How to Get the Lowest Auto Insurance Rates

May 8, 2020

You have to carry auto insurance – it’s the law. But that doesn’t mean you have to overpay for it. We have a few tricks you can use to keep your car insurance rates low. Check them out below.

Shop Around

First, before we get into any other tips, we want to stress the importance of shopping around. Just because you see commercials for ‘low cost’ insurance doesn’t mean that’s what you’ll get. Even if your neighbor gushes about the low insurance rates he got at a specific company, you may not get the same rates.

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Every person gets different rates based on his or her risk level. Take the time to get quotes from at least three insurance agents. This way you can compare the quotes side-by-side, deciding which one offers not only the best rates but the best coverage options too.

Keep Your Insurance Credit Score Up

Your credit score follows you everywhere – even to your insurance company. While insurance companies don’t look at your employment history, residential history, or other personal information, they do look at how well you manage your finances. Make sure you pay your bills on time, don’t overextend your credit, and have a good mix of both installment and revolving credit to keep your score up.

The higher your insurance credit score is, the lower the premiums insurance companies can provide. Of course, it’s not the only factor they look at, but having a high credit score is certainly a good start to a low premium.

Keep Your Driving Record Clean

Insurance companies want to know that you’re a low risk of filing a claim. In other words, they want to know that you’re a good driver. If you have a lot of moving violations or accidents, you are a high risk. Chances are that you’ll be involved in another accident or get another ticket. That puts the insurance company at risk of having to pay out on your claims. The less ‘issues’ there are on your driving record, the lower the premiums an insurance company can give you.

Know What Coverage you Need

Don’t assume you need the ‘full package’ when you get car insurance. Stop and think about what you actually need to cover. If you’re driving a new car and you have a loan, you’ll need full coverage that includes liability, collision, and comprehensive insurance. The bank wants to know their collateral is protected.

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If you drive an older car or you have plenty of money saved and you can replace your car if needed, you may be able to cut down on a few of the coverage options. Liability insurance is never optional – you have to carry it to drive as it’s the law. Collision and comprehensive insurance, though, are often up to your discretion. If you don’t need excessive coverage, don’t pay for it.

Ask About Discounts

Most insurance companies offer options for discounts. The most common include:

  • Bundled discounts – If you get your home insurance and car insurance from the same provider, you may save 15% – 20% on each policy
  • Autopay – If you let the insurance company withdraw your payment from your bank account each month, you may save a little
  • Pay in full – If you pay your full premium every six months, you may save a little bit on your premium
  • Add safety features – Some insurance companies offer discounts for anti-theft devices or safety features that keep you safe on the road
  • Insure more than one car – If you have multiple cars in your household, ask if there’s a discount if you insure all cars with the same company

Check Out the Deductible

Oftentimes if you take a higher deductible you can lower your premium, but be careful. Make sure you only take a deductible that you can comfortably afford. For example, if you have a $1,000 deductible, it means that you must pay the first $1,000 in damages before your insurance will pay anything. If paying that $1,000 will cause financial stress, keep the slightly higher premium and the lower deductible. If you can afford the higher deductible, though, it may save you some money.

Ask About Usage-Based Discounts

Many insurance companies offer the option to install a small device in your car that lets the insurance company monitor your driving. Based on the information gathered, you may earn discounts whether for safe driving, low mileage, or other safe driving habits.

Make sure you shop around for car insurance every year too. When you stay with the same company, the rates tend to increase without you even realizing it. Shop around for rates and see if you’re still getting the best deal.

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