Different companies offer different ways to save on car insurance. Many auto insurance companies adhere to different sets of guidelines when determining your policy premium. The best way to save on car insurance is to be well informed on the topic and discover which aspects of the policy you can take advantage of in order to get now and pay later auto insurance. In tough economic times, any place to save a buck or two is definitely important. Small savings can add up to create a more stable financial situation. Here are some things to look for with each individual policy that can save you money in the long run.
- See if the company offers a low mileage discount
Many companies will take into consideration the distance driven by the insured. The lower the mileage, the less of a chance that the driver will be involved in a costly accident; this often translates into a lower premium. In order to take advantage of this, it is wise to drive as little as possible. Companies will offer a discount for those who drive less than 10,000 miles a year. Many companies gauge the discount in intervals and are incredibly meticulous about mileage. In order to fit these requirements, find alternate forms of transportation. Carpool, take the bus or cut back on unnecessary trips when possible.
- Maintain good grades
While this may seem like an unrelated topic, one of the demographics with inflated premiums is younger drivers and students. Insurance companies believe their lack of inexperience in driving to be a high-risk factor and will likely charge them more for insurance. Students who maintain a B or better average may qualify for a good student discount in high school and college. The discount generally requires the student to provide the insurance company with proof of GPA annually.
- Take more courses
Better drivers receive better premiums. Many states offer defensive driving courses and a few other certifications that establish them as safe and educated drivers. Taking a defensive driving course can allow drivers to qualify for a discount if they’ve proven themselves to be a safe and defensive driver. Each state differs, but almost every state has a defensive driving course in some form or another, often translating into savings on car insurance.
- Be energy efficient
A few low-cost auto insurance companies offer drivers discounts for driving hybrids or other energy-efficient vehicles. Some companies that embrace the Green Movement will offer whopping discounts for utilizing fuel-efficient cars. If you’re thinking about purchasing a new car, check out some of the different companies and see if they provide discounts on energy-efficient vehicles before making your decision. The choice to switch to a more environmentally friendly vehicle can not only be better for Mother Earth but better for your wallet as well.
- Look into getting a multi-policy discount
Insurance companies are businesses that appreciate loyal customers as much as the next. Aside from car insurance, many companies offer insurance for other vehicles or properties as well. Homeowners or individuals with motorcycles or boats can benefit from these different areas of insurance. They may receive a discount from the company by bundling the auto insurance policy with homeowners insurance, for example.
- Switch to higher deductibles
The amount of money paid out of the driver’s pockets in the event of a collision, a deductible can decrease premiums. Drivers can save as much as 15-20% on their annual insurance on Comprehensive and Collision premiums by choosing a $500 or $1000 deductible. These advantages are especially useful on newer cars.
- Buy gap insurance
In the event that a driver damages their car beyond repair while still financing the vehicle, gap insurance will cover the loss of a new car that’s worth less than your outstanding balance. This is used to offset the instant drop in the value of a vehicle once it is purchased. This will cost a little more annually but can cover loan payments on new cars.
- Don’t let your policy lapse
You could pay 25% more for a new policy when you’re ready to buy one. Some insurers offer a transfer discount for people in these situations. Make sure to renew your policy in plenty of time so you won’t lose your old benefits and be subject to more signup fees.