Car insurance- 5 ways to save money

Posted On August 11, 2023August 21, 2023

Insurance costs continue to rise every year. Although this is the case, there are still ways to save money on your auto insurance. With a few simple strategies, you get the coverage you need at a price you afford.

Shop around for quotes 

The first step to take when looking to reduce your car insurance premium is to compare rates from multiple providers. Insurance companies use different formulas to calculate premiums, so the price varies widely between insurers for the same coverage. Spend time getting quotes from at least three to five different companies. Look at both large national insurers as well as smaller regional companies. Review the policy details closely to ensure you are comparing equivalent coverage. Going through this process annually helps ensure you always have the best available rate.

Raise your deductible 

Lowering your insurance premiums is as simple as raising your deductible. It is the amount you pay before insurance coverage kicks in when you file a claim. Many policies come with a $500 deductible, but you can reduce your monthly premiums by raising that deductible to $1,000 or even $2,500. Just be sure you have enough savings to cover the larger deductible amount in the event of an accident or claim. Also, avoid going with the minimum required deductible in your state.

Maintain good credit 

Auto insurance rates are heavily influenced by your credit score. Insurance companies view policyholders with poor credit as higher risk and charge them increased premiums.  Pay all bills on time, and only make purchases you afford to pay off each month. Keep credit card balances low. When you have good credit, you should qualify for discounted insurance rates.

Take advantage of discounts

Make sure to ask your provider about any discounts you qualify for. For example, you often get a price break for being a safe driver, maintaining continuous coverage, insuring multiple vehicles on one policy, or having safety equipment like airbags and anti-lock brakes installed in your car. Companies also offer discounts for paying your premium in full upfront, setting up automatic payments, taking a defensive driving course, being a member of certain organizations, and more. Every bit of savings helps. If you want extra information, visit Roojai.com.

Consider usage-based coverage

Some insurance providers now offer usage-based programs where you pay based on how many miles you drive. Tracking your driving habits is done through telematics programs. Insurance carriers provide a customized premium estimate based on your actual vehicle usage. This type of coverage works best for low-mileage drivers. Also, the insurance company tracks acceleration, braking, speed, and time of day while you drive. If you drive safely, you potentially save money with a usage-based program. But reckless driving could increase your rates.