How to Save Money on Car Insurance: A Comprehensive Guide

Car insurance is a necessary expense for vehicle owners, but it doesn’t have to break the bank. There are numerous strategies to reduce your car insurance costs without sacrificing essential coverage. In this blog, we’ll explore various tips and tricks to help you save money on car insurance. Whether you’re a new driver or a seasoned one, these insights can help you keep more money in your pocket.

Look for Discounts

Insurance companies offer a wide range of discounts that can significantly lower your premiums. Some of the most common discounts include:

• Good Student Discounts: If you’re a student maintaining a certain grade point average, you may qualify for a discount.
• Senior Discounts: Accident-free drivers aged 55 and up often receive discounts.
• Safe Driving Discounts: Completing a defensive driving course or maintaining an accident-free record can earn you a discount.
• Affiliation Discounts: Members of certain organizations, military service members, and federal employees may qualify for discounts.
• Payment-Related Discounts: Paying your annual premium upfront or setting up automatic payments can save you money.
• Digital Discounts: Getting a quote online, signing documents digitally, or receiving statements electronically can also reduce your premiums.

Compare Prices

It’s essential to review your existing auto insurance policy at least once a year and get quotes from other insurance companies. Comparing the same coverage levels and deductibles across different insurers can help you find a better rate. If you find a cheaper option, contact your current insurance company to see if they can match the rate. This way, you might save money without switching insurers.

Raise Your Deductible

The deductible is the amount you pay out of pocket before your insurance coverage kicks in. Increasing your deductible can lower your car insurance rate, but it will cost you more in case of a claim. Before raising your deductible, consider the value of your vehicle and the size of your savings account. Opting for a higher deductible could mean paying thousands of dollars if you ever file a claim. To mitigate this risk, you can build a financial cushion by saving the money you save on premiums in an emergency fund.

Reduce Your Coverage

If you have an older car that’s paid off and not worth much, you might save on premiums by dropping collision and comprehensive coverage. Collision coverage pays to repair or replace your car if it’s damaged in a collision, while comprehensive coverage pays if your car is stolen or damaged when not driving. Both coverages are typically included in standard car insurance policies and are limited to the value of your car. If your deductible is $500 and you total a car worth $2,000, insurance would only pay $1,500. In such cases, it might make more financial sense to cancel collision and comprehensive coverage and put the savings toward a new car.

Cancel Unnecessary Add-Ons

Your car insurance policy might include extras you don’t need. Review your policy to identify and cancel unnecessary add-ons, such as:

• Rental Reimbursement Coverage: Pays for a rental car while your vehicle is being repaired for a covered loss.
• Windshield Replacement Coverage: Repairs or replaces windows and windshields with a low or no deductible.
• New-Car Replacement Insurance: Replaces a totaled car within a certain number of years or miles with an equivalent new car.
• Roadside Assistance Coverage: Provides assistance if your car breaks down on the road.

Some add-ons may be worth keeping, depending on your needs. For example, if you don’t belong to another roadside assistance program, you may want to keep this coverage.

Consider Usage-Based Insurance

Usage-based auto insurance offers lower rates to customers who drive less than the average. You may qualify if you drive under 12,000 miles annually, although each insurer sets its own standard. Low-mileage insurance requires reporting your odometer reading regularly or, in some cases, installing a tracking device in your car. A related option, pay-per-mile insurance, charges a base premium per month plus a per-mile assessment for each mile you drive.

Choose the Right Vehicle

When buying a new car, consider how it will affect your insurance premiums. Some insurance carriers offer lower premiums for alternative-fuel vehicles, including electric cars and hybrids. You might also save by opting for a car with factory-installed anti-theft devices or safety features such as alarms, tracking systems, airbags, or anti-lock brakes. For example, Geico says an airbag can save you up to 23% on your premiums.

Bundle Your Policies

Insuring more than one vehicle with the same insurance company generally reduces your premiums. You’ll also typically get a discount if you purchase multiple types of insurance from the same carrier. This practice, known as bundling, includes buying homeowners, renters, or life insurance along with your auto insurance.

Improve Your Credit

Most states allow the use of credit-based insurance scores when setting auto insurance premiums. Unless you live in California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon, or Utah, insurers may check this credit score to estimate your likelihood of filing a claim. Credit-based insurance scores are calculated using information from your credit report.

Although you can’t easily check your credit-based insurance score, checking your regular credit score can give you a good idea of where you stand. Review your credit report to ensure it’s up to date and take steps to improve your credit score, such as paying bills on time and bringing late accounts current. These moves can also help boost your credit-based insurance score, which might mean paying less for car insurance.

The Bottom Line

Paying car insurance premiums will probably never be your favorite activity, but following the steps above can ease a bit of the sting. Evaluate your car insurance needs, assess your budget, and consider which ways to save might work for you.

At O1ne Mortgage, we understand the importance of saving money wherever possible. If you’re looking for expert advice on mortgages or any other financial services, don’t hesitate to call us at 213-732-3074. Our team of professionals is here to help you navigate your financial journey with ease and confidence.

Remember, saving on car insurance is just one way to improve your financial health. For more tips and personalized assistance, reach out to O1ne Mortgage today!