Tips for Saving on Your Auto Policy
If you own a car, you’re almost always legally obligated to insure it. And just like tolls, fuel and regular maintenance, the cost of auto insurance is an inevitable transportation expense
But that doesn’t mean it’s a one-price-fits-all equation. In fact, there are lots of ways to save money and earn discounts on your auto policy. Here are our top tips for keeping your insurance costs down:
1. Comparison Shop
Don’t choose your insurer because you like a company’s ads. Compare at least three quotes for your insurance, and make sure that you’re comparing the same coverage levels. You can save hundreds of dollars a year by shopping around.
2. Consider Policies with Higher Deductibles
By choosing a policy with a higher deductible—how much you pay out of pocket for a loss before your insurance kicks in—you can save from 15 to 40 percent or more on the cost of your premium.
3. Limit Your Coverage on Older Cars
If you have an older car, you can save money by forgoing comprehensive and/or collision coverage and purchasing only liability insurance. Check the value of your car online in the Kelley Blue Book, and consider dropping optional coverage if your car is valued at less than 10 times the premium cost.
4. Buy a Car with Insurance in Mind
If you’re shopping for a car, you may want to consider insurance options and costs before you make a purchase. Some models and styles—like sports cars—will come with higher insurance costs. Cars with good safety records and safety features such as anti-lock brakes can usually be insured at lower costs.
5. Ask About Discounts
Insurers want your business, but they also want to limit the number of claims they pay. They aim to promote safe driving, as well as attract and retain responsible drivers as customers by offering a range of discounts. Ask your insurer about available discounts for:
- A good driving record, with no tickets or accidents over the last three years.
- Taking a defensive driving course.
- A strong credit history.
- Driving a limited number of miles; e.g., if you don’t drive to work.
- Multi-policy savings; e.g., purchasing your auto insurance and your homeowners insurance from the same insurer.
- Being a long-time customer.
- Anti-theft devices.
Insuring Teen Drivers
Because of their inexperience on the road, teen drivers are more likely to get in collisions. Insurance rates for teens are usually higher, but there are ways to help control costs, including:
- Put teen drivers on a family policy rather than purchasing a separate policy.
- Assign teen drivers to the least valuable car on your policy. (This is not an option from all insurers.)
- Make sure your teen takes a drivers training course.
- Ask about discounts for good grades.
If your teen attends college 100 miles or more away from home and doesn’t take a car along, you may be able to cut your premium, while still maintaining coverage for your teen driver during school breaks.
Whether you work with an independent insurance professional or directly with an insurer, it’s worth talking through all of the options that can save you money on your car insurance. It can really add up—especially over years of driving.