Top Ten Tips to Save on Car Insurance

Car insurance rates have been increasing substantially in recent years. After all, insurance companies are in the business to make profit. Any coverage they offer is hedged on the fact that people will pay into it more than the company has to pay out. These ten simple tips can help you save substantially on your car insurance premiums:


Chose a high deductible

Everyone preaches avoiding low deductibles, but this is probably the easiest way to cut costs.  Over the course of several years, you will end up paying quite a bit more in insurance premiums than the amount of the deductible. Just be aware if you do chose a high deductible to set aside that amount of money in case you are involved in an accident.

The one exception to the rule is if you drive an older or high mileage car. In these cases the amount saved can be marginal and not worth it if you are involved in an accident.


Remove car rental from your policy

Typically to rent a car you will only be spending about $20-30 per day to rent. This benefit usually costs between $30 to $50 per year. If you do the math, this means as long as you only have to rent a car for 2-3 days every 3 years, you will be saving yourself money by not adding this to your policy.


Removing towing from your policy

On average you will pay between $10 and $30 per year to add towing to your policy. The average tow costs between $80 and $100. So if you only average only one tow every 3 years you will save money by paying out of pocket when it comes time to tow your vehicle. If you drive a newer car chances are you won’t need to tow your vehicle at all during the first 5 years of ownership.

However, if you do drive an older unreliable vehicle and the vehicle is breaking down on a regular basis, it might be a good idea to keep towing on your policy.


Avoid paying monthly

Most insurance companies tack on an extra $3-$10 per month to pay your car insurance on a monthly basis. Over the course of six months this could add up to almost $60. It is always better to pay your insurance in six-month intervals. Also some insurance companies offer an additional discount for direct withdrawals from checking or savings accounts. If this is possible this is a good idea as well. The insurance companies are essentially giving you a portion of the money they save for avoiding merchant fees on credit cards.


Consolidate all your insurance plans with a single company

Often, the more policies that you have with an insurance company the more money you can save. Consider bundling your car, house, renter, motorcycle, and boat insurances together with one company and ask them if they offering any discounts for bundling your insurance together. If you own more than one car, it is a good idea to insurance the second with the same company. Insurance companies will realize that you can’t drive both vehicles at once, reducing the risk that a particular vehicle will be involved in an accident.



Maintain good credit

An increasing number of car insurance companies check your credit to help determine your insurance premiums. If you have poor credit, this can signal to car insurance companies that you may not be responsible in other areas of your life including your driving.


Take a driver’s safety class

Taking a driver’s safety or education class through an insurance company is a great way for young driver’s to lower their rates. Most companies offer courses that can be done at home on a DVD. Also be sure to ask about any other possible discounts. Some companies offer discounts for good students and for other accomplishments.


Consider the amount of coverage required

Most people do not need the highest level of coverage available. If you drive an older low-valued vehicle this is likely even more true. Collision insurance may not even be a good idea for someone with a vehicle worth less than about $3000. You will pay between $300-800 per year to carry full collision insurance on your vehicle. As long as you are not found at fault for an accident you should be fine to not carry it. Be sure to check your state’s minimum insurance and insurance liability laws before making a decision.


Shop around for rates

The rates offered by different car insurance companies often vary widely. It is recommended to get quotes from at least 3 different car insurance companies before settling on a policy. Also keep in mind it might not always be best to chose the cheapest rates available. Be sure to do research on the company and make sure they get good reviews for in the event you actually need to use your policy.


Maintain a good driving record

The number one thing you can do to reduce your car insurance rates is to maintain a good driving record. Avoiding unnecessary tickets and doing your best to be a defensive and safe driver to avoid accidents will go a long way when it is comes time to pay your insurance premium. A single ticket will affect your car insurance rates upward of 3 years and a single accident can continue to affect your rates up to 5 years.


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