Driving and maintaining a car can cost a lot of money in the long run. So it can be useful to look at ways to cut costs where possible, for example on mandatory expenses such as car insurance. Here are a few practical steps that have the potential to reduce auto insurance rates:
Get a quote before you buy
Calling an insurance agent or two before buying a brand new vehicle can provide an early indication of likely insurance costs. Insurance premiums can vary significantly with the different makes, models and age of the vehicle. If insurance for a particular vehicle is likely to be too expensive, it may be more practical to look elsewhere.
Review the coverage of old vehicles
For the older car that is finance-free, it may be worth reviewing collision-only insurance coverage. This is the type of protection required if damage is done to a third party vehicle. In many cases, this simple step can result in a useful savings in insurance costs.
Use a single insurance company
Try to use a single insurance company for multiple policies such as car, home, travel, etc. An advantage of this is the ability to get a discount on multiple lines, which is usually close to 10-15% of the total annual premium.
There are plenty of insurance policies that offer incentives for a lower premium. One of these incentives is a proven track record of careful driving, which includes avoiding accidents and avoiding excessive speed. This has the potential to further discount the annual premium of around 5-7.5%. Also by preventing traffic violations over a period of 3 years; it is possible to get another cost deduction.
Increase the deductible
Another simple step to control costs is to increase the deductible amount. This is the first amount the policyholder pays at the time of making a claim. By increasing the deductible from $250 to $500, there is the potential to make a substantial difference. The deductible can even be increased to as much as $1,000, which should go a long way in keeping the insurance premium in check. But it’s wise to only increase the deductible to an amount that’s affordable and easy to pay in the event you need to make an insurance claim.