By law you have to have auto insurance, but you don’t have to overpay for it. If you are shopping for auto insurance on a budget, here are 10 tips on how to save money.
1. Shop around. The cost of car insurance can vary widely from one company to another so obtain at least three quotes before you choose a policy. You can get price information by calling auto insurance companies directly and on the Internet.
2. Don’t buy more auto insurance than your need. For example, if you drive an older model car with a low Kelley Blue Book value (perhaps less than $1,000), consider dropping collision insurance.
3. Increase the deductible on your auto insurance policy when buying auto insurance on a budget. Raising the deductible from $250 to $500 might save you 10% or more.
4. Be sure that you get all the discounts you deserve. Most auto insurance companies offer numerous discounts, some of which may be news to you. For example, you might be eligible for discounts for participating in a low-risk occupation, being a member of a professional organization, having certain safety features (such as anti-lock brakes) on your car, being a senior citizen and/or having taken a defensive driving course. Also, ask the human resources department at your company whether your employer offers group auto insurance discounts. Discounts can be a source of meaningful savings when you are shopping for cheap car insurance.
5. Combine coverage. You can usually save money by purchasing multiple policies, such as both your homeowner’s and auto insurance policies, from the same company.
6. If you are shopping for cheap auto insurance when your existing policy is about to expire, be sure to take into account any renewal discount that is offered by your auto insurance company when making price comparisons.
7. If you don’t put a lot of miles on your car each year, you may be able to save money when you are shopping for cheap auto insurance. Be sure to ask about a low-mileage discount and also investigate premiums on low-mileage auto insurance policies (sometimes called pay-as-you-go policies) if they are offered in your state. Premiums on these policies may be based on a specified range of miles driven, actual miles driven, or other variations (sometimes including hours driven and driving style). It is difficult to calculate precisely the potential savings from choosing a low-mileage auto insurance policy, since they will depend on a variety of factors, including individual driving patterns. However, one large insurance company that offers low-mileage auto policies claims that customers choosing this option have saved 13% to 54% on their premiums.
8. Be sure your credit rating is in good shape before shopping for car insurance, because the auto company will take it into account in pricing your policy.
9. Maintain a good driving record. Most auto insurance companies offer discounts for having clean driving record for a defined period, usually three years.
10. Forego extras like towing, car rental coverage, and loss of income that can drive up the cost of your auto insurance policy.
While saving money on auto insurance is important, if possible, don’t make price the only criteria for choosing a particular company. Talk to friends and family for recommendations and feedback as well.
www.edmunds.com, How to Save Money on Auto Insurance – Edmunds.com
pueblo.gsa.gov, FCIC: Nine Ways to Lower Your Auto Insurance Costs
www.ohmygov.com, Is pay-as-you-go car insurance a viable alternative?