7 Easy Ways to Slash Your Auto Insurance Costs
The law requires you to purchase auto insurance. So if you must get coverage, how can you cut costs? Here are 7 easy ways to get the best auto insurance deal possible.
* Multiple quotes
Get multiple quotes – use the internet and call a few brokers. It’s easy to collect some good comparison quotes.
Remember to get different types of quotes, for example, one from a direct selling insurance company; another from an offline broker who maintains a database of quotes; and a couple from the internet.
Cheaper might not mean better. Will they pay if you make a claim? How financially secure? How respectable? Check with family and friends and look up reviews online.
* Different type of car
Insurance costs vary depending on the type of car. Obviously, that $100k sporty model costs more to insure than your average runabout. If you plan to buy a new car, check the insurance costs before you buy it. I once set my heart on a beautiful, high performance, highly tuned Pontiac.
Luckily I checked the car insurance before I bought it, because I couldn’t get insurance. Every broker, every insurance company floor turned me down because I lived in a high auto crime area. So I had to forget about my dream car until I moved to the city.
* Age and Value of the Car
Maybe you are buying a used car? Perhaps your car saw better days a few years ago, and now has much lower values? So why pay high-priced auto insurance? In particular, do you still need full coverage?
A good rule of thumb multiply the insurance premium by 10 and compare that number to the value of your car. So if you’re quoted a $1000 premium and your car is worth less than $10,000, you might want to think about whether comprehensive coverage is a good value. If you cancel your collision and/or comprehensive coverage, you’ll save big.
* Higher deductibles (excess charges)
Most auto insurance companies use deductibles to keep policy costs down. Deductibles, or excess charges, show what you pay before your auto insurance policy kicks in. Try requesting quotes with different levels of deductibles and see how your quotes vary.
Most online quote forms contain a box where you can specify your preferred level of deductibles. Ask your broker for their recommended level. For example, going from a $250 deductible to $500 can reduce your insurance costs by 20% or more. Go for $1000 and you will save a lot of money. But you must pay the deductible if you need to file a claim!
* Multiple Insurance
I suppose this could appear under the heading “Get multiple quotes”, but it’s worth mentioning separately. You usually get a break in insurance if you buy multiple policies with the same insurer.
This could mean multiple vehicles or auto and homeowners insurance. Either way, it’s worth asking about multi-policy discounts.
* Low mileage
More and more people work at home. No more changes. Less business trips. Low mileage on your car. Maybe you commute to work, but do you carpool?
Either way, look for low mileage discounts.
* Good driving record
A good driving record always lowers your auto insurance costs. Maintain a clean driver’s license. Don’t speed, don’t drive dangerously, and you’ll save money (plus other benefits!)
* Bonus Tip
Ok, I said ‘7 ways…’, but here are some additional tips. Install anti-theft devices in your car. Go to an advanced driver training course. Use daytime running lights. If you are a college student away from home, please consider adding it to the parent policy.
This short article covers things to consider when shopping for auto insurance. Follow these tips and you’ll drastically reduce your auto insurance costs.
© DigiLectual Inc. 2004