8 Money-Saving Car Insurance Hacks

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Car insurance protects you from a huge financial loss in the event of an accident or theft. If the unthinkable happens, your car insurance company covers repairs, medical bills, and any other losses stated in your policy.

But paying for insurance feels like a chore to many people.

You’re required to maintain car insurance in almost every U.S. state. However, you get to choose how much you pay for coverage. Luckily, many auto insurance companies offer affordable premiums and deductibles.

If you want to get the coverage you need at a much lower price, you should consider these tried-and-true car insurance hacks. They can help you save on your monthly car insurance premium. Here are 8 money-saving car insurance hacks to try today.

1. Practice safe driving

If you want to keep your car insurance costs down, learn to avoid traffic violations or at-fault accidents. The more casualties you have, the more you’ll pay for coverage. A good driving record allows you to negotiate a lower rate with your insurer.

For extra savings, you can take a defensive driving course. Most auto insurance companies provide discounts for drivers with an approved defensive driving certificate. It can help you get a 10% or more discount on your premium.

2. Increase your deductible

You can pay money out of pocket before the car insurance company steps in to cover the repair cost. That amount is referred to as a deductible. If your deductible is high, your monthly payments can substantially reduce.

A $500 deductible can reduce your collision and comprehensive coverage cost by 15 to 20 percent while a $1000 deductible can help you save up to 40 percent. If you can afford to pay higher when you file a claim, you can choose this method.

3. Improve your credit score

An excellent credit score can help you score lower insurance rates. If you’re in a state where your credit score affects your insurance rate, you can improve it by paying your bills on time, obtaining less credit, and keeping your credit balances low.

Make sure to check your credit score often and correct any errors so it stays accurate. Many insurance companies use credit history to determine insurance policy prices. A good credit record allows you to save on these payments.

4. Review your insurance rate annually

Another car insurance hack is to review your insurance rate every year. Significant changes in your lifestyle can contribute to a lower rate. For example, older and experienced drivers are eligible for less car insurance rates.

Circumstances such as moving into a safer neighborhood or buying your first house can help to reduce your insurance premiums too. If you got married or started working from home, there may be some potential savings for you to unlock.

5. Compare prices

Insurance companies are always adjusting their rates. While some are increasing their rates, others might be decreasing theirs. Shop around and compare prices to get a better deal. Many insurers also offer discounts for new customers.

You should get car insurance quotes from different companies. This will help you find affordable rates and compare their coverage policies. You can contact insurers in your state, use price comparison sites, or ask friends for recommendations.

6. Bundle policies

When you combine home and auto insurance policies, you might be able to secure a huge discount on your monthly payments. Multiple vehicle policies also knock down your rate if there’s more than one car in the household.

If you’re under the age of 25, adding an older driver to your policy can decrease your rates. You can also choose to stay under your parent’s policy or any older relative. Many insurers can let you bundle life insurance and renter’s insurance too.

7. Pay in full

Many drivers prefer to pay their insurance premium every month because it’s easier and less tasking that way. But many insurance companies offer discounted rates to people who pay their full premium amount upfront for the year.

Each time you make a monthly payment, you’ll pay a convenience fee which adds more to your annual premium. If you can afford to pay your 12-month policy in full, you’ll end up saving hundreds of dollars each year.

8. Switch to pay-per-mile insurance

If you drive less than the national average of 12,000 miles per year, you should consider switching to pay-per-mile car insurance. You’ll pay for coverage based on the number of miles you drive and save a lot of money.

Pay-per-mile insurance is best for people who work from home, use public transport, and don’t have to drive much over a long period of time. College students are also able to make the switch to a pay-per-mile policy.

Conclusion

Car insurance shouldn’t be digging a hole into your pocket. Factors such as your age, credit, state, driving history and more can affect your insurance rates. The car insurance hacks above will help you save on your premiums.

Author
C. James

C. James is the managing editor at Wealth Gang. He has a degree in finance and a passion for creating passive income streams and wealth management.

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