According to a 2019 study, Americans on average are paying $3,719 every year for their automobile insurance. Hefty car insurance premiums can consume a sizable portion of your household budget and make it difficult to cover your other bills or save for retirement. However, it doesn’t have to be that way. You can take steps to ensure that the cost of insuring your vehicle doesn’t balloon out of control. Here are eight tips for keeping the cost of your automobile insurance low.
1. Shop Around and Compare Prices
Never settle on a car insurance policy. Scores of insurance companies offer automobile insurance, so make sure you reach out to several of them to determine which policy works best for you. Fortunately, multiple websites and apps make it easy to search for car insurance policies, so finding the right car insurance for your situation should be easy. Most of these apps and websites can help you compare auto insurance pricing, so it’s easier than ever to find a good policy and lower your car insurance premium at the same time.
2. Raise Your Deductible
If your current auto insurance premium is too large a portion of your current budget, another way to lower it is to raise your deductible. Your insurance deductible is the amount you’d have to pay in a claim before the insurance company would provide funds. Raising the deductible can often help lower the amount your policy costs each year. However, keep in mind that if you do have to file an insurance claim, you’ll have to pay more money out of pocket.
3. Be a Good Driver
One of the best, simplest, and most cost-effective ways to keep the cost of your automobile insurance low is to be a good driver. Avoid the kind of driving behavior that can lead to sudden, sharp increases in your insurance premiums, such as speeding tickets and other driving infractions, as well as accidents. Additionally, drivers under 21 who enroll in and pass some sort of driver safety course may be eligible for insurance discounts in some cases. Maintaining a solid driving record over time will help ensure your auto insurance premiums are as low as they can be.
4. Buy a Better Car
Some cars are more affordable to insure than others are. If you want to keep the cost of your auto insurance low, try to choose an automobile that costs less to insure. Cars that have excellent safety features, such as airbags, anti-lock brakes, anti-theft car alarms, and similar features often cost less to insure than vehicles without those features. Cars that cost less to repair after collisions, or that statistically are stolen or damaged less than others are, are often more economical to insure as well.
5. Reduce Your Insurance Coverage
Maybe the reason you’re paying too much for car insurance is that you’ve purchased more coverage than you need. For example, if your car is only worth a few thousand dollars, then paying for comprehensive collision coverage may not make sense. Additionally, if you only drive your car occasionally, it may not make sense to pay the same premium as a full-time driver. So, take some time to determine how much auto insurance you really need, and make sure you don’t pay for more than that.
6. Bundle Your Insurance Policies
Another easy and straightforward way to lower your automobile insurance premium is to buy your car and home insurance policies from the same company. This practice, which is sometimes referred to as bundling, can drop your insurance costs significantly. While it may vary from state to state, bundling auto insurance with homeowner or renter’s insurance saves policyholders an average of 15.97% on their annual premiums.
7. Ask for a Lower Rate
Another way to pay less for your auto insurance is to ask your insurance company for a rate cut. If you’ve shopped around and found a comparable lower cost premium, let your insurer know; the company may be willing to decrease your policy’s cost to keep you as a customer. Additionally, you should always ask your insurance company whether you qualify for any sort of rate discount. Insurers are often aware of discounts that you’ve never heard of, and these can save you money.
8. Fix Your Credit
In many cases, insurance companies will check our credit score when calculating the overall cost of your insurance premium. If you have average or low credit, it’s likely impacting how much you’re paying for auto insurance. To keep the cost of your auto insurance low, work hard to improve your credit rating. Consider ordering a free annual credit report to determine exactly what your current credit rating is. Once you do, take the necessary steps to address any shortfalls and improve your credit. Doing so may lead to a noticeable decrease in your auto insurance premium in a relatively short period.
If your monthly car insurance payment is hurting your budget, don’t worry. You can take steps to maintain the insurance coverage you need while keeping your auto insurance costs low at the same time. So, consider the tips discussed here, and start working to lower your auto insurance premium today.