Skip to main content

Six Ways To Reduce Your Car Insurance Premium in Less Than a Year

We all want to save money on car insurance. If you’re looking for ways to cut costs, have you considered an attempt at lowering your premium? You might assume that your premium is set in stone, and there's nothing you can do about it. The truth is, you’re not as powerless as you may think.

Part of the solution is understanding how premiums are calculated, what insurers consider to be higher risks, and adapt your behavior accordingly. Other approaches are relatively simple takes on consumer smarts that you probably already use in your everyday life. You don’t need to become an expert on the insurance industry, but a little effort can go a long way when it comes to spending less money on car insurance.

We’ve been digging into the industry to give you a head start. Adopt a few of these measures, take a smart approach to your auto insurance, and within a year you can see some great changes to your premiums.


1. See What’s Out There


The obvious way to save on your insurance premiums is to shop around for the best deal. If you’re not happy with your current provider, take the time to research other options. Get quotes from as many companies as possible. Insurance companies look at your credit score when preparing your quote, but these are soft inquiries. Unlike hard inquiries, they won’t lower your credit score. You have nothing to lose and everything to gain by shopping around.

Every insurer’s website will make it sound like that company is the best. That’s why it’s important to be discerning when looking at online information. Along with getting quotes, it’s wise to do some research on the provider. Look up the company on the Better Business Bureau to see complaints from past customers. The tried-and-true method of asking friends and family members for recommendations works too. Failing that, you can look for consumer reviews online.

2. Check Your Credit Score


A great credit score is necessary to make progress in the modern world. If your credit is suffering, you’re most likely paying more than you should for car insurance. As we mentioned, insurers use a customer’s credit score to determine their premium costs. Research has shown that people with good credit are less likely to file insurance claims.

Fixing bad credit can be a struggle, but it’s worth it. The time will pass either way, so make sure that everything you’re doing can help improve your future credit. Even if you’re already quite responsible, it’s still wise to check your credit report often. Mistakes happen, but if you can correct them quickly, they’ll be less likely to affect your premium.

If you’ve recently improved your credit, congratulations! You’ve accomplished something great. Now is the time to get quotes and ensure that you can save as much as possible.

3. Be Protective


Providers determine premiums based on many factors. One of them is the likelihood that your car will end up stolen. Your insurance company might be willing to lower your premium if you install an anti-theft device in the vehicle. The level of discount is often determined by the type of device you have. Immobilizers are extremely attractive to insurers because they actively disable the vehicle, therefore unless the thief has access to a transporter, your car’s going nowhere. Many insurers also look favorably upon GPS trackers, as these can assist in the recovery of the vehicle following a theft.

Likewise, you also may be able to get a discount for demonstrating that you’re a safe driver. It is common for insurers to lower your premium after you’ve gone a certain amount of time without filing any claims. While you can’t control the behavior of other drivers, you can make yourself a more attractive risk to insurers by putting effort into improving your own abilities. Most policy providers will provide discounts to drivers who have completed a state-approved defensive driving course. Often there are options to take a purely online course, but it is best to check with your insurer what their requirements are before booking lessons.

4. Drive Less Often


This option isn’t for everyone. If you work from home or otherwise don’t get out much, take advantage of the low-mileage discounts offered by many providers. Less time on the road means less risk of an accident or theft. Your premium should reflect the number of miles driven in a year. The threshold for a low-mileage discount can vary, but usually this clocks in at less than 7,500 miles per year. It may be the case that you’ve spent years only taking occasional journeys, but your carrier will not be aware of you average driving distances unless you let them know. Give them a call to discuss your usage, and inquire about the possibility of this discount.

5. Consider a Higher Deductible


This idea might seem counter intuitive at first, but by requesting a higher deductible, you can often save on your premium. You’ll be taking a risk that could result in owing more in the event of an accident. It’s also possible that you’ll never have an accident at all. This is really a case of spending some time carefully assessing the amount of risk you’re comfortable with. Look at the crime rates in any areas your car is usually parked for significant periods of time. Do you tend to drive on roads with higher accident rates? Honestly assess your own driving skill too — are you confident that you behave in a risk-averse manner? If you feel that there is a markedly lower chance of you making a claim, it may be time to raise that deductible.

6. Drop Full Coverage


There's a misconception that it's best to keep all vehicles insured with a full-coverage policy. This isn’t always true. If you have an older car, you could consider switching to the minimum amount of liability coverage required by your state. When the value of the car is so low that it will be totaled in the event of an accident, a full-coverage policy is unlikely to be worth the cost.

If you currently have a high-priced comprehensive policy, and are reluctant to take your coverage down to the minimum required liability, it’s worth considering a point in between these poles. Many insurers also offer collision cover as an option. This doesn’t go as far as your full fire and theft cover, but it protects you in the case of damage caused by collisions with other vehicles and objects. It also provides cover for damage caused by hitting potholes.

As you can see, it’s possible to lower your insurance premium. The more you can improve your financial situation and track record in life, the more benefits you’ll receive. Insurance companies want to work with responsible, safe drivers who create as little risk as possible. Be on your best behavior and stay safe on the road, and if you don’t like your current insurance provider, don’t be afraid to look elsewhere.


Comments

Popular posts from this blog

Low interest credit cards - how to make them work for you

Credit cards are borrowing instruments, unlike debit cards where you already have the money. Banks are there to make money too. Just like high street stores, they hope to maximise their profits within the rules. So it’s important to understand the basics and find a credit card that’s right for you – you can compare low APR credit cards here . Now you know the rules, let’s find out how to play the game. The financial services industry charges interest on the money that it lends out. Let us assume you borrow £100 on your credit card and keep it for exactly one year before you pay it back. For the purposes of this article, we will assume your loan attracts 8% interest per year, which is the Annual Percentage Rate, or APR for that particular transaction. Practical example

Why it’s important to save for retirement

While retirement may seem far off in the distance for some, financial experts say you’re never too young to begin saving.  In fact, the earlier you calculate your retirement needs and start building your nest egg, the easier it will be to create a viable plan for the future. Many experts advise you begin saving a percentage of your income for retirement as soon as possible, no matter how little the contribution may be, as it’s possible the Social Security benefits millions of people currently depend on may be in jeopardy.

How does a Prepaid Credit Card work?

Can They Really Be a Solution to Avoiding Credit Card Debt? When it comes to plastic, there are a lot of choices out there. Not only do you have the choice of credit card , debit card, or prepaid credit card, but you also get to decide which financial company you want to use as your card provider. Credit cards and debit cards are both risky. Credit cards can help put you deeper into debt, while debit cards give thieves and collectors access to your entire bank account. A growing number of people are finding that prepaid credit cards are becoming the best option. What Are Prepaid Credit Cards? Prepaid credit cards look and act just like a credit or debit card, except you put the money on the card before you make any purchases. You are only allowed to spend as much money as you have pre-loaded on the card, which means that you are not at risk of going into credit card debt from overspending. These cards also keep your money safe, because thieves will be limited to the amount that is on t

What are the Consequences of Overspending in Life?

How overspending can ruin your financial life? With today’s expenses and their prices, it can be very hard not to overspend. Still, that isn’t an excuse to stray out of your budget. You know why? It is because overspending can only lead to more problems than you think. Overspending can affect your whole life. With all the possible consequences, it may jump from one problem to another. Unpaid bills All the excessive shopping with your credit card can cause steep bills at the end of the month. If you keep on using your credit but don’t have enough money to pay for it in the end, then you’re surely in for a huge financial disaster. This will turn out to be missed payments, and missed payments will ruin your credit report. Missing out on payments will get your credit report marked for 7 years or more. And you can’t get rid of them by finishing them off. Credit report Overspending can cause a chain reaction of events. Once you get your bills due to overspending, it’s possible for you to mi

How to Make Your Title Loans Safe and Sound

Although title loans are tagged as risky, innumerable folks still use them for fulfilling their different financial obligations. Therefore, such loans are not completely bad because their significant use despite the risk factor says a lot of their pros. This makes it vital to discuss how these loans should be used so that the risk factor can be minimized up to a great extent. For those who are not aware of, the risk of title loans crop up in the form of consequences when you fail to pay back the loan. With such a failure, you are surely going to lose your car as well as decrease your credit score further.

Online Small Lenders and Grants For Women

In today’s world women are being more and more prominent. They are hard working mothers. Some are even working to support their entire family because they are single moms.  However the financial aspects of being a working women can be traumatic. Depending on the society you live you women may find it that they are not allowed to work or go to school.  Often times they are kept inside their homes to keep the household running smoothly. However most women find that they can be successful outside of the home and inside the home often doing both at the same time. They are working mothers who are often going to school to better themselves while working in the corporate field. For more information click here .

Money Moves: Imagine Playing Your Financial Life like a Chess Game

To say chess is a popular game would be a gross understatement. Chess, for at least 1500 years, has been considered to be not just a game, but a true test of intellect and character. One can learn a great many things about chess that can be applied to one’s life, not the least of which is one’s personal finance. Chess is a game that requires patience, foresight, and an ability to understand your opponent. Much like your personal finance, these qualities are required for you to come out on top in the end. Here are a few things you can take away from playing chess and use to improve your financial life: