car insurance hacks that can save you money.
What Is a Car Insurance Hack?
A car insurance hack refers to a tip or trick that will help you save on auto insurance.
11 Car Insurance Savings Hacks
Buy a used car
It is usually cheaper to get a used car insured than it is to get a new car insured. The reason is that older cars are cheaper to fix than their newer counterparts. The modern vehicle has somewhere over 100 sensor modules. Add to that the large number of microchips that each sensor has, and you’re looking at anywhere between 1,400 and 3,000 chips in a modern vehicle. This obviously makes repairs more complicated and expensive. Buying a used car can help you save on insurance.
Shop and compare rates
Insurance rates are going to vary from one insurance company to another according to location, the vehicle being covered and several other factors. It pays to shop around and compare rates from several companies to see which will offer you the lowest premiums. Insurance companies may be willing to adjust their rates when they learn you’re considering other providers and you’re able to give them a quote from a competing provider that you think is affordable. They may even match that quote and get you the coverage you want at a lower rate.
Compare prices every six months because rates can and will change every day. If you have a life event that changes your profile, you may be eligible for a lower rate. You can either switch to a new provider or you can again use the cheaper rate to bargain for a lower price with your current provider. Beware: If you try to cancel your policy before its ending date, you may end up paying a cancellation fee.
Adjust your auto insurance deductible
Adjusting your deductible can help save you money on auto insurance premiums. A deductible is an amount of money you pay out-of-pocket before your insurance kicks in. The standard rule of thumb is a higher deductible means a lower premium, the monthly or annual cost you pay for an insurance company to provide you coverage. Make sure that you’re able to pay the higher deductible if you file a claim after an accident.
Bundling insurance refers to purchasing multiple insurance policies from the same provider. Bundling your home and auto policies can result in savings as high as 25%.
Take advantage of your policy discounts
Make sure to ask your insurance agent about any other discounts you may qualify for. The savings you receive from these discounts will vary by company and policy. Discounts may include:
- Anti-theft discount - You may receive a discount for having anti-theft devices installed in your vehicle. These could be devices that were installed by the manufacturer before purchase or additions you added afterward.
- Automatic payment discount - You could get a discount by setting up autopay on your account. Autopay refers to the cost of your premium being automatically pulled from an account of your choosing during your billing cycle.
- Good driver discount - This discount is afforded to drivers that have clean driving records. The cleaner the record, the less of a risk you are to your insurance company. The less of a risk, the lower your rates.
- Good student discount - You could get a good student discount if you’re between 16 and 24 years old and are a full-time high school student or college student with a B average or higher.
- Low-mileage discount - Many insurance companies offer a discount if you drive less than 7,500 a year.
- Loyalty discount - You can get this discount if you renew your policy with the same insurer for a certain number of years.
- Military/Veteran discount - Those who are in the military or are veterans can qualify for a discount.
- New vehicle discount - You could get a discount if you purchase a new vehicle. A new car means you are the first owner and the vehicle is either a current year model or from the year prior.
- Organizational discount - Certain organizations partner with insurance companies to offer auto discounts to customers. If you are a member of one of these participating organizations, you may get a discount on your auto insurance.
- Paperless discount - You could get a discount by having your bills sent to you by email rather than by hardcopies through traditional mailing services.
- Pay-in-full discount - Insurance companies will typically offer a discount if you pay for the entire year of coverage upfront.
- Profession-based discount - Insurance companies tend to have discounts for people who work in a certain profession. They include:
- Medical professionals
- Law enforcement
Pay your policy in full
You stand to save money when you pay for your coverage in its entirety, upfront. Discounts can be as high as 14%. This means instead of paying monthly installments, you will pay for the six-month coverage period or yearly coverage period in one bulk payment.
Work on your credit score
The better your credit score, the lower your premiums will be. Your credit score (FICO score) is determined by looking at 5 factors; payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). The lower your credit score, usually the more debt you have. The more debt you have, the more financially unstable you are seen as being by an insurance company. If an insurance company sees you as being a financial risk, they either won’t insure you or they will charge you a higher premium.
Use a telematics device
You can be rewarded with discounts as high as 40% by being a safe driver or if you don’t use your vehicle often. Insurance companies can judge this by using a telematics device. The device can be an app on your phone or a separate piece of equipment that is offered by the insurance company. These devices can track when you use your vehicle, how fast you drive and how far you travel. These factors help determine your rate. Savings can be as high as 40%
Take a defensive driving course
You could potentially get a discount on your auto insurance by taking a defensive driving course. These courses are designed to make drivers develop better driving habits to avoid accidents. Insurance companies see this as a proactive step towards being a safer driver, which in turn means you will be less likely to file a claim.
Take advantage of group rates
It is possible your place of business offers group coverage for auto insurance. These rates are typically lower than individual pricing. Be sure to check with your employer to see if they offer group auto insurance. If they don’t, it may be worth bringing it up to them as they may decide to provide this benefit for their employees in the future.
Park your car in a garage
You could potentially save money on your car insurance if your vehicle is stored in an enclosed, private garage. Insurance providers usually view public garages and street parking as high-risk areas. The reason for this is there are more chances for something to happen to your car. Because of this, an insurance company may give you a higher rate. If you are able to park your vehicle in a private, enclosed garage, you may be able to save on your policy. Vehicles parked in a garage are far less likely to be stolen and are certainly less likely to be damaged by hit and runs. The lower the risk, the lower the premium.
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