There’s nothing like the feeling of scoring a great deal. Maybe you negotiated a better cell phone plan or a rep gave you a better package for internet and TV. Who doesn’t want to save some money on their bills?
If you’re watching what you pay for car insurance creep up and up, there’s hope. Getting cheap car insurance is possible. And it only takes a bit of work from you.
There are things you can do to get that rate down. Some of them are easy short-term fixes and others are things that will take longer to work on.
Here’s what you can do to push down those premiums and get cheaper car insurance:
1. Raise that deductible
Let’s start with something easy you can do with your current car insurance policy.
Your deductible is the amount you pay when you’re making a claim. Your first instinct might have been to go with the lowest deductible possible. After all, you want to pay the least amount of money possible and leave the rest to your insurance company to cover.
But there’s a direct link between higher deductibles and lower premiums. Increasing your deductible from $250 to $500 could reduce your premium by an average of 15 to 30 percent. The savings are greater when you opt for a deductible of $1,000. The premium could come down by 40 percent.
Remember, you’re still responsible for paying the deductible if you want to file a claim. So choose a number you’re comfortable paying.
2. Take a second look at your coverages
When was the last time you took a look at your policy?
Reviewing your coverages alone or with an insurance agent can be very helpful. You might realize you’re paying for coverages you don’t need.
For example, as your car gets older you might not need full coverage anymore. It might make more financial sense for you to go with a liability-only policy. This would bring your premium down.
3. Reconsider how much you’re driving
Driving to and from work every day? Try to switch things up by leaving the car behind more often. You can carpool or take public transportation.
The less time you spend on the road driving, the lower the chance you’ll be in an accident and have to file a claim.
This could pay off because if you drive less than the average driver, you could be eligible for the low mileage discount.
The average annual mileage of a U.S. driver is 12,000. If you drive anywhere between 0 and 7,500 miles a year, you’re considered a low-mileage driver.
4. Think twice before filing a claim
Not only does your driving history matter to insurance companies, but they also look at your claims history. The more files you claim, the more your insurance will climb.
Yes, there are times where you should definitely file a claim instead of paying out of pocket.
For a collision claim, you should be filing a claim with your insurance, especially if it involves other parties. But not every claim is like that. For example, if you’re thinking about filing a comprehensive claim, you’re probably better off dealing with repairs on your own.
Filing one small claim might not have a huge effect on your premium. But filing several small claims will. So just be savvy about when you claim.
5. Choose a car that’s cheaper to insure
Your premium is calculated based on a variety of things. One of the factors considered is your car.
Things like your car’s make and model, how much it costs to repair, its overall safety record, and the likelihood of its theft all come into play when it comes to your premium.
If you’re curious, take a look at various vehicle ratings on the Insurance Institute for Highway Safety website.
6. Don’t discount the discounts
While you’re getting multiple quotes from companies, make sure to factor in any discounts because it will affect your rate.
There is a range of discounts offered, so ask an insurance rep about any that you could be eligible for.
You can receive a discount based on how you pay your car insurance bill.
Paying in full or signing up for an automatic payment plan will save you a certain percentage off your premium. Not only that, you’ll often get a discount for signing up for paperless billing.
How are your driving habits? Are you a good driver? Research shows that most people wouldn’t hesitate to rate their driving skills a seven out of ten.
Insurers will put that rating to a test by looking at your driving record, and your accidents and claims history. You might get the good driver discount if you’ve been accident-free and violation-free for three to five years. If you satisfy that requirement and have a clean driving record, you could get the discount.
If you’re a full-time student, your grades can make a difference in your premium. The requirements are different for every insurance company, but your good grades could land you the good student discount.
If you’re out of school and working full-time, getting insurance through your employer can get you a discount, too. And being affiliated with alumni and professional groups could earn you a discount.
If you get more than one policy from the same insurance company, you’ll get the multi-policy discount. 77 percent of people choose to bundle their insurance. People often go for the home and auto insurance bundle, which can save 5 to 25 percent off each policy.
Do you have more than one car to insure? Adding more than one car to your policy can earn you the multi-car discount.
Insurance companies will reward you with better rates if you’ve had continuous coverage. Any lapse in coverage can sometimes increase your premium by 12 percent.
7. Keep your credit score in check
When was the last time you checked your credit score? While it’s not nearly as much fun as checking social media on your phone, it’s a good idea to keep track of that number.
Bad credit has a pretty big effect on your insurance premiums. A good driver with a bad credit score could potentially pay twice as much for insurance as someone with a clean record but a strong credit rating.
Order a credit report and correct any errors that you see on it. And make sure you’re paying your bills on time. This isn’t a quick fix like the other options. But over time you’ll see the benefits of working hard on improving that number.
8. Shop around and save
It’s easy to get sucked into staying loyal to one insurance company. There are loyalty discounts offered, after all. While you could be getting a great rate for a couple years, that doesn’t mean you’re getting the best rate.
The only way to ensure that you’re getting the best possible deal is to see what other companies are offering. Shop around for car insurance and get multiple quotes from different companies.
A study showed that drivers miss out on an average of $416.52 of savings by not comparing quotes!
9. Ready to make the switch?
If you’ve found a cheaper rate from another company, switching car insurance companies is a breeze. You just need to make sure that you have your new policy in place before you cancel your old one. You don’t want to be driving without insurance even for a day or two.
And once you’ve made the switch, don’t forget that you should shop around at least once every two years. You want to make sure you’re always getting the best deal that you can!
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