7 Tips on How to Reduce Car Insurance Cost
If you want to get cheap car insurance, the first step is to increase your deductible. By raising your deductible by $1,000, you can save $500 per year. You can put that money into an emergency fund to cover this amount in case of an accident. Each year that you go without a claim, you save money for your emergency fund. If you have good driving records, you can save even more money! If you have an accident, your deductible will be higher.
Paying off debt
One of the easiest ways to lower the cost of your car insurance is to pay off your debt. Not only does paying off your debt reduce your car insurance, it improves your credit score. Your credit score plays a role in the amount you pay each year, so you should work on improving your score to lower your insurance costs. If you can pay off your debt before you purchase a car, you will save money on auto insurance and other related costs.
Increasing your deductible
You’ve probably heard that increasing your deductible will lower your car insurance cost. But is this really true? What about if you never make a claim? Should you raise your deductible? The answer depends on your situation. People who make frequent claims pay more for auto insurance. In that case, a higher deductible will be beneficial to you in many ways. If you rarely make claims, you can raise your deductible to lower your premium.
Increasing your deductible by $500 can lower your monthly premium by 10%, or about $240 over a year. While a $500 deductible saves you about $80 per year, it could take nearly three years before you make your first claim. And, if you have not had an accident in the last two years, you could save around $760 by raising your deductible to $1,000! This might be worth it if you drive accident-free, but if you don’t, a higher deductible could cost you more money.
Adding a teen driver to your policy
When adding a teen driver to your car insurance coverage, you’ll need to pay the higher premium. But the good news is that you can often reduce the premium cost by adding your teen to an existing policy. This will save you money, and you can take advantage of any discounts you have already negotiated. Insurance companies love statistics, and you can benefit from them to justify higher premiums.
Adding a teen driver to your existing policy can reduce the cost significantly, if you’ve taken the time to educate your child about driving safety. Teens are responsible for much more accidents than older drivers, so they can be a significant factor in raising your car insurance rates. According to the Insurance Institute for Highway Safety, teen drivers are involved in about 26 accidents per million miles, compared to 10 accidents per million miles for drivers aged twenty to 24.
Taking a defensive driving course
Taking a defensive driving course will give you the benefit of qualifying for an insurance discount. Most insurance companies will give you a 5% to 20% discount on your insurance policy when you complete an approved driver safety course. You may also qualify for other discounts, such as an older driver discount or a discount for a good driving record. Depending on your age and location, you may qualify for additional discounts.
However, you must keep in mind that this discount will depend on your location and your auto insurance rate, so it is essential to compare your savings with your current rate. Some states also allow you to get a dismissal of a traffic ticket if you complete a defensive driving course. Whether you qualify for these discounts will depend on your state’s law, so make sure to check with your insurance agent before enrolling.
Joining a group
When you enroll in an affinity group, you may be able to receive discounts on your car insurance premiums. Often, insurance companies offer special rates for groups of drivers with certain characteristics. These factors include education and occupation. Joining such groups is easy, and they are often beneficial for you. Then, when you have an accident, you can simply pay your deductible. To get the best discounts, you should look for groups that have a lot of members.
Many groups are sponsoring this initiative, and this could include your employer, civic organization, motor club, association, or even trade union. The key to receiving a discount is to be part of a group and get approved for group discounts. Remember that your driving record is a major factor in your auto insurance premium. Driving safely will lower your premium. And you can save money by comparing rates from different companies.