Car insurance is just a fact of life for an automobile owner. In all but two American states, drivers are required by law to carry a car insurance policy, and typical fines for driving without insurance can vary anywhere from $75 to $5,000 depending on where you live. If following an accident your case should happen to go to court, then who knows what the penalties could be.
For these reasons and a whole lot more, it’s crucially important for drivers to purchase car insurance coverage and to keep those policies updated. But how expensive is car insurance? According to most estimates, typical car insurance premiums cost drivers anywhere from about $133 a month, or around $1,500 a year, to about $3,000 a year for drivers with a DUI on their record.
If that sounds like a lot, don’t despair. While some car insurance expense is a necessity for any responsible driver, there are tricks for getting cheaper car insurance, with five of the very best tips revealed in this article. To begin saving money on car insurance, just keep reading.
5 Tricks For Getting Cheaper Car Insurance
From driving safely to the kind of car you drive, here are five ways to enjoy lower auto insurance premiums.
1. Drive Safely
Ok, this first one might sound like a no-brainer, but the absolute best way to lower your car insurance premiums is to drive safely. According to most estimates, how much car insurance will increase after an accident will be as much as 50% more than you would typically pay, while safe driver discounts take as much as 23% off your yearly premiums. It’s plain to see, maintaining a safe driving record is clearly worth it.
Following all the rules of the road and minimizing distraction while driving are two of the best ways to stay safe while driving, but many also take a defensive driving course either to cut down on the risk of an accident or to take steps to clean up their record following a mistake. To realize those savings, though, drivers have to alert their car insurance company they’ll be participating in a defensive driving course.
2. Repair Your Credit
Yes, a large part of your monthly car insurance premium will be based on your driving record: More accidents mean more money paid in car insurance. What’s also true, though, is your monthly car insurance premiums also have a lot to do with your credit rating: The better the credit rating, the better your monthly premiums will be.
For this reason, it’s a good idea to take steps to repair your credit rating before shopping for car insurance. Paying bills on time, managing your credit utilization ratio (CUR), and checking your credit score for any errors or discrepancies are only some of the most common means by which credit ratings can improve.
Also recommended: check your credit score early on from one of the three major credit reporting bureaus, and the car insurance company may even offer a free credit report using FreeCreditReport.com. Be sure to ask about that service before purchasing a policy.
3. Pick the Right Automobile
If you’re inheriting Uncle Joe’s old sedan from the `90s to get back and forth from work, you may not have much choice in the vehicle you’re driving, and guess what — you’ll have to insure it to stay on the right side of the law, almost anywhere you live. If you are in the market for a car, however, the kind of car you drive, and even the number of cars you insure can make a big difference.
To feel confident the type of car you choose will be cheap to insure, look for the following:
- Pick a hybrid. Choose an alternative fuel vehicle, and some car insurance companies will offer as much as a 5% discount on your monthly premiums.
- The smaller the better. Always dreamed of driving a Ford F150? You are free to do so, of course, but just be aware that when it comes to car insurance, the bigger the car, the more expensive the car insurance policy will be.
As previously mentioned, it’s also cheaper to put two cars on one policy, with the following stipulations:
- All drivers must live at the same residence.
- Everyone on the policy must be related by blood or marriage.
It’s sometimes possible for non-related drivers to take advantage of a multi-car policy so long as they are co-owners of all the vehicles included in the coverage. And multiple vehicles aren’t the only things that can be bundled into the same policy, either. Also a homeowner? Carry both car and homeowner’s insurance from the same company, for example, and save on both.
4. Shop Around for the Best Policy
To get the best deal possible on your car insurance, it’s important to shop around rather than to simply accept the first policy offered to you. Don’t let the insurance company sell you more coverage than you need. For example, if the vehicle you drive is on its way out and relied upon simply to get across town for work, then just carry liability rather than ponying up for much more expensive comprehensive coverage.
Furthermore, don’t accept a policy without first inquiring about the following:
- Pay-as-you-go insurance. This type of program means the insurance company installs a device in your car to track how much you’re actually on the road, only charging you for what you drive — drive less, save more.
- Ask about a good student discount. Insuring your teen or college student’s first automobile? Good grades could save as much as 10% on your monthly premiums!
- Pay your annual premiums all at once, or in a six-month chunk, and many companies will offer you a bulk discount.
- Utilizing e-billing and other kinds of electronic record keeping and communication between you and the insurance company lowers the overhead of the insurance providers, thereby lowering your premiums.
And last, it really can be worth it to speak directly with a real-life insurance agent or representative of an insurance company before accepting a policy. An actual person may be able to offer savings for you that aren’t readily apparent from an online-only application.
5. Research Organizations that Offer Car Insurance Discounts
Did you know that simply belonging to certain organizations can save you money on your car insurance? Here are just a few examples of well-known organizations that offer the best discounts on car insurance, and the savings you may enjoy, simply by joining.
- USAA. Active and current members of the military can often enjoy car insurance savings with their USAA membership.
- Costco. That’s right Costco is for more than just a lifetime’s supply of mayo. Purchase a car insurance policy from Ameriprise, and costco members enjoy as much as $500 a year on their car coverage. Don’t forget to include the Costco membership fees in that total, but at only $60 to $120 a year, taking advantage of a Costco membership for a deal on car insurance is clearly still worth it.
- AARP. Through an AARP membership, those over 50 who belong to AARP enjoy cheaper car insurance plus a whole host of other useful benefits and discounts via AARP’s partnership with The Hartford.
- Professional organizations. From firefighters to teachers, it’s also common that any number of professional organizations offer car insurance discounts as a perk of membership, sometimes equalling as much as 20% off your monthly tab!
Finally, there are government employee discounts and even possibly alumni or fraternal organization discounts available, and although AAA is seldom the most affordable life insurance provider, they do offer car insurance with premium support and customer service, not to mention a number of other useful services for the average driver like roadside assistance.
5 Tricks For Getting Cheaper Car Insurance: Conclusion
For drivers everywhere, car insurance is a must-have, and in fact, it’s required by law in nearly every state. Furthermore, the penalties, fees, and expenses incurred by driving without insurance make it more than worthwhile to carry a policy.
Although car insurance is a necessity, paying a lot for your policy is far from a foregone conclusion. In this article, we presented 5 of the best ways to save money on your car insurance:
- Drive safely. The safer the driver the better the car insurance, while simply driving less will also save money on your policy.
- Repair your credit. Clean driving records aren’t the only thing factored into your monthly car insurance premium. Your credit score also plays a big part in how much a car insurance company will charge you for your policy.
- Pick the right automobile. Smaller cars running on alternative fuels are much cheaper to insure than large trucks running on fossil fuels. Furthermore, if your car is not much longer for the world, it’s important not to pay for more insurance than you need. In other words, if your ride is a hand-me-down beater, you might as well just carry liability.
- Shop around for the best policy. Car insurance rates differ between companies, and sometimes even depending on where you live. Furthermore, many companies offer discounts and deals on monthly premiums so be sure to ask before accepting the first price offered.
- Research organizations that offer car insurance discounts. From where you work to where you went to college, and from where you shop to how old you are, joining certain organizations or belonging to a number of membership programs from a variety of organizations can help you realize savings on your monthly car insurance premiums.
With this guide, we hope your car insurance bill will be just a little bit more affordable. Consult Expensivity’s “Complete Guide to Car Insurance” for more information.