When you have to contend with car payments and fuel costs, one of your top priorities should be to learn how to lower your car insurance premiums. You’ll learn more than 20 things that make car insurance cheaper, with advice on:
- How to lower car insurance rates
- How to lower insurance after speeding tickets
- How to keep cheap car insurance after an accident
- How to get the cheapest car insurance possible
Additionally, information on auto insurance tracking devices, as well as tips on how to get cheap car insurance at 18, are covered in the following sections. So, you do get the cheapest car insurance possible?
- Don’t Automatically Believe “Cheapest Insurance” ClaimsA lot of companies advertise super-low insurance rates, yet rates can vary widely, even between two different drivers with the same insurance company. A company that offers the cheapest rate to one driver could offer the most expensive rate to another. Sometimes the disparity is down to which part of the country you live in. In other cases, it could be down to your driving record.Reasons why the same company might offer widely different driving rates from applicant to applicant could include:
- The state in which the driver lives
- History of traffic infractions
- The type of vehicle in question
Certain companies have been found to offer higher rates to individual drivers based on predictive modeling, where a search into the applicant’s record indicates that he or she would be unlikely to change insurance providers. Fortunately, this tactic – typically referred to as “price optimization” – has been outlawed in 16 states.
In any case, drivers should shop around for the lowest insurance rates. According to a recent study by NerdWallet, there’s an $859 annual disparity between the average quote and the lowest actual rates.
- Get Multiple Quotes Before You ChooseInsurance companies differ in the rates they offer, regardless of your driving record or the kind of car that you drive. In fact, two drivers with identical profiles could easily score policies that are hundreds of dollars apart. Therefore, it’s wise to check with multiple insurance companies before you choose a policy.To find the lowest-priced insurance providers, check the online map for The National Association of Insurance Commissioners, which lists carriers state-by-state. From here, you can access consumer comparisons and info about each company, including customer complaints.
While people sometimes assume that low rates equal poor-quality insurance, this is often not the case. In fact, some of the most advantageous policies carry the lowest monthly premiums.
- Consider a Smaller, Local Insurance ProviderWhen it comes to auto insurance, a lot of motorists only think about the big names that advertise on billboards and television. A driver can often find less expensive insurance rates from a local provider in his or her hometown. A good example of such a company is David Pope Insurance, which has locations in the cities of Union and St. Clair, Missouri. Therefore, it’s best to compare rates between local and national insurance providers to find the lowest available quotes for drivers in your area.
- Ask About Insurance Rate DiscountsInsurance companies provide discount rates based on some variables. You can find out about these discounts by checking with agents from different insurance providers. Examples of things that can get you an insurance discount include:
- Bundled policies that combine car insurance with homeowner insurance
- Multiple cars on one policy
- A clean driving record
- Anti-theft safety features on your vehicle
- Upfront annual or biannual insurance payments
- Paperless billing
A lot of companies offer lower insurance rates to drivers with low annual mileage. If you only commute short distances to and from work, or if you carpool to work on a regular basis, share this information with an insurance agent to see if this could qualify you for a discounted rate. Some carriers will also offer discounts to applicants that opt for paperless billing, as this saves companies on overhead expenses.
Insurance companies are also known to offer discounts to veterans and members of select professions, including teachers and engineers. To find out if you qualify, ask each agent you speak with for a list of which groups receive such discounts if any.
Discounts are also often given to senior citizens and drivers of vehicle with anti-theft and high-tech safety features. Even if you’re under age 25, you can score a lower rate if you belong to a student honors program.
A word of warning – don’t confuse discounts for low rates. Some companies that offer significant discounts often charge higher than average insurance rates. As such, you’d still be paying more than most drivers for your insurance even after your monthly subtracts all the discounts.
- Improve Your CreditIn the eyes of insurance companies, applicants with poor credit are likelier to file insurance claims. Consequently, applicants with bad credit often have higher insurance rates. This doesn’t happen in the states of California, Massachusetts and Hawaii, where the law bars insurance providers from considering an applicant’s credit.Elsewhere, however, the principle often applies. With some insurance carriers, a bad credit score can double the rate that they’ll quote. Therefore, it’s wise to improve your credit to the best of your means and keep up with your balances and repayment plans. You can stay abreast of your credit progress more easily by checking your credit report on an annual basis.
- Don’t Allow Your Coverage to LapseIf you have gone without car insurance for any length of time, the lapse could be a blemish in the eyes of insurance companies. Even if the lapse is only brief, it could disqualify you from insurance discounts. Therefore, it’s best to avoid lapses in coverage. If you change carriers, don’t part with your current provider until your new policy goes into effect.
- Check the Insurance Rate on a Car Before You PurchaseDifferent insurance rates apply to different vehicles. The make and model of your car, van, truck or SUV could largely determine the amount that you’ll pay on your monthly premiums. While new and sporty cars are more costly to ensure than old cars, disparities are often common among comparative newer models. For example, the average insurance rate on a Toyota RAV4 is $201 higher than that of a Honda CR-V.
If you’ve settled on a shortlist of prospective cars for your next vehicle purchase, contact your insurance company to check the going insurance rate for each car. This way, you could end up netting huge savings on the overall costs of owning a vehicle.
- Skip Collision and Comprehensive Coverage on Older CarsIf the car you drive is old and used, it’s not likely worth a comprehensive coverage policy. Therefore you probably won’t need collision or comprehensive insurance for the car. Collision covers damage that occurs when someone crashes into your vehicle, while comprehensive covers damage caused by weather, the elements and vandalism. If you were to file a claim on a vehicle of such worth, you wouldn’t likely get much in return. In fact, it would probably be cheaper to replace the car with another used one.A rule of thumb to follow is this – if a year’s worth of comprehensive insurance exceeds the value of your car, the vehicle doesn’t merit a comprehensive policy. Since the average policyholder files one claim every 11 years, and only one total loss every 50 years, the risks are small anyway. Stick with liability coverage until you trade up for a newer, fancier car.
- Consider Higher DeductiblesIf you raise the deductibles on your insurance policy, you could lower the monthly premiums. According to a recent NerdWallet study of Californian and Floridian drivers, those who double their deductibles from $500 to $1,000 save an average of $200 annually on insurance premiums. Higher deductibles will result in higher out-of-pocket payments if you do ever file an insurance claim.
- Opt for a Low-Mileage, Usage-Based Plan With a Telematics DeviceIf your annual mileage is low, look for a usage-based insurance plan in which premiums depend on how much you drive. Under such a program, a telematics device will monitor your car and track the number of miles you drive during the average day. The majority of drivers who use this option tend to conserve their mileage and get discounted rates on their insurance. There are various usage-based plans that you could likely qualify for if you drive less than 10,000 miles each year.A word of caution about telematics devices – while the technology is made to track good driving behavior, it is now being equipped to track reckless driving as well. As such, a telematics device could cause your rates to increase if you drive irresponsibly.
- Avoid the Installment OptionSome drivers assume that it’s advantageous in the short term to make payments in installments. But carriers will often slap an extra fee on drivers who take this option. If your premiums are low in the first place, it’s probably not fiscally sound to pay an extra $10 or more for the installment-payment option. Try to make all payments in full if you wish to save money on your car insurance over the course of each year.
- Own Your CarTo select an insurance policy that best suits your needs as a driver, you need to your own vehicle. As long as you lease a car, your insurance policy is chosen by the leasing entity, not you. In these arrangements, insurance policies are often expensive.
When a leasing entity entrusts you with their vehicle, they’ll usually require that you have the most comprehensive insurance policy to ensure that no money gets taken out of their pocket in the event of an accident. Simply put, if you don’t own the car that you drive, you don’t get to choose the insurance policy.
If you skip the lease and secure a loan, you’ll still pay more for your insurance. Once again, the bank will own the car, which will require you to have the most comprehensive insurance policy available. Furthermore, by the time you’ve paid off such a loan, you’ll have paid a greater total amount than what the vehicle was ever worth. In the long run, there’s no money to be saved by leasing or getting a loan on a car.
- Try to Get Citations Expunged From Your RecordA seemingly minor driving infraction can add hundreds of dollars onto your annual insurance. Therefore, it’s imperative to do whatever it takes to have infractions removed from your record whenever possible. For example, if you get ticketed for driving solo in a carpool lane, you could request that the judge remove this from your record in return for paying the fine in full.Similar victimless infractions, such as failure to halt for a stop sign at a barren back-road intersection, can also be removed from your record if you comply with the court. However, because a judge agrees to remove something from your record, it doesn’t mean the infraction will disappear. If you still receive a higher quote due to a ticket that you thought you resolved, call back the court to re-explain the situation. Cases like these can often resolve in the driver’s advantage.
- Take a Defensive Driving ClassIn the minds of insurance carriers, one of the more compelling reasons to offer a lower quote is when an applicant has taken a defensive driving course. After all, the primary concern of insurance carriers is whether or not an applicant will be accident-prone and cost them money. If a driver has taken a defensive driving course, such concerns are alleviated.The logic goes as follows – if you’ve taken such a course, you’ve probably always been a safe driver, to begin with, because unsafe drivers are unlikely to take defensive driving courses. A defensive driving course can even help drivers under age 25 – the highest-risk group of drivers – secure lower-than-average rates for that age group.
- Shop for a Better Rate Each YearInsurance companies exist to make money. Companies often offer sweetheart promotions with unsustainably low rates to lure customers. Knowing that most drivers don’t wish to shop around continually, they’ll often charge for the convenience of staying with the same company for many years. In other words, they’ll slowly raise your premiums over time.If you make a point of shopping around for lower insurance rates each year, you could save hundreds of dollars over the long run. A new insurance policy could come at an especially opportune time if you reach one of the following milestones that often qualify people for lower rates:
- Purchasing a house
- Getting married
- Turning 25
- Passing three years since your last driving ticket
Mark your calendar once per year to compare three of the best insurance quotes offered in your area.
- Prepay Your Insurance as Much as PossibleThe dollar gets weaker by the year. Consequently, insurance companies make more money with upfront payments than with installments. The downside to the inflation factor is that you’ll often get charged extra fees for making your payments piecemeal. The upside here is that carriers often offer discounts if you agree to prepay your policy.If possible, try to prepay your premiums several months in advance. Some companies will allow you to pay up to six months in advance. While it might not always be financially possible, prepayments can reap long-term savings.
- Opt for an Older, Average CarDifferent insurance rates apply to different cars, and newer, fancier models typically get higher rates. If function over flash is your priority, stick to driving older cars. For example, a well-maintained, five-year-old compact car with 75,000 miles will easily get a lower insurance rate than a sports car built within the past few years.Whenever you’re in the market for a vehicle, consider the former option. You’ll save on the upfront cost of the car and you’ll also reap huge insurance savings in the long run.
- Tie the Knot With Your Significant OtherThe option might not be for everyone, but insurance companies are often more trusting of married drivers than single folks. The reasons for this favoritism are down to the following assumptions about married people, who carriers see as more likely to:
- Be settled and responsible
- Own homes and be more financially secure
- Have children – one of the greatest incentives for safe driving
The last of those points were particularly important. In the minds of insurance carriers, one of the greatest predictors of responsible driving is when a driver brings a child into a vehicle. A domestic partnership could also qualify you for a lower rate.
- Move out to the CountryAs cities get more clustered and congested, rural areas have increasingly become a cleaner, more sanitary and all around safer environment for people from all walks of life. As a driver, you’re less likely to have an accident if you live and work in a rural community because there is less traffic, cars and roadside dangers to be found in such areas. Since the roads are safer in rural areas, it’s easier to secure lower insurance rates with a rural address.
- Buy a HomeDrivers who’ve achieved security in their financial and domestic situations look much better to insurance carriers than people who live paycheck to paycheck. When you own a home, insurance carriers are more likely to view you as a financially solvent, responsible individual. Carriers see homeowners as more financially secure and trustworthy than renters. As a homeowner, carriers more readily assume that you’ll:
- Pay your premiums on time
- Never run out of money
- Be a responsible driver
While it’s true that homeownership is beyond the means of many drivers, insurance companies often view homeowners more favorably among incoming pools of applicants.
How to Lower Insurance After Speeding Tickets and Accidents
If you get ticketed for speeding, one of the easiest ways to avoid a rise in your insurance premiums is to change carriers. Likewise, a minor accident liability could signal that it’s time to change policies. On the upside, a ticket or accident fine could serve as a motivating factor in your annual search for a new policy.
If you haven’t been ticked yet, but wish to avoid premium hikes in the event of a speeding or collision fine, ask your insurance provider whether you can include a forgiveness clause in your policy. As long as you prove yourself as a safe, cautious driver overall, some carriers – knowing that most drivers get into accidents or get cited for speeding at some point – will forgive you for the first such incident. Just do your best to notice speed signs and pay attention to your speed meter as you drive.
As with fines for accidents, first-time speeding tickets are likelier to be forgiven by insurance carriers if you submit to a safe driving course. When you show this level of commitment, it sends the message to carriers that you’re not a reckless driver.
A word of warning about collision liability – never assume that the other party forgot the incident. Report collisions to your carrier immediately, no matter how minor or seemingly benign. You might think that the other party will brush things off, only to get slapped with a court order months later. This gives your insurance company no time to prepare for your defense and renders you irresponsible and untrustworthy in the eyes of the carrier.
Get Reliable Car Insurance Today
With more than 20 years of experience, David Pope Insurance has helped drivers from all walks of life secure affordable rates on their car insurance. If you live within a 25-30-mile radius of Union or St. Clair, Missouri, contact David Pope Insurance agents to request a low rate on your next car insurance policy.