The Easiest Way to Dramatically Reduce the Cost of Your Automobile Insurance
Keeping Your Car Insurance Premiums Low
How many of us are guilty of selecting an Automobile
Insurance Company then just paying the premiums year after year without
shopping around? I know I do this… and
as much as I’d like to think that I’m smart enough to get a great deal… I’m
sure there have been times in the past when I’ve paid more for Car Insurance
than I needed to.
But the reality of the matter is most of us simply don’t have the time or do not want to make the time to go through the tedious process of shopping insurance for our autos every 6 months. It’s boring, time consuming, and just not something we consider to be an enjoyable use of our time. So what if we could save an extra few dollars right? That’s probably how most of us feel, but not a good solution in this current economy
Top Ways to Save on Automobile Insurance
How much do you really drive each year? Many people overpay for insurance premiums because they never ask their Insurance Agent about mileage limits. Agents make more money the more they sale. So they will typically factor in a higher mileage amount than you really drive. You need to ask to take advantage of Low Mileage Discounts. Not all Auto Insurance Companies will offer this discount, but your insurer might. So if you only drive 5,000 miles per year there is not reason to pay the rate of another person who drives 25,000
Watch your credit score. I know this is not fair, and in my view its unethical but it’s a common practice for Insurance Companies to monitor your credit score and raise your rates as it falls. The assumption is if you are not paying your credit cards or getting into debt then you are a higher risk to the insurer. In my view it’s just another way for Corporate America to gouge John Q. Public. But there is nothing you can do about it, because the Insurance Companies are going to continue this practice.
Ask about Discounts. Remember back in High School when you took Drivers Education? People who completed the course were offered lower rates. Companies often offer Student Car Insurance Discounts to students with good grades. So ask your Agent about these miscellaneous discounts. It is not in their interest to tell you, they make more money by selling you more. But if you ask, any ethical Agent will step in and help. Remember it’s free to ask, but if you don’t ask you can’t get what you want.
Combine Homeowners Insurance with Automobile Insurance. You may save a healthy sum of money. But you have to make sure… and the only way to know is to ask and find out. The same goes for multi-car discounts. Insuring all your cars with the same company can afford you a substantial discount.
Reduce the coverage on your automobiles as they age. You have to ask yourself is it really worth carrying full coverage on an older model car that has a low book value. You may end up paying a high premium on a car that would be cheaper to simply scrap in the event of an accident. Over the course of a year if the cost of your policy is worth more than the cost of the car to be replaced it simply makes sense to reduce the coverage. Important: You do not want to reduce liability – just the coverage on repairs to the automobile.
Consider higher deductibles. Full coverage with a very low deductible can be very expensive. It may be cheaper in the long run to pay for small repairs out of pocket. After all if you don’t have an accident you lose nothing. But you can not recover paid in premiums.
Shop around. Does your company offer a group plan? Are you a member of an Alumni Association or a Warehouse Club like Costco? Perhaps your spouse’s company offers a group plan that you don’t even know about.
BEFORE you purchase a new car make sure you evaluate the cost of insuring the vehicle. Certain models and brands of cars have a higher cost of ownership due to theft and repairs incurred in accidents. I read a report about car bumpers in particular where a very low speed impact of sedans caused 1,000’s of dollars of damage to bumpers that you would think would be designed to withstand the impact. Today’s cars are in fact much better at protecting occupants in vehicle collisions. But the newer cars are not designed to do that at a lower cost. Remember the old Volvo 240’s? Those cars had amazing bumpers… drive into things at low speed and no damage. Don’t try that with today’s Honda Civic, Nissan Sentra, or Chevy Malibu. Cars used as examples because they have color matched bumpers, I did not research the cost of actual repair costs.
So the next time your insurance comes due pick up the telephone and call your Car Insurance Agent and see what you can do to reduce the cost of your premiums.