Ten Ways To Cheaper Auto Insurance
You’ve heard them before: all the traditional ways to lower insurance premiums. Raise deductibles, carry state minimum liability coverage, get rid of towing and labor and extra options, and more. But not all of those are always true and can sometimes cause premiums to increase either presently or in the long term, and not all are logical, the best choice, and sometimes you may not even be allowed to try the usual methods. Sometimes people simply can’t do the typical methods for one reason or another, such as when they have a car loan which dictates what coverage they need or if they’re not in a financially secure spot allowing them to try the typical ways.
As auto insurance has evolved, ways to save have too. Here are some classic ways to save on auto insurance combined with a few new tips. If one doesn’t work for you now, don’t write it off—it may in the future, so always keep these in mind so as YOU evolve, your premiums can evolve too—into lower ones.
- Shop different providers for the cheapest auto insurance. Get a few different prices from each insurer AND from different companies–picking the first one or two you come to will probably not give you the best option. We can save you some time by getting you the best rate from 20+ different insurance companies. Visit our auto quote page to get an instant online quote in only a few minutes.
- Avoid having a loan on the car and only carry full coverage if the vehicle is newer. Most lien-holders require you to carry collision and comprehensive coverage on your vehicle and dictate the deductible you have to carry. Without a loan, you may be able to carry liability only or can assume more financial risk by increasing collision and comprehensive deductibles. If you eliminate the need for collision insurance or can raise deductibles you could potentially save thousands over the course of a lifetime–money that would truly come in handy in retirement.
- Seek discounts from safety and security features. Make sure you inform insurers about all of the safety and security features of your car to ensure you’re getting all the discounts it’s eligible for. These can include both factory alarms and ones you’ve installed, as well as features like ABS, multiple airbags, and automatic safety lights.
- Assume less risk on liability by increasing liability protection. Bigger discounts are assessed when the bodily injury coverage limits are at or above $50K. Insurers view those who carry higher liability limits as ‘responsible drivers’ and eventually that will get you cheaper insurance AND more coverage. Contrary to popular belief, higher liability limits are actually not much more expensive—sometimes you can get $50K more in coverage for literally a few extra cents a month.
- Keep all insurance products with one company. The cheapest auto insurance premiums are usually obtained by people who have several policies with one carrier. If you buy auto, home, boat, motorcycle, or RV policies with one carrier, you can get a multi-policy discount AND a multi-vehicle discount, saving up to as much as 25% at times. Additionally, most people that have multiple policies with one carrier statistically stay with the same insurer longer than those who have multiple insurance policies with multiple companies, leading to loyalty discounts and long term customer discounts. If you stay insured with one company for a long time, still check for discounts every so often. They may have added an additional discount program that you qualify for or perhaps your situation changed in the past couple years that allows for a discount you weren’t eligible for before. For example—married people have cheaper premiums, so if you recently got married, you’ll likely see premiums decrease. Any life change should prompt a check with your insurer.
- Don’t quit school. The higher your education, the more discounts you could be receiving for education. Students under age 24 can typically get good student discounts if they’re full time and have a GPA of at least a 3.0. Additionally, you can also qualify for affinity discounts just for being an alumni of a certain college or belonging to various clubs or sororities. These vary by insurer, but always find out what organizations or clubs they offer discounts for. Sometimes you can get a discount for being a member for a particular credit union or bank as well.
- Choose a professional occupation for an occupational discount. Some companies provide cheaper auto insurance premiums to those low-risk occupations, and some give discounts to those in the government or military. Other companies provide discounts to service occupations like firefighters, police personnel, teachers, and investigators, and also provide discounts to employees of particular companies, so always inform insurers who your employer is so they can check to see if there’s a discount for that employer.
- If you drive minimally, consider usage based insurance. It makes the most sense for someone who barely ever drives and can save you tons of money in premiums. It doesn’t make sense to pay the same rates for auto insurance as someone who drives 1K miles a week if you only drive 2K miles a year.
- Young people should stay on a parents’ policy. Preferably the parents’ policy will have higher coverage limits, and then youthful drivers should bridge to their own policy–with the same company–once they have a solid three years of clean driving history. Some companies write ‘spin-off’ policies, which means that when the teenager is ready to get their own policy, they can ‘spin-off’ their parents policies onto their own and STILL have ANY discount received on their parents’ policy transferred to their own new policy, a perk provided to encourage drivers getting their first policy to stay with the same company. Even if the parents received a homeowners discount but the young driver doesn’t own a home, that discount would still be applied to the spin-off policy.
- Make sure your vehicle is rated for its use properly. A vehicle rated as a pleasure vehicle is usually cheaper to insure than a vehicle rated as a commute vehicle. Don’t be dishonest of course, but verify that your vehicle is rated as it should be. If you only drive the car on weekends or a couple times a month, it should be rated as pleasure. If you drive your vehicle to work or school daily, it’s rated as a commute vehicle. Antique and collector cars should generally be rated as pleasure vehicles if not used for commute. Sometimes insurers automatically rate a vehicle as commute since that’s common and makes sense since most people commute to and from work. With the increase of telecommuting though, more people only use their vehicles as pleasure vehicles though, resulting in cheaper premiums. The less time you spend on the road, the fewer risks you face, resulting in cheaper premiums.
Not all will work for everyone, and some may not work presently but will in the future. One thing is for certain though–at least one of these will result in cheaper auto insurance for anyone.