It doesn’t have to be tough to find a decent bargain on vehicle insurance. If you know how to do it correctly, it may be simple and quick. The trick is to grasp the principles of vehicle insurance and shop around for the best deal. We’ll walk you through a few easy steps to help you save money on your vehicle insurance policy without sacrificing coverage.
Learn how to locate low-cost auto insurance in ten simple steps by reading this tutorial.
1. Make a comparison.
Sure, it’s critical to compare vehicle insurance quotes from several providers, but don’t stop there. Insurance acts as a buffer between you and financial ruin, so use it wisely and cautiously.
You may already have the best bargain with your existing auto insurance provider. Your quest, on the other hand, may drive you to break up with your long-term partner and jump into the arms of a new vehicle insurance provider.
Comparison shopping can assist you in locating low-cost auto insurance providers and auto insurance reductions. In this competitive market, you can come across a new company that has emerged or lowered its pricing.
When your insurance is due for renewal, compare auto quotes every year. Consider it the equivalent of replacing your smoke alarm.
If any of the following situations arise, you should look into the rates:
- Buying a new or different vehicle
- Adding multiple vehicles to a multi-car insurance coverage
- A driver can be added or removed.
- Adding a teen driver to the mix
- Buying a house
- Review DUI insurance if you have been charged with a DUI or a major infraction.
- Credit score fluctuation
2. Bundle your insurance coverage
According to statistics, married people and homeowners submit less claims, resulting in lower vehicle insurance rates.
We don’t advise getting married solely to save money on vehicle insurance. Purchasing homes or renters insurance through your auto insurance company, on the other hand, can result in even greater savings.
It’s known as “bundling.” Depending on the organization, multi-policy savings can be as high as 30%.
Similarly, when you insure two or more vehicles with the same insurer, you can save up to 25% by taking advantage of a multi-car discount. This discount is usually applied to your liability, collision, and comprehensive insurance policies.
But be cautious; things don’t always go as planned. Before you sign on the dotted line, compare the cost of purchasing your policies separately to the cost of a bundled contract.
The following are the national averages for bundled policies:
- For auto and homes insurance, the rate is 11.4 percent.
- For vehicle and condo insurance, the rate is 9.6%.
- 5% for autos and 5% for rentals
- 2% for auto and life insurance
3. Increase the amount of money you’re willing to pay as a deductible.
The collision or comprehensive portion of your insurance might be reduced by simply increasing your deductible from $250 to $500. According to the Insurance Information Institute, certain providers can save you between 15 and 30 percent. If you increase it to $1,000, you can save much more, up to 40%.
However, keep in mind that a higher deductible means you’ll have to pay more out of pocket if you file a claim. If you have to pay your deductible with a high-interest credit card, even cheap insurance can become costly. (For more information, see How much can I save by hiking my deductibles?.)
4. Take advantage of all the discounts that you are eligible for.
Is Junior an excellent student? Most vehicle insurance providers provide a good student discount, which is available to both high school and college students. To qualify for this discount, a “good student” must maintain a “B” (3.0) or better average, and this normally applies to students under the age of 25.
What is the maximum amount of money you can save? The average base premium for student drivers is $6,110 per year. With an excellent student discount, that yearly policy rate drops to $5,750 on average. That’s a savings of $361, or roughly 7%. The good student discount is far larger than the majority of other discount categories.
Teen drivers who are homeschooled may also be qualified. They must pass standardized tests with a certain score. Bodily injury liability, property damage liability, personal injury protection (PIP), medical payments, collision, and comprehensive coverages are usually eligible for the reduction.
Similarly, most insurance companies provide discounts to good students who are away at college. The discount rate is influenced by a number of factors, including:
- Whether or if the kid drives to school and drives it on a regular basis
- Whose name(s) do you see on the title?
- Whether the student’s permanent abode is still the house of his or her parents
Have you persevered with your insurance company through thick and thin? It’s possible that your devotion will result in savings. Farmers, Geico, Nationwide, Allstate, and USAA are among the companies that provide this discount, which can save you up to 10%. State Farm has a loyalty rewards program that allows you to earn points by using your credit card.
Depending on your carrier, good driver and safe driver discounts might save you anywhere from 5% to 25%. A discount can be obtained by reducing the amount of time you spend driving your vehicle. More on both of these topics will be discussed later.
Have you put an alarm or security/anti-theft system in your vehicle, such as a LoJack? In some situations, you may be eligible for a “safety-feature discount” of up to 30%.
When compared to the more popular method of paying in installments, paying your annual bill in full can save you up to 10%. Going paperless can also save you money.
Understand all of the vehicle insurance discounts for which you may be eligible so that you can take advantage of some significant savings on your premium.
5. Purchase the “appropriate” vehicle
Perhaps you’re looking for a fun ride or one that can fit all of your children. You might want a vehicle that gets great gas mileage.
When you’re considering those details, keep in mind that your decision has an impact on whether you get lower (or higher) insurance prices. Automobiles that are less expensive to fix or replace have lower insurance costs.
Don’t believe the myth that “the cheaper the automobile, the cheaper the insurance.” That isn’t how it works.
Every year, our sister site Cover.com checks auto insurance prices for over 3,000 different vehicle types to determine which are the most affordable and which are the most expensive to insure. The Honda Odyssey minivan was named the least expensive 2019 vehicle to insure in a recent comparison, followed by the Jeep Wrangler and the Subaru Outback. Several Mercedes models were among the most expensive to insure for 2019, as well as the Nissan GT-R, which was the most expensive.
6. Drive safely to avoid tickets and accidents.
Even if you’re Sammy Hagar, you may drive 55, 65, or whatever the speed limit is. You can use greater caution and possibly prevent the fender-bender when you exit the convenience store parking lot.
A bad driving record can easily exclude you from receiving the best auto insurance rates. Insurers will look at your history to see if you pose a high risk. Accidents, speeding tickets, and drunk driving citations can all raise your insurance premiums.
As previously mentioned, these good driver discounts can save you up to 25%. A clean driving record for at least three years is normally required by the insurance carrier. That means no driving under the influence, moving offenses, or at-fault collisions. People, keep your hands firmly on the three and nine o’clock positions (and yes, it used to be two and 10).
If you drive carefully and wisely, you can save money on vehicle insurance by avoiding fees and getting a good driver discount. (For more information, see “How much would a traffic ticket influence my insurance rates?”)
7. Don’t buy insurance that you don’t need.
Reduce your automobile insurance expenses by removing comprehensive and collision coverage if you have an old beater.
Don’t let that coverage go without a second thought. When is the best time to switch to a lower-cost auto insurance policy? When the real cash value of your vehicle doesn’t justify the insurance cost, many experts suggest it’s time to cancel these coverages.
Rental reimbursement coverage is another sort of insurance that may be unnecessary. If you have an extra automobile in the house that you can use if yours is in the shop after an accident, you may skip this step.
If your family currently has a good health insurance plan, you may opt to skip personal injury protection or medical payment insurance (if your state doesn’t need it).
8. Purchase only the state-mandated minimum liability coverage.
Buying “bare bones” coverage is one approach to get the cheapest vehicle insurance. Liability insurance at the lowest legal limits allowed by your state to lawfully operate an automobile is the most common form of protection.
It pays for the property damage and medical expenditures of others if you cause an accident; that’s it.
30/60/25 is a common format for liability limits. The numbers in this example, which uses Texas’ minimum standards, show coverage that would pay:
- Medical bills of up to $30,000 per individual are possible.
- Medical bills of up to $60,000 can be incurred in the event of an accident.
- For property damage, you might be fined up to $25,000
In each state, below are the typical annual prices for the cheapest vehicle insurance coverage.
It’s usually not a good idea to go with state minimums, but if you don’t drive often and need to save money, barebones coverage may be an option.
9. Reduce the amount of time you spend driving.
Policyholders who drive fewer than a certain amount of miles per year, often 7,500 to 10,000 miles, may qualify for a discount on their base rates. Depending on the policy, the rate reduction is applied to bodily injury liabilities, personal injury protection (PIP), property damage liability, and collision premiums.
Car insurance firms frequently mandate that you install a small device in your vehicle that provides our mileage data to the company if you engage in this. You get discounts if you keep it under a particular amount.
“Driving less miles means you spend less time on the road, which means you’re less likely to get into an accident,” explains Janet Ruiz, director of strategic communications at the Insurance Information Institute. “Most insurers ask for yearly mileage to give drivers who drive less a cheaper cost.”
Hey, you could start bicycling more or join that carpool with your coworkers.
10. Inquire about group coverage.
Drivers who purchase insurance through a group plan from their job, professional, corporate, or alumni groups, other associations, or schools may qualify for discounts. The Insurance Information Institute recommends that you check with your linked groups to see what they have to offer.
Employers frequently offer group health insurance policies, but group vehicle insurance is a lesser-known option. Larger organizations are more likely to provide this option to their employees since their sheer size allows them to negotiate a group rate.
Large colleges or trade schools may offer group insurance to not just their students, but also their alumni. For example, City University of New York (CUNY) provides vehicle insurance, as well as house insurance, dining and travel discounts, and theater and movie tickets to its alumni.
As you can see from our list, there are numerous options for finding low-cost auto insurance. You can acquire an affordable vehicle insurance policy by completing your research and choosing the ideal plan for you.