6 Easy Ways to Lower Your Car Insurance Costs

6 Easy Ways to Lower Your Car Insurance Costs

Do you consider selling your car and taking public transport every time you pay your auto insurance bills? Do you feel that the rising gas prices and the astronomical insurance rates are compelling you to start using a bicycle for your commute? If yes, then your insurance rates are very high, and you are overpaying for it. Auto insurance is mandatory, and it is costly without a doubt. But most of the time, people overpay for their auto insurance policy and they are unaware of it!

So to help you ease the heavy weight of insurance bills, here are 6 easy ways to lower your car insurance costs. Follow these tips and you’ll be saving hundreds of dollars off your auto insurance expenditure while getting the same or even better coverage for your cars. 

Don’t Stick with the Same Company

Your current auto insurance company might have been wonderful for you back when you got the policy. But things change as times change, and so do the insurance rates and coverage. Why should you stick to one company if you can get better insurance coverage at a much better price? If you feel your insurance rates are too much, it’s time to pack your bags and look for a better insurance company.

Compare different insurance companies, look for better coverage, and the lowest-priced car insurance company that checks almost all the boxes for your needs. You can save as much as 45% of what you are paying now by making the switch without affecting your coverage. But before you make the switch, there are a few things you need to be careful about. 

Firstly, do not cancel your current policy before your new insurance policy is active. If you cancel your current policy and the new policy is not activated due to some issues, you might get an insurance “gap” which is a period when your car does not have coverage. Insurance companies do not like seeing this insurance gap and will charge you more. 

Secondly, look for no-claim bonuses in your current policy. If you have not made a single insurance claim during the policy period, you might get some discounts when you renew the policy. If after getting the discount the price is still higher than the price of the new policy, then switch. If not, then stay. 

Increase Deductibles, Lower Premium Rates

The faster way to reduce your insurance premium rates is by increasing your insurance deductibles. A deductible is an amount you’ll have to pay before the insurance company pays if you make an insurance claim. It is usually a percentage of your insurance coverage and you get to select how much your deductibles should be. 

Higher deductibles will reduce the premium rates, but you need to know that in an accident, you’ll have to pay from your pockets. Lowering deductibles will increase premium rates, but in an accident, your pockets don’t take too much damage. So the best way to reduce your insurance rates would be by increasing deductibles and driving carefully to avoid accidents.

Avoid Making Insurance Claims 

It might sound absurd at first and yes it does. If you get in an accident, not making an insurance claim just defeats the purpose of having an insurance policy in the first place. But hear us out. You should avoid making unnecessary insurance claims that will make you lose more money than saving. 

Let’s say you get rear-ended by someone and the cost of repairs come out to be $800. If your deductible is lower than this amount, say $500, then claiming your insurance makes no sense. You’ll have to pay $500 and the insurance company will pay $300. But that’s not all. 

Making an insurance claim will increase your insurance rates when you renew it. Not just that, even if you switch insurance companies, this insurance claim will be on the record. If your insurance company offers a no-claims bonus, then making a claim would also make you lose it. Is it worth the $300? 

The amount can be subjective. What we are saying is that when you think about making a claim, consider these two factors and then make a decision. If the cost of repairs is high, then make a claim. If not, then you are better off paying for the repairs yourself. 

Buy Cheaper Cars, Get Cheaper Insurance Rates

The cost and make of your car are direct factors in deciding your insurance rates. Expensive, foreign-made cars that cost more to repair also cost more to insure. So if you are planning on buying a new car for commuting, you should get a Ford or Honda than go for something expensive. Large SUVs such as the Jeep Wrangler, Tesla Model X, etc are very expensive to insure. 

Get Multiple-Car Insurance or Bundle Insurance Policies

If you own more than one car, then instead of choosing different insurance companies, you can get multiple car insurance policies from the same company. This is also called multiple-car insurance and insurance companies offer great discounts if you get these policies. 

If you don’t have multiple cars but want to get multiple insurance policies such as auto insurance, home insurance, etc, then getting it from the same company will also get you great discounts. This method is called “bundling” as you bundle different insurance policies together. Find the best insurance company that offers different policies at the best prices and you’d be saving as much as 25% on your insurance expenditure. 

Consider Pay-Per-Mile Insurance 

This auto insurance policy is strictly for people who don’t drive too much. Pay-per-mile insurance charges you based on how much you drive your car, i.e., your mileage. Your driving record, traffic violations, and other factors are used to calculate your per-mile rate, which is then multiplied by your mileage. This gives you the cost of your insurance. So for people who drive less than 600-800 miles a year, pay-per-mile insurance can save you hundreds of dollars.