US News & World Reports says the average driver in the U.S. pays $1,416 per year for auto insurance. And that price assumes you’re an excellent driver with great credit. In all except two of the 50 states, auto insurance is mandatory for drivers to legally operate their vehicle. Drive without insurance and a traffic stop or accident could mean loss of your driving privileges and potential confiscation of the car. Do not take that chance and save money on the costs of auto insurance with these simple tips.
Skip Comprehensive and Collison
Liability coverage is all that states require drivers to carry. This coverage does not pay for damages to your vehicle, but instead, covers damages to the other driver’s car. You are responsible for covering the damages to your car without this coverage. Often referred to as a full-coverage policy, collision and comprehensive insurance protect everyone who incurs damages after an accident -but it comes at a big cost.
Keep in mind, if you are making payments on your vehicle, the loan or lease company will require you to carry Comprehensive and Collision coverages while payments are being made.
Older model cars may not reap the benefits of this coverage. Before adding collision and comprehensive coverage, make sure it’s beneficial to your car. For most drivers, skipping the coverage can help save money.
Raise Your Deductible
The standard deductible offered by most auto insurance companies is $500. Raise the deductible to $1,000 (or higher if you prefer) for nice discounts on your monthly premium rate. Many people do not realize that adding a little extra responsibility can actually save them a ton of money.
Drivers can save as much as 20% per year when they increase their deductible. Although increasing the deductible puts more risk on your shoulders, it’s worth the risk if you practice safe driving while on the road. Consider a deductible increase for a premium decrease.
Compare Providers
Experts recommend getting quotes from several car insurance companies before selecting a company for your policy. We like to think that one provider is cheaper than another because we see ads on the internet or TV commercials. This can be very deceiving, however. Do not rush to buy car insurance and overpay as result. Car insurance aggregator sites help you compare multiple sites at once or you can visit each car insurance company of interest directly to request quotes.
Once you have chosen a provider, compare rates each year to make sure they remain the best-priced provider. Rates can drastically change year to year, new insurance companies come along, and the current provider may no longer offer the best prices. You will only learn this information if you make annual comparisons.
That is a great benefit of working with an agency like GEC Insurance. We are independent and can shop multiple companies to find the best coverages at the best price!
Watch Your Credit Score
Many auto insurance providers will consider and applicant’s credit before they offer a policy. Research has found that people with poor credit also get into more accidents. This puts the car insurance company at great risk, so they take that risk out on the driver and increase the cost of their car insurance. The worse your credit score, the more expensive the car insurance rates.
Keep credit scores up to par to keep the cost of auto insurance low. That is not the only benefit of a good credit score. Your credit helps determine loan rates, mortgage qualifications, and much more. You can get a free copy of each of your credit reports from the major reporting bureaus each year to help stay informed on your credit activity, and spot fraudulent or incorrect information.
Ask About Discounts
Car insurance providers compete for your business. They must find ways to bring in new customers to keep their business afloat. As such, they offer various discounts to appeal to customers. Ask about discounts and take advantage of any that you qualify for.
Although discounts vary from one company to the next, most offer discounts like safe driver discounts, military discounts, discounts for students, and others.
Combine Policies
Many people have several different types of insurance. Consider using just one company for all the policies for terrific discounts. Most insurance companies offer multi-policy discounts that bundle your policies into one low-cost package each month.
Vehicle Make and Model
Some vehicles will cost more to insure than others. Sports and luxury cars are among the most expensive car insurance rates. Consider the type of vehicle you might be purchasing wisely to keep costs of insurance (and other fees) low.
Auto insurance might be an expense you would rather not pay, but rivers are required by law to carry coverage, so why not save money if possible? The above ideas are among the simplest ways to cut auto insurance costs and keep more money in your pocket.
