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Saving Money on Car Insurace: 4 Things You Should Know

Driving without car insurance can be dangerously expensive in the long run if you get into an accident, plus it’s illegal in most states. You need to be covered, there’s no way around it, but there are ways that you can save money in the process that you may not have thought of before. If you’re looking to save money on the high costs of auto insurance look no further—we’ve got you covered (pun intended)!

1. Think Carefully About Your Options

Assess what you do need from an insurance plan. What can you afford to pay for out of pocket if need be, and what you can’t? Do you park your shiny new car in a neighborhood that has a lot of car thefts? Can you afford to pay for a new car out of pocket if you don’t have comprehensive insurance? If the answer is no, you’re more likely to want to get a better insurance plan.

However, if you’re like me and driving around a beater that’s only worth a few hundred dollars, it’s less likely to be worth it to go in for the biggest and best plan. Consider dropping collision and comprehensive from your insurance plan if your car is already paid off.

Whatever you do, do not forgo investing in liability and injury coverage. If you’re in an accident where the other car is destroyed or the other people in the car are injured, you may be stuck paying more than any car is worth in lawsuits and damages.

2. Increase Your Deductible

Car insurance is there to help protect you (and others) in case the worst happens. However, along the way, your monthly or semi-annual payments start to feel pretty bad too! One quick way to ease the pain is to take a gamble and increase your deductible.

A deductible is just the amount of repair or replacement costs that you have to pay in case you’re in an accident. This might amount to, say, $500. If you know you’ll have the cash, you can save some money every month by raising this to $1,000.

However, it is a gamble. You’re betting that you can save enough money, each month, to make up the $500 when an accident comes. But if you’re flush in cash, and a safe or infrequent driver, you might be right! Be sure to set aside that much in an emergency fund so that you can have the money when you need it, but otherwise you can lower your monthly costs by raising the deductible.

Read more:  Find Out How Big Companies Are Getting Away With Not Paying Young College Grads And What You Can Do To Help

3. Demand Discounts

Are you a student with good grades? Does your car have an airbag? Are you a teacher or a doctor, or in the military? Good news–these are all things that can save you on insurance costs!

Now, many of these discounts are tucked away–insurance companies don’t like to tell you the ways that you can get away with giving them less. However, the discounts do exist! And for good reason: the insurance companies have deduced that good students get in fewer accidents and so they can make more money off those students–or they can attract more students by giving them a break. Be sure to ask your insurance agent, or to check the website for possible discounts.

Another way to get a discount if you don’t fit those categories is to take a defensive driving course. While perhaps not the most exciting thing to do with your weekend, it could save you cash and you’ll certainly learn a thing or two about safe driving! Many companies also give discounts if you drive less than you predicted–less time on the road means less risk of an accident. Be sure to check if you’ve been driving less so that you can save more.

4. Monitor Your Credit, Grades and Driving Record

Did you know that insurance companies use your credit record to determine how reliable of a driver you’ll be? If you have a bad credit record you may end up paying more for insurance than if you’re stellar at paying off your debt and bills.

Likewise, if you’re in school and you get good grades you can usually turn in your grades to the insurance company for a lower rate. This is true if you’re paying your children’s auto insurance as well. Do you need help convincing your son or daughter to get their test scores up? Make them pay the difference in car insurance costs for having bad grades!

Lastly—and somewhat obviously—keep a clean driving record. Avoid speeding and other reckless driving-related tickets. Not only will you be faced with expensive tickets for these mistakes on the spot, but the cost of your insurance will go up too.

No matter what plan you end up going with, make sure that you’re taking time every couple of months to look around for a better deal somewhere else. Looking around for better deals will definitely help you save money in the long run. There’s always a better deal out there, You just have to find it!

Category: Financial News

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