Nobody likes paying for car insurance, and it's getting more and more expensive all the time. Fortunately, you, the driver, have more control over the cost of your car insurance than you realize! If you are willing to make some small to moderate changes, you can lower the cost of insuring your car in less time than you ever thought possible. Following are 7 proven ways to spend less on car insurance, without sacrificing coverage or safety.
1) Drive safely and defensively
By far the most effective way to lower the cost of car insurance is to avoid tickets, accidents, and infractions. It should go without saying that these things tip off your insurance company to the fact that you are riskier than safer drivers, causing them to charge you more. If you currently have an excellent driving record, great! Keep it up, and turn to the other 6 tips below. If you have an accident or two on your record, don't worry. There's nothing you can do about it now except drive more safely and avoid them in the future.
2) Shop around before settling on one insurer
What's true of most services is also true of auto insurance: shopping around is a surefire way to get the lowest price. These days it's easier than ever to compare prices among different insurers, with some websites offering quotes in as little as 5 minutes. It might seem tedious, but don't skip this step! Spending a couple hours on a Sunday afternoon price hunting can spell hundreds or even thousands of dollars in savings each year.
3) Drive a car that is percieved to be safe and/or undesirable
Part of the reason your car insurance costs what it does is the car you drive. The reason for this is simple: part of how the insurance company determines what to charge you is an analysis of how much it would cost to repair or replace your car. Obviously, replacing a bumper on a Volvo station wagon is nowhere near as costly as replacing one on a brand new Jaguar XJ8. Keep this in mind when shopping for your next or first car. If possible, buy a car that is percieved to be safe and/or undesirable, and it'll cost less to insure that than something flashier and more expensive.
4) Don't buy insurance from your auto lender
If you took out a loan or lease to buy your car, the lender may try to sell your car insurance as well. Don't buy it from them! Research and the experiences of many unhappy lender insurance customers has shown that this is just about the most expensive way to insure a car there is. It is almost always cheaper to shop around among various insurance companies and buy from one who you are not also borrowing money from.
5) Take advantage of discounts
Most car insurance companies offer discounts for behaviors or habits that make you less risky. For example, most insurers offer discounts to non-smokers and non-drinkers. (These people are statistically less likely to get into a car accident.) Some insurers offer discounts for exceptional grades in high school or college, such as Phi Theta Kappa's current 8% off discount partnership with GEICO.
6) Pay your entire year's premiums in one lump sum
According to finance guru Mary Hunt, paying your entire year's car insurance premiums in one lump sum will save you money. This is a somewhat drastic change from the common practice of paying per-month or per-four months, but if you can scrimp and save enough to pay it all in one shot, you can save money and forget about car insurance payments for the entire year! Clearly, this would be good from both a financial and peace-of-mind standpoint.
7) Raise your deductibles
The fastest way to lower your monthly premiums is to raise your deductibles - ie, the amount you are responsible for paying in the event of an accident before insurance kicks in. Raising your deductibles can lower your premiums significantly, but don't rush into it! Before you raise them, make sure you have enough money saved in reserves, just in case an accident crops up and you actually have to pay those higher deductibles. Once this is established, you can raise them without worry and enjoy your new, lower monthly premiums!
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