Auto insurance is an essential part of owning a vehicle and learning how to Lower Your Auto Insurance Rates will come in handy. It protects you from financial losses and legal liabilities in the event of an accident or other mishap. However, the cost of auto insurance can be a significant expense, especially for those on a tight budget.
If you’re looking to save money on your auto insurance premiums, there are a number of steps you can take to lower your rates. In this article, we’ll explore some of the most effective ways to reduce your auto insurance costs.
How Much Does Car Insurance Cost?
Every driver’s car insurance costs vary depending on their state of residence, insurance provider of choice, and level of coverage. But knowing what the average motorist pays for auto insurance can help you find cheaper coverage.
According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average person paid $1,190 on auto insurance in 2018. The NAIC figures show that even though the number of covered vehicles only increased by 7% between 2014 and 2018, car insurance premiums increased by 30%.
According to AAA data, the average yearly cost of auto insurance for new cars will be slightly higher in 2020, at $1,202. The figures are reasonably close together, indicating that you could need to allocate around $100 per month for vehicle insurance as part of your budget for buying a new automobile.
How to Save on Car Insurance Costs
There are several methods you can employ to cut the cost of your auto insurance. You can use some or all of these strategies after you know how much your auto insurance will cost.
Shop around and compare quotes
One of the easiest and most effective ways to lower your auto insurance rates is to shop around and compare quotes from multiple insurance companies. This will give you a better idea of the rates and coverage options available, and allow you to choose the most affordable policy.
When comparing quotes, be sure to consider factors such as price, coverage options, and customer service. Also, be sure to compare quotes for the same coverage levels to ensure you’re getting an apples-to-apples comparison.
Choose a higher deductible
Another way to lower your auto insurance rates is to choose a higher deductible. A deductible is the amount you’ll pay out of pocket before your insurance coverage kicks in. By choosing a higher deductible, you’ll be taking on more risk yourself, which will typically result in lower premiums.
Keep in mind, however, that choosing a higher deductible also means you’ll be responsible for paying more out of pocket in the event of a claim. So be sure to choose a deductible that you can afford to pay in the event of an accident or other mishap.
Take advantage of discounts
Many insurance companies offer discounts on auto insurance premiums to help lower the cost of coverage. Some of the most common discounts include:
- Good driver discounts: If you have a clean driving record, you may be eligible for a discount on your premiums.
- Safe driver discounts: Some insurance companies offer discounts for drivers who complete a safe driving course or who have certain safety features on their vehicle, such as airbags or anti-lock brakes.
- Multi-policy discounts: If you have multiple policies with the same insurance company (such as home and auto insurance), you may be eligible for a discount on your premiums.
- Good student discounts: If you’re a student with good grades, you may be eligible for a discount on your premiums.
Be sure to ask your insurance company about any discounts you may be eligible for, and take advantage of them to lower your rates.
Maintain a good credit score
Your credit score can have a significant impact on your auto insurance rates. Insurance companies often use credit scores as a factor when determining premiums, so maintaining a good credit score can help lower your rates.
To maintain a good credit score, be sure to pay your bills on time, keep your credit card balances low, and avoid applying for new credit unless necessary. You can also check your credit score regularly to ensure it’s accurate and up-to-date.
Bundle your policies
If you have multiple insurance policies (such as home and auto insurance), consider bundling them with the same insurance company. Many insurance companies offer discounts for customers who have multiple policies with them, so bundling your policies can help lower your rates.
Avoid filing unnecessary claims
Filing a claim on your auto insurance policy can result in an increase in your premiums. So, if possible, avoid filing unnecessary claims. For example, if you have a small scratch or dent on your vehicle, it may be more cost-effective to pay for the repair out of pocket rather than filing a claim.
Keep in mind, however, that you should always file a claim if you’ve been in a serious accident or if you’ve sustained significant damages to your vehicle. In these cases, the cost of the repairs will likely be greater than your deductible, so filing a claim will be the most cost-effective option.
There are a number of steps you can take to lower your auto insurance rates. By shopping around and comparing quotes, choosing a higher deductible, taking advantage of discounts, maintaining a good credit score, bundling your policies, and avoiding unnecessary claims, you can save money on your auto insurance premiums and keep your coverage affordable.