Car insurance is a necessary evil; we are required by law to have it, yet we hardly ever use it. Like all other bills, I have researched ways to save money on car insurance that actually work. Some of these options are well known and some are new. To be thorough, I have included the old and the new ways to save money on car insurance.
Multiple line discount - insure all cars and homes with the same insurance company to receive a discount
Limit Your Driving - If you work from home or were recently laid off, tell your agent. Many companies will reduce your premium if you drive less than 100 miles per week (varies by insurance agency).
Safe Driving Discount - You might eligible for a discount if you have been free of accidents and tickets for several years.
Raise your deductible - A bump up in the deductible will allow you to keep hundreds of dollars in your pocket. Over several years of being accident-free, that savings quickly adds up.
Shop around for deals - Tell you agent you are shopping around for cheaper premiums. If you are valued customer, your agent should re-evaluate your policy and look for ways to reduce your premium.
Under 25 parent discount - At the age of 25, car insurance premiums decrease because insurance companies feel the driver is now more experienced. However, parents under the age of 25, will also receive this discount because the insurance companies feel a parent is more responsible. Note: you will not receive another reduction once you turn 25.
Full coverage or liability - An insurance company will not spend more money repairing a car than it is worth. Therefore, check the value of your car using Kelley Blue Book and determine whether full coverage if still needed or if it is best to switch to liability.
Talk to your agent before buying a new car - The shiny red sports car and the gadget filled luxury car might look good on the dealership floor, but the premiums might cost an arm and a leg. Check prices with your insurance agent to help you make the best decision.
Avoid short-term policies - Penalties are often applied, think long-term
Avoid lapses in your insurance - If you let your policy lapse, you are likely to be seen as irresponsible or high-risk. As a result, your policy will be more expensive than it was before to renew.
Only insure cars that you drive - The old Ford that has not been driven in years should not be insured. However, depending on the state you live in, all registered vehicles must be insured. To avoid any problems make sure you register any non-working vehicles as ‘inoperable’.
Refresh your driving skills - Many insurance companies are now providing courses where people can refresh their driving skills. However, fees are applied to these courses; therefore, determine if reduction in your premium will be worth the cost of the course.
Don’t hit anything or get a ticket - Your fault or not, this can increase your policy rate for several years. Keep your eyes on the road. Avoid tickets. Speeding tickets and other moving violations can push your rates up substantially and these, like accidents, usually affect your insurance for 3-5 years.
Don’t insure teenager driver with your car - Premiums for a teenager driver is through the roof. Instead, purchase a safe, used car and only purchase liability. You will save hundreds of dollars.
Have a high FICA score - Many insurance companies are now factoring in ones credit scores to calculate premium cost. A person with a high credit score is rewarded with a lower premium and a person with a low credit score will be punished with a high premium.
Pay semi-annually - This is my favorite way to save money on car insurance. Instead of paying your car insurance monthly, pay semi-annually. The 1st payment is the hardest because you will have to pay the full amount to cover the first six months; think ahead and start saving for this switch. Once you have paid your 1st six month premium, automatically transfer the monthly premium payment into a high yield savings account to earn interest until semi-annual payment is due. By doing this not only are you saving money by avoiding the monthly surcharge fee you are also making money off of interest.
Happy Savings!!