Having car insurance is no doubt a smart move that provides you with peace of mind, knowing that you or your loved ones are covered. However, it doesn’t come cheap.
Nevertheless, if you’re like most people, you may have put in a lot of time researching and looking for your next car. And by the time of purchasing the car, you knew all the details including the tank capacity, safety, and security features, by heart.
The only thing you failed to factor in was the insurance costs. Getting an insurance quote for a car that you’ve already purchased can be a shocker, especially if you’re not prepared.
Here are some tips worth considering that can significantly cut costs on your car insurance:
1. Ask For Rebates
Most car insurance companies offer a variety of rebates, such as:
- Vehicle safety rebate
This is given if you’ve installed advanced safety features in your car, like antilock brakes or airbags.
- New car rebate
You can get it if the insured car is relatively new, less than three years old.
- Good driver rebate
You’ll be eligible for this discount if your driving record is commendable. For instance, if you’ve not been involved in a car accident for a reasonable period of time, say three years.
- Low mileage rebate
If you drive your car less frequently, you’ll be considered low risk and therefore qualify for a premium discount.
2. Increase Your Deductibles
A car insurance deductible is the out-of-pocket expenses you’ll shoulder in the event of an insurance claim. This means that if you file an insurance claim, you’ll be paid less than the amount of your deductible. For instance, if your insurance claim is USD$1,500 and your deductible is USD$500, your check out will be USD$1,000.
You get to choose your deductible when you purchase a policy. The higher the deductible, the lower the premium. You can save hundreds of dollars on car insurance depending on the amount of your deductible.
3. Bundle Insurance Policies
A bundling discount, also referred to as multi-policy discount, is given to policyholders if they purchase more than one policy from the same company. Insurance companies use this as a way to reward and retain their loyal customers.
The insurance company will give you discounts on your car premium if you, for instance, bundle your auto and home insurance. Another example is, if your household has more than one driver and more than one car and you bundle all the drivers and cars into one multi-policy package. This way, you’ll end up saving huge car insurance premiums.
4. Pay Your Premium In Full
Insurance companies let you pay for your car insurance premium in installments or all at once. Paying in installments will come with extra charges which may not seem much when broken down. But you’ll realize that you’ve saved a lot when you pay your car insurance upfront.
5. Consider Pay-Per-Mile Insurance
Pay-per-mile insurance is a usage-based insurance policy tailored for people who don’t drive far or frequently. With this type of cover, you’ll only be required to pay a base rate plus a small charge for every mile you drive. A tracking device is usually plugged into your car’s on-board diagnostic (OBD) II port to monitor your mileage.
6. Drop Add-Ons You Don’t Need
To save on costs, it would be prudent to go over your insurance policy document once in a while to see what products and add-ons you’re paying for.
For instance, you may be a member of the Australian Automobile Association (AAA) which already provides roadside assistance services in case you need towing services or need to change a flat tire or dead battery. However, if you’re also paying for the same services as add-ons, then it’s better to drop this particular option on your car insurance.
You may have also included gap insurance to shield you as you pay a loan or lease in case of car theft or your car being declared written off. If the unpaid amount is considerably small or you have attained positive equity, you should consider dropping this insurance.
In addition, buying a collision and comprehensive insurance for an old car may not be viable especially if you have high deductibles.
7. Shop Around
Car insurance keeps fluctuating every now and then. If you want to insure your own car or a commercial truck for your pick and pack business, look around and compare prices from several insurance companies before you choose one.
Car insurance companies use factors like age, driving history, or location to determine the rates they’ll charge. Different companies also vary in the way they calculate risks.
Shopping around before settling on your preferred insurance provider will be a sure way to save on costs. It also gives you the chance to check on the companies’ backgrounds. And if you’re already insured, you can change your insurer anytime if need be.
8. Consider Insurance Costs When Buying A Car
When researching your next car, don’t forget to factor in the insurance costs. For instance, cars with costly spare parts will attract higher insurance rates. On the other hand, cars with more advanced safety and security features will cost less to insure. Some insurers even offer rebates on hybrids or cars that use alternative fuel.
Make it a practice to review your coverage every time it’s due for renewal. This will help you to identify things that need to be changed or you no longer require.
It’ll also be to your advantage if you work with a reputable insurance broker. They’ll inform you when new products are on the market. Furthermore, they’ll also ensure that you’re updated with the lowest rates in town, so you’ll get the best coverage for the lowest price.