With rates rising, drivers may be searching for ways to lower their vehicle premiums. Several factors can influence insurance rates including age, credit history and driving record.
For example, if your car is old and not worth much, dropping collision or comprehensive coverage might make sense. You can also save by participating in an insurer’s data-tracking program like Progressive’s Snapshot or Allstate Drivewise.
Paying Your Premium in One Sum
Many car insurance companies offer a discount when you pay your lower premium in US one lump sum, instead of paying it over the course of several months. This can free up some of the monthly cash flow that might otherwise be allocated to your premium and can be invested in other savings opportunities. For example, a family might use the money they save by choosing this option to contribute to a college savings plan for their children. You can also lower your car insurance rates by participating in a data-tracking program, such as Progressive’s Snapshot, State Farm’s Drive Safe & Save and Allstate’s Drivewise. These programs can help you improve your driving habits and earn a better rating each term. This can save you 10% or more on your premium.
Choosing a Higher Deductible
The deductible is an essential element in determining how much you pay for insurance. A higher deductible generally results in a lower premium. However, it is important to understand that you must be willing to assume a higher level of financial risk if you choose to increase your deductible. If you have a strong emergency fund and are comfortable with the risks, raising your deductible could save you money on auto coverage.
Ultimately, it comes down to how often you expect to file claims and your ability to cover out-of-pocket expenses. If you are able to comfortably handle a $1,000 deductible, this can save you significant money on your premiums. This is especially true if your car is not worth a lot of money.
Dropping Collision or Comprehensive Coverage
Depending on the value of your vehicle and your financial situation, it may make sense to drop comprehensive or collision coverage. The general rule is that if the insurance premiums and deductible are higher than 10% of your car’s actual cash value, it isn’t worth the cost to have full coverage.
You can also save money by increasing your deductible. However, be sure to choose a deductible you can afford in the event of an accident.
Finally, safe drivers can often save on their insurance by participating in a car-tracking program such as Progressive’s Snapshot or State Farm’s Drive Safe and Save. Just be sure to read the fine print before agreeing to let your insurer track your driving habits. You might be surprised to learn how many ways you can cut your insurance rates.
Maintaining a Clean Driving Record
It’s important to maintain a clean driving record because it signals that you are a low-risk driver. This allows you to qualify for lower insurance rates. Having a negative incident on your MVR can skyrocket your rates for an extended period of time, so it’s best to keep things clean from the start.
A clean driving record can help you qualify for safe driver discounts, which can also lead to lower premiums. By staying blemish-free, you may even be able to get your rates back down three to five years after an accident or traffic violation.
Check your MVR periodically to see if you have any infractions that are not listed on your report. It’s also worth looking at your credit reports to ensure that there are no errors or inconsistencies that can be removed.
Choosing a Vehicle with a Low Mileage Record
Insurers have different standards of what constitutes low, average or high mileage, but generally, drivers who rack up fewer miles per year pose less risk and can receive lower rates. Consider carpooling or taking public transportation to help shave off some miles, and opt for a vehicle with a more modest engine size than a speedy sports car.
Several insurance companies offer pay-as-you-drive or usage-based insurance programs that track driving behavior using a smartphone app or telemetric device in the car to determine eligibility for discounts. Establishing a good credit score and avoiding costly extras can also save money, as can signing up to receive bills online instead of by mail. In addition, moving to a safer or more rural area can lower premiums as well.
