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Getting your own car is always exciting, but all that excitement is quickly overshadowed by how much you’ll need to spend to insure your new car. Insurance seems like a huge hassle, but it is necessary to drive safely and legally.
Whether you’re getting your own insurance plan, or setting up insurance for your new teen driver, there are several ways you can save on your monthly premium.
1. Shop Around
As with most things, it’s better to shop around to get a range of prices from different companies than to settle for the first quote you get. According to Nerd Wallet, good drivers who shop around for the lowest price save an average of $100 on their insurance plans.
2. Ask About Discounts
Many insurance carriers offer a variety of discounts on their insurance premiums based on your age, credit score, and what kind of driver you are. Ask your insurance carrier what discounts they offer and do some research to find out what you could qualify for.
If you’re trying to add your teen to your insurance plan, some carriers even offer a good grades discount. This awesome deal reduces the rate of your teen’s premium if they get and maintain good grades!
You can also get another discount by bundling your auto insurance with another insurance plan through the same carrier, such as home or renter’s insurance.
3. Reduce any Unneeded Coverage
Depending on the type of vehicle you have, you may be paying for coverage that you don’t need. Look at your coverage and compare it to the total value of your vehicle. If your annual insurance costs or deductible are higher than your car’s value, it’s time to drop some coverage.
Be sure you’re keeping the minimum required coverage for bodily injury and other vehicles, but if your vehicle is older, you don’t need to spend the extra money to cover the car itself and can save a lot of money on your insurance costs.
4. Increase Your Deductible
After you adjust your coverage, you can drop your monthly premium even more by increasing your deductible. The average car insurance deductible is between $500-$1000, but you should base your deductible on what you can afford.
If you have a safe driving record, increasing your deductible can be a great way to reduce your premium while still keeping you covered for serious repairs after an accident.
5. Consider a Usage-Based Plan
If you have a short daily commute or don’t drive much at all, consider a usage or mileage-based plan rather than standard coverage. You’ll need to estimate the miles you drive daily, and your rates will be adjusted and potentially lowered if you don’t use your car too much.
This is also a great option if you have a vehicle that you don’t use year-round to lower your rates when you are driving and avoid paying for the time your car is parked.
6. Work on Your Credit
Your credit score does come into consideration when insurance companies are calculating your auto insurance rates. If you don’t have great credit, working to improve it can make a significant difference in your premium later down the road.
There are many free tools available to help you improve your credit score. Look around and test a couple out to find the one that works best for you!
7. Compare Prices Once a Year
One way to save on car insurance that is often overlooked is comparing plan prices annually. Many vehicle owners find an insurance plan and stick with it for as long as possible, because it’s easier to simply renew your plan each year than it is to shop around and change plans or carriers every year.
That being said, there is an advantage of switching to a new provider for a lower rate if possible, because insurance companies are constantly competing with one another to offer better deals to try getting more customers.
However, many companies also offer loyalty programs with deals for customers who stay with them for a number of years. Look into what your current provider offers for loyalty programs and weigh the pros and cons of switching to a different company. You might be surprised at how much you could save!
8. Pay Semi-Annually
Another great way to save on your insurance costs is to pay semi-annually rather than monthly. Most often, companies offer a slight discount as an incentive to pay your premium only twice a year. You will be paying a larger amount every six months versus the smaller monthly payment, but it will still come out to a smaller annual premium.
9. Consider How Expensive Your Vehicle is to Cover
Some vehicles are, by nature, more expensive to cover and will increase your insurance rates more than others. Vehicle brands that are considered luxury or are more expensive to maintain and repair have a higher insurance cost than a more affordable, reliable vehicle.
According to Mark Vallet of Insure.com, the most expensive vehicles to insure in 2020 were from Mercedes, Audi, Nissan, and BMW. All considered higher end or foreign brands, owning one of these makes on average costs $3,900-$4,000 a year versus the much lower average of $1,300 annually from brands like Mazda, Honda, Wrangler, and Subaru.
Insure.com offers a great tool for calculating the average cost of insuring different vehicles to help you compare costs, but there are many other resources out there to help you find out how much different makes and models will cost to insure.
10. Drive Safely
Finally, the most important tip on this list is to drive safely! Comparatively, driving safely and keeping a clean driving record can have the biggest effect on your insurance rates.
Not only will being a safe driver help reduce your overall insurance costs, but many insurance companies offer further discounts for continuing to drive safe while you’re under their coverage. Often these discounts involve using an app or vehicle plug-in to monitor your driving behavior, but they’re a great option to save some money.
Conclusion
Paying a lot for your car insurance may seem like a painful fact of life, but there are always ways to save money on your insurance. Shop around and follow some of these simple tips to decrease your rates and save money.
Most importantly, be a life-long safe driver to continuously improve your rates and keep everyone on the road safe!
Disclaimer:
This article is meant for informational purposes only and should not be taken as medical advice. If you are experiencing anxiety or other mental health symptoms, you should speak to a medical professional.
Legal Disclaimer
The information in this article is meant for educational purposes only. It is not legal advice and should not be taken as such. Pass Drivers Ed is not responsible for any legal issues that may arise from following the information provided.
Getting your own car is always exciting, but all that excitement is quickly overshadowed by how much you’ll need to spend to insure your new car. Insurance seems like a huge hassle, but it is necessary to drive safely and legally.
Whether you’re getting your own insurance plan, or setting up insurance for your new teen driver, there are several ways you can save on your monthly premium.
1. Shop Around
As with most things, it’s better to shop around to get a range of prices from different companies than to settle for the first quote you get. According to Nerd Wallet, good drivers who shop around for the lowest price save an average of $100 on their insurance plans.
2. Ask About Discounts
Many insurance carriers offer a variety of discounts on their insurance premiums based on your age, credit score, and what kind of driver you are. Ask your insurance carrier what discounts they offer and do some research to find out what you could qualify for.
If you’re trying to add your teen to your insurance plan, some carriers even offer a good grades discount. This awesome deal reduces the rate of your teen’s premium if they get and maintain good grades!
You can also get another discount by bundling your auto insurance with another insurance plan through the same carrier, such as home or renter’s insurance.
3. Reduce any Unneeded Coverage
Depending on the type of vehicle you have, you may be paying for coverage that you don’t need. Look at your coverage and compare it to the total value of your vehicle. If your annual insurance costs or deductible are higher than your car’s value, it’s time to drop some coverage.
Be sure you’re keeping the minimum required coverage for bodily injury and other vehicles, but if your vehicle is older, you don’t need to spend the extra money to cover the car itself and can save a lot of money on your insurance costs.
4. Increase Your Deductible
After you adjust your coverage, you can drop your monthly premium even more by increasing your deductible. The average car insurance deductible is between $500-$1000, but you should base your deductible on what you can afford.
If you have a safe driving record, increasing your deductible can be a great way to reduce your premium while still keeping you covered for serious repairs after an accident.
5. Consider a Usage-Based Plan
If you have a short daily commute or don’t drive much at all, consider a usage or mileage-based plan rather than standard coverage. You’ll need to estimate the miles you drive daily, and your rates will be adjusted and potentially lowered if you don’t use your car too much.
This is also a great option if you have a vehicle that you don’t use year-round to lower your rates when you are driving and avoid paying for the time your car is parked.
6. Work on Your Credit
Your credit score does come into consideration when insurance companies are calculating your auto insurance rates. If you don’t have great credit, working to improve it can make a significant difference in your premium later down the road.
There are many free tools available to help you improve your credit score. Look around and test a couple out to find the one that works best for you!
7. Compare Prices Once a Year
One way to save on car insurance that is often overlooked is comparing plan prices annually. Many vehicle owners find an insurance plan and stick with it for as long as possible, because it’s easier to simply renew your plan each year than it is to shop around and change plans or carriers every year.
That being said, there is an advantage of switching to a new provider for a lower rate if possible, because insurance companies are constantly competing with one another to offer better deals to try getting more customers.
However, many companies also offer loyalty programs with deals for customers who stay with them for a number of years. Look into what your current provider offers for loyalty programs and weigh the pros and cons of switching to a different company. You might be surprised at how much you could save!
8. Pay Semi-Annually
Another great way to save on your insurance costs is to pay semi-annually rather than monthly. Most often, companies offer a slight discount as an incentive to pay your premium only twice a year. You will be paying a larger amount every six months versus the smaller monthly payment, but it will still come out to a smaller annual premium.
9. Consider How Expensive Your Vehicle is to Cover
Some vehicles are, by nature, more expensive to cover and will increase your insurance rates more than others. Vehicle brands that are considered luxury or are more expensive to maintain and repair have a higher insurance cost than a more affordable, reliable vehicle.
According to Mark Vallet of Insure.com, the most expensive vehicles to insure in 2020 were from Mercedes, Audi, Nissan, and BMW. All considered higher end or foreign brands, owning one of these makes on average costs $3,900-$4,000 a year versus the much lower average of $1,300 annually from brands like Mazda, Honda, Wrangler, and Subaru.
Insure.com offers a great tool for calculating the average cost of insuring different vehicles to help you compare costs, but there are many other resources out there to help you find out how much different makes and models will cost to insure.
10. Drive Safely
Finally, the most important tip on this list is to drive safely! Comparatively, driving safely and keeping a clean driving record can have the biggest effect on your insurance rates.
Not only will being a safe driver help reduce your overall insurance costs, but many insurance companies offer further discounts for continuing to drive safe while you’re under their coverage. Often these discounts involve using an app or vehicle plug-in to monitor your driving behavior, but they’re a great option to save some money.
Conclusion
Paying a lot for your car insurance may seem like a painful fact of life, but there are always ways to save money on your insurance. Shop around and follow some of these simple tips to decrease your rates and save money.
Most importantly, be a life-long safe driver to continuously improve your rates and keep everyone on the road safe!
Disclaimer:
This article is meant for informational purposes only and should not be taken as medical advice. If you are experiencing anxiety or other mental health symptoms, you should speak to a medical professional.
Legal Disclaimer
The information in this article is meant for educational purposes only. It is not legal advice and should not be taken as such. Pass Drivers Ed is not responsible for any legal issues that may arise from following the information provided.
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