Car insurance is a necessary evil; we are required by law to have it, yet we hardly ever use it. Like all other bills, I have researched ways to save money on car insurance that actually work. Some of these options are well known and some are new. To be thorough, I have included the old and the new ways to save money on car insurance.
Multiple line discount - insure all cars and homes with the same insurance company to receive a discount
Update agent if recently laid off or work from home - Driving less miles per week, usually less than 100 per week can reduce your policy rate.
Safe Driving Discount - You might eligible for a discount if you have been free of accidents and tickets for several years.
Increase your deductible - A deductible increased from $250 to $500 can save a family hundreds of dollars a year. However, if you increase your deductible, make sure you have the extra $250 if you have to file a claim.
Shop around for deals - Tell you agent you are shopping around for cheaper premiums. If you are valued customer, your agent should re-evaluate your policy and look for ways to reduce your premium.
Discount for parents under 25 - Car insurance companies reduce their policy holders premium at the age of 25 assuming there have been no accidents, some insurance companies offer this reduction for parents under that age of 25. However, another reduction will not apply once you turn 25.
Full coverage or liability - You only need full coverage if the value of your car, according to Kelley Blue Book, is worth more than repair cost. If that is not the case, change your coverage to liability.
Talk to your agent before buying a new car - The shiny red sports car and the gadget filled luxury car might look good on the dealership floor, but the premiums might cost an arm and a leg. Check prices with your insurance agent to help you make the best decision.
Avoid short-term policies - Penalties are often applied, think long-term
Avoid lapses in your insurance - If you let your policy lapse, you are likely to be seen as irresponsible or high-risk. As a result, your policy will be more expensive than it was before to renew.
Only insure cars that are driven - Cars that are inoperable do not need to be insured. To avoid any complications or penalties with your state, make sure your car is registered as 'inoperable'.
Refresh your driving skills - some insurance companies offer training courses that can reduce your insurance premiums at the end of the course. There are fees for these courses, so do the math and make sure the training course is worth your money.
Avoid accidents and tickets - Speeding tickets, moving violations, and accidents can substantially increase your rates for at least 3-5 years.
Insure teenager under different car - The cost to insure a teenage driver is insane. If you have the money, purchase a used car for your teenager and only purchase liability; the amount you save will shock you and your teenager will be happy with his/her own car.
Have a high FICA score - Many insurance companies are now factoring in ones credit scores to calculate premium cost. A person with a high credit score is rewarded with a lower premium and a person with a low credit score will be punished with a high premium.
Pay semi-annually - This is my favorite!! A surcharge fee is generally applied to customers who pay monthly. This fee is easily avoided by paying semi-annually. Begin to save up enough money to make the 1st semi-annual payment. After you make that payment, automatically transfer the monthly insurance payment into a high-yield savings account to earn interest. When you receive your semi-annual bill, pull money from your high-yield savings account to cover your premium cost. Any money earned from interest is profit.
Out of the 15 options listed above, I hope at least one of them will help you save money on your car insurance.
Multiple line discount - insure all cars and homes with the same insurance company to receive a discount
Update agent if recently laid off or work from home - Driving less miles per week, usually less than 100 per week can reduce your policy rate.
Safe Driving Discount - You might eligible for a discount if you have been free of accidents and tickets for several years.
Increase your deductible - A deductible increased from $250 to $500 can save a family hundreds of dollars a year. However, if you increase your deductible, make sure you have the extra $250 if you have to file a claim.
Shop around for deals - Tell you agent you are shopping around for cheaper premiums. If you are valued customer, your agent should re-evaluate your policy and look for ways to reduce your premium.
Discount for parents under 25 - Car insurance companies reduce their policy holders premium at the age of 25 assuming there have been no accidents, some insurance companies offer this reduction for parents under that age of 25. However, another reduction will not apply once you turn 25.
Full coverage or liability - You only need full coverage if the value of your car, according to Kelley Blue Book, is worth more than repair cost. If that is not the case, change your coverage to liability.
Talk to your agent before buying a new car - The shiny red sports car and the gadget filled luxury car might look good on the dealership floor, but the premiums might cost an arm and a leg. Check prices with your insurance agent to help you make the best decision.
Avoid short-term policies - Penalties are often applied, think long-term
Avoid lapses in your insurance - If you let your policy lapse, you are likely to be seen as irresponsible or high-risk. As a result, your policy will be more expensive than it was before to renew.
Only insure cars that are driven - Cars that are inoperable do not need to be insured. To avoid any complications or penalties with your state, make sure your car is registered as 'inoperable'.
Refresh your driving skills - some insurance companies offer training courses that can reduce your insurance premiums at the end of the course. There are fees for these courses, so do the math and make sure the training course is worth your money.
Avoid accidents and tickets - Speeding tickets, moving violations, and accidents can substantially increase your rates for at least 3-5 years.
Insure teenager under different car - The cost to insure a teenage driver is insane. If you have the money, purchase a used car for your teenager and only purchase liability; the amount you save will shock you and your teenager will be happy with his/her own car.
Have a high FICA score - Many insurance companies are now factoring in ones credit scores to calculate premium cost. A person with a high credit score is rewarded with a lower premium and a person with a low credit score will be punished with a high premium.
Pay semi-annually - This is my favorite!! A surcharge fee is generally applied to customers who pay monthly. This fee is easily avoided by paying semi-annually. Begin to save up enough money to make the 1st semi-annual payment. After you make that payment, automatically transfer the monthly insurance payment into a high-yield savings account to earn interest. When you receive your semi-annual bill, pull money from your high-yield savings account to cover your premium cost. Any money earned from interest is profit.
Out of the 15 options listed above, I hope at least one of them will help you save money on your car insurance.
About the Author:
I am frugal by nature and am sharing how I save money for all who are interested. Check out this site if you are looking for easy, realistic ways to save money at the grocery store, reduce monthly bills, and the benefits of using a budget spreadsheet. See you on the inside!!
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