Car insurance is important, and it is illegal to drive without it in most states. While it comes with a significant financial commitment, it shouldn’t milk your pockets dry. If you feel that your auto insurance costs are too high and would love a cheaper option, the tips will come in handy.
1. Shop around for cheap auto insurance
It would be an expensive mistake if you let your car insurance company renew your policy automatically before you shop around first for a cheaper deal. As much as it may be tempting to go with the convenience of an auto-renewal, it is rarely the best deal. Why pay for more when you can take a few minutes on a market research site with car insurance rankings and find a better deal?
Such sites offer reliable, in-depth reviews of different insurance companies based on affordability and other key performance indicators of the industry.
2. Only pay for what you need
Go for an insurance cover that only has what you need and at a reasonable price. Do not go for an expensive cover with add-ons that you might not even need. For example, if you have an older car whose value has significantly depreciated, going for a third party or a fire and theft policy instead of a comprehensive cover could save you some money. It would also help to check whether buying add-ons as separate products would be cheaper than having them included in your cover.
3. Look out for car insurance discounts
One way to save money on your auto insurance is by checking if you qualify for any discounts. Discounts can drastically bring down your car insurance costs. These insurance discounts could be from using the same insurer for your other vehicles, having membership in certain organizations, making full upfront premium payments, or having better security features in your car.
4. Pay your credit on time
A good credit score is crucial in determining your insurance premiums. Your credit score will be better when you pay your bills on time and keep your credit balances low. A good score is an indication that you are also likely to file fewer claims, which you can use to convince the insurance company to give you a better premiums rate.
5. Be a good driver
If you wish to get cheap car insurance rates, you need to keep your driving record clean. Your history as a good driver is proof to the insurance company that you are less likely to get into an accident, hence cheaper to insure. To become a good driver, remain vigilant and reduce distractions when driving, park with care, and observe the driving laws in your area.
6. Get usage-based car insurance discounts
If you normally drive for a few miles, you can opt for a usage-based car insurance discount. This option can be beneficial for you if you cover under 10,000 miles in a year. If your schedule entails working from home or carpooling often, ask your insurer for low-mileage discounts, and in turn, a cheaper car cover.
7. Make annual payments
Making a lump sum payment on your car insurance is cheaper compared to making monthly payments. Installment payments come with added interest, so you end up paying more in the end as opposed to making a one-off payment. If you are short of cash, consider using a zero percent purchase credit card to pay for the cover and clear the card debt within a year.
Do not take too long between the time you inquire about the car insurance cost and the time you take up the cover. Insurers tend to change their rates at any time.