9 Tips to Save on Your Auto Insurance Premium

Buying and owning a car can be a big expense for any person or family. If you’re on a tight budget or trying to add to your savings account then finding ways to cut costs is extremely important. Although insuring your car can be pricey, there are several ways to reduce your auto insurance premiums and save a significant amount of cash.

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Are you considering your car insurance options and how to save money on your premiums? It might be a good idea to start by reviewing the cancellation policy for your current coverage.

Some insurance providers charge fees or penalties for not providing a certain amount of notice prior to cancellation. Before you cancel anything, however, make sure you have a new policy in place so that your car remains insured at all times and its coverage does not lapse.

Now that you’re ready to shop for car insurance, follow these nine tips and save yourself some serious money: drive your car safely, pay your premiums on time, raise your deductible, drive an inexpensive and safe car, upgrade your current vehicle, improve your driving profile, review your current coverage, compare insurance providers and, last but not least, ask for a discount.

Tip One: Drive Your Car Safely

Of course, one of the best ways to save on premiums is to drive safely and avoid car accidents or traffic violations.

Insurance providers offer lower rates to people with clean driving records. These folks are less likely to be involved in an accident, which will cost the company money. One of the fastest ways to increase your insurance rates is by causing an accident or getting several traffic tickets.

If you already have a poor driving record then you may be having a difficult time buying new car insurance or finding coverage you can afford. The Patient Advocate Foundation provides contact information for every State Insurance Commissioner, who offer insurance policies for drivers that are considered high risk.

Tip Two: Pay Your Premiums on Time

Another way to be an attractive customer to insurance providers and keep your payments low is to pay your premiums on time. If you have a track record of paying your premiums late, or even worse, you’ve had your insurance cancelled because of non-payment; companies will see you as a risk and charge you more.

Insurance providers may also look at your overall credit rating when determining your premiums. So paying your other bills on time will also save you money on your car insurance.

Another way to lower your insurance premiums is by agreeing to pay every six months or annually rather than monthly, as many providers charge less overall if you pay in larger installments.

If you decide to pay monthly, you can still save time and cash by paying via debit instead of mailing a check. Some companies charge a small fee to process payments that are sent by mail.

Tip Three: Raise Your Deductible

If you have some money saved you may want to consider raising the deductible on your car insurance to lower your premiums. The deductible is the amount of money you agree to pay for damages anytime you file a claim, before your insurance company pays the remainder.

For example, if your deductible is $100, then you will have to pay $100 towards any repairs and costs. If you raise your deductible to a higher amount, potential providers will have to pay less if you make a claim. They can charger lower rates as a result.

Only raise your deductible if you’re certain you will have the money that’s required to file a claim.

You might want to consider putting aside the funds that are needed to pay for your deductible, so that it’s ready to go in case you need it.

Tip Four: Drive an Inexpensive and Safe Car

Keep your auto insurance premiums low by driving a car that won’t require frequent or expensive repairs. If you drive a luxury vehicle or a sports car that will cost an insurance company thousands of dollars to fix, your premiums will be higher.

Valuable cars are also more likely to be broken into or stolen, so providers will charge more for your insurance because of the likelihood that a claim will be filed.

Consider whether your car is a high risk to insure because it’s more likely to be involved in an accident. Ask yourself these questions if your vehicle is:

• An extremely fast car and more likely to be driven at dangerously high speeds?
• Equipped with modern safety features that reduce the chances of it being involved in an accident?
• A durable vehicle that is less likely to be damaged in a crash?

All of these factors will help determine the price of your insurance.

The safer and less expensive a car is, the lower your insurance rates should be.

Some companies, like Quadrant Information Services, conduct regular studies to determine which cars require higher premiums to insure. The U.S. Department of Transportation also provides information about which vehicles have great safety ratings.

Tips Five: Upgrade Your Car

Although you may be driving an older and less expensive car, if an insurance company thinks your vehicle is unsafe or easy to steal your insurance rates will be higher. While it may cost some money to upgrade your current vehicle, in the long run, it will be well worth the expense.

Investing in anti-theft devices like a car alarm or an immobilizer will make your car harder to steal. Also, installing safety features like parking sensors and winter tires, for example, will make your car cheaper to insure.

Tip Six: Improve Your Driving Profile

Although you don’t typically have to take driver’s lessons to get your license, many insurance providers offer lower rates to people who have. Even if you’re an experienced driver, you may want to take additional driving lessons to refresh your memory or improve your driving skills for dangerous driving conditions.

The better driver you are the less chance you’ll have of getting in an accident.

Some insurance companies offer discounts to senior drivers who complete driving courses that are specifically designed for them. Courses for seniors and experienced drivers help educate them about modern safety measures and more recent regulations.

Organizations like US Driving Lessons provide information about various driving schools and courses throughout the United States.

Tip Seven: Review Your Coverage

Another way to save money on your auto insurance is to review your current policy to see if you still require the same amount of coverage. Some of the things to consider include: are you still driving as much as you were when you first purchased the policy? Or are you rarely using your car compared to say a year ago? Have you moved or switched jobs, and a result, are you driving in lighter traffic?

Although it’s important to carry enough coverage for your vehicle, and protect you from what could be costly damages in an accident, you may not need as much insurance as you once did.

The less coverage you need for your vehicle the lower your premiums will be. Before you make any changes to your coverage, however, be sure to carefully review your policy and check with your state government to review the minimum basic requirements and recommended options.

Tip Eight: Compare Insurance Providers

Of course, one of the more effective ways to lower your insurance premiums is to compare the rates that all the major providers are offering. Not only does this get you the lowest prices available, but some providers will try to match or beat their competition if you tell them that you can get a better deal elsewhere!

It may take a little time to conduct the research but it could save you a good chunk of money. There are several ways that you can find insurance rates and compare what the major providers are offering.

Some of these include contacting an independent insurance broker or agent, discussing your insurance options with your bank, contacting each major provider and asking them for a quote, and referring to websites that specialize in comparing insurance rates.

By researching beforehand, you can also find out more about each company and whether other people have been happy with their provider’s products and service.

The Better Business Bureau is great place to start and find out more about a company’s reputation.

Tip Nine: Ask for a Discount

Last, but not least, if you’ve always paid your premiums on time and have kept a clean driving record, then asking a provider for a discount is a great way to reduce your insurance rates.

In particular, if you’ve been a reliable driver with the same insurance company for quite some time, then you’re probably due for a discount. Some companies offer discounts for senior drivers or veterans, so if you fall into this category, be sure to ask about one.

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