You need to have the right car insurance for your circumstances, and that means coverage can vary. If you’re shopping for car insurance for the first time, your premiums are going to be different compared to someone who has been insured for years and has an excellent history. In either case, there are several things you can do to make sure you save money on auto insurance.
Always Shop Around
Every single car insurance company has different rates, and they all each have various policies. You won’t find identical coverage for the same price, so it pays to check out many different companies. Some insurance companies sell through independent agents, and others are strictly over the phone or online. Others are local versus the more prominent national companies, so shop car insurance companies to find out what they offer.
The larger companies don’t always have the best rates, but the smaller companies don’t always have the resources to back up their policies. When you start shopping around, you want to compare what you’re looking for to their history because you want to work with a reputable company. Take the time to talk to the companies and ask questions to get the answers you need.
Check Coverage Before Buying a Car
Most of the time, people go to a dealership or purchase a car from a private seller before getting insurance. They make the call to the insurance company once they’ve decided to buy the vehicle, and it’s all part of the process. Truthfully, that’s not the best way to go about getting insurance information for a car.
Ideally, you want to have an idea of the car you’re interested in before purchasing it. Depending on the make, model, and additional features, you may qualify for lower rates that you didn’t even know about. You should also ask your insurance company if they prefer certain perks like anti-theft devices or alarms that could lower premiums.
Consider the Deductible
As you shop around and compare coverage, you’ll want to also talk to the insurance companies about the deductible. There’s a balancing act in finding a deductible that you are okay with paying when needed and having a monthly premium that is also affordable. As your deductible goes up, your premium goes down. When your deductible goes down, your premium goes up.
While a lower premium looks attractive with a higher deductible, you need to be realistic. If you purchase insurance with a $4,000 deductible, you need to be prepared to pay that if you ever have to file a claim. On the other hand, if you have a $250 deductible, your premium will go up, but budgeting for the extra expense may be easier than saving up to cover a higher deductible.
Think About Bundling Multiple Policies
One of the best ways to get excellent rates is to ask about bundling. To bundle coverage means you’re purchasing insurance for multiple cars, homes, boats, or motorcycles, all under a single insurance company. Insurance companies like to offer bulk rates because they know they’ll get more of your business going that route.
Before deciding to bundle with a new company, you will also want to discuss options with any current insurance companies. You may get better choices for existing customers if you talk to them first. Asking people on social media for feedback on bundled policies can also give you a sense of direction.
Ask About Discounts
Insurance companies have a variety of discounts beyond multi-policy discounts. Many also offer student discounts for young drivers that can maintain a pre-determined grade average. College students can also sometimes get deals.
If you’re an excellent driver, you might also be able to get good driver discounts. Certain policies are based on driver behavior, so having a device that monitors your driving habits can result in lower premiums, too. If you’re not going to be doing a lot of driving, you might also qualify for a discount based on expected mileage.
Keep Tabs on Your Credit History
Credit history can have a significant impact on your insurance quotes. If you have a strong credit score, you’re likely to get lower rates. There is a correlation between people that have solid credit history and the number of claims they make. By comparing your credit to your projected claims, insurance companies can give an estimate based on what they believe they will encounter having you as a customer.
If you are younger or don’t have an established credit history, you can expect to pay higher premiums. To build your credit score if you don’t currently have a history, consider a secured credit card to get you started. After proving yourself over time, you can also ensure lower premiums as you maintain a healthy credit score. Check it regularly to look for changes or fraudulent activity to get it taken care of quickly if it happens.
The Bottom Line on Saving Money on Auto Insurance
Auto insurance should be an expected responsibility when you have a car because it protects you in the event of an accident. To get the lowest rates, always shop around and get at least 3-5 different quotes. If you can, look into the coverage policies before purchasing a car to give you an idea of what you should look for according to the insurance company. Think about the deductible you can afford to pay and how it relates to the monthly payment you need to cover every month. Ask about multi-policy possibilities, and always ask about discounts. Finally, keep up with your credit history to ensure that you’ll be able to get the lowest available insurance rates when everything is taken into consideration.