We at Car Insurance Comparison.org are always looking to save money on Auto Insurance. We surveyed 23 of the most well known Personal Finance Bloggers online, to get a better idea of how to save money on car insurance premiums. Thanks to all of the bloggers for taking time out of their day to answer our questions! Here are their answers:
Stella Louise, Savings.com Blog and Save:
1. Check to see if your annual mileage qualifies you for as driving for leisure. Generally if you drive less than 7.5k per year, you’ll qualify for a lower rate.
2. If the insurer offers home owners, renters or other policies, you can often qualify for a multi-policy discount. You’d want to make sure that the coverage is affordable and adequate, however.
3. See if the insurer offers discounts for university alumni or members of credit unions. My alma mater of WVU gets me a premium discount along with my membership at Pentagon Federal Credit Union.
PT from PT Money advocates higher premiums based on higher savings:
What’s worked for me has been raising my deposit as my personal savings went up. Basically once I became more “self-insured” I could handle a bigger deposit. In addition to that, I don’t stay married to one particular insurance company. I shop around one a year or so and I always seem to find a lower price.
Jacob, from Early Retirement Extreme., pointed us to Day 7 of his 21 Day Makeover. Basically, he says to get rid of your car!
The Frugal Trader from Million Dollar Journey had these great tips to offer:
1. Increase your deductible2. Shop Around3. Insure all vehicles under the same policy4. Insure your home and automobile with the same company.5. Buy a car that costs less to insure6. Follow the speed limit
I suggest creating and using an emergency fund to drive down insurance premiums. By creating an emergency fund, you are essentially creating a level of self-insurance. Once you have a fund of say $1500 built up, you don’t really need to be paying the higher premiums that come with a $250 deductible. By raising that deductible to $500 or $1000 you will be saving quite a bit off your premiums and if anything does happen, you have the money for the deductible sitting in your emergency fund.
There are a lot of things you can tweak to lower your auto insurance rate, but the most effective way I have found is to review your policy annually and shop around every couple of years. Whenever I switch, I invariably lower my annual premium by a few hundred dollars.
Your credit score is definitely a factor when determining what types of car insurance rates and programs you qualify for. To keep a healthy credit score, here’s three main tips:
1. Pay all bills on time every month. One 30-day late payment can hurt you for 2-5 years.
2. Stay away from retail credit cards. If you open up a new credit card every time a store offers you 15% off your purchase, those inquiries to your credit profile can “ding” you 3-5 points!
3. Don’t close out your oldest credit card. Showing a history of healthy credit is a good thing!
I think one of the biggest keys is choosing an auto insurance company that actually covers everything you pay your premiums to insure. We use USAA and have been really happy with them.
The Auto insurance tips that I’ve found most useful are to periodically check
out the competition and then asking my current provider to match the
price, really looking into whether raising deductibles make sense and
making sure they know about my situation completely so I can qualify for
every discount the insurance company is willing to give.
Spend time on the phone calling agencies and comparing prices or find a website that will compare prices and rate the insurance companies on how they treat their customers.
My advice on keeping your premiums low is to shop around! Most people wait until their policy expires, but you don’t need to wait.
I also recommend calling your insurance and asking if they can help you save more. You may need to mention that you are shopping around.
My main tip is to drive the most reliable piece of junk you can! That way, all you need is liability insurance and don’t need to spend a single cent on comprehensive insurance premiums. I drive a $3,500 car that is 11 years old and I LOVE it. If it ever gets in an accident, I just throw it away and buy a new one. It’s served me well for the past 4 years.
Get a higher deductible and self insure those minor accidents. This will also keep your premiums down if you use your insurance less often.
Don’t buy a two door car unless you really want a higher insurance bill.When you are shopping for you next car, don’t just compare the sticker prices. Also take some time to get some insurance quotes. There is little point of saving $1000 to spend an extra $250/year on the car insurance.
The tip is “the Multiply-by-25 Rule.” The idea is to show how much an annualspending reduction speeds up the day you achieve financial freedom foryourself. The rule assumes that you can earn a return of 4 percent real onyour assets (a conservative assumption). Assuming this, you need to save25 times the amount of any annual budget category to create a “fund” thatfinances that amount of spending for life.For example, if you can reduce your spending on car insurance by $30 per month,that’s an annual expense reduction of $360. Multiply that amount by 25 andyou know how much less you need to save to achieve financial freedom ($9,000)than you needed to save to achieve financial freedom before achieving thatspending cut. It sounds a lot more exciting that way!
When we were getting out of debt we switched car insurance three times in one year! Each time they were able to give us a better rate. Plus they did all the legwork, so I didn’t even have to cancel the other policy. They did it all. Nice and easy way to save money!
I also had no idea that the cost of car insurance fluctuates, so at different points different companies can be cheaper.
My best tip is not to fall in love with your agent or policy. Each year, call the agent. Ask what she can do to reduce your premium. Shop it every year too. Don’t assume that everyone charges the same. Rates change over time so don’t become complacent.
Mike from Experiments in Finance gives us this neat trick:
My best trick is to ask the insurance agent to know about each factor that contribute to have a lower premium. Therefore, it’s easier to review your situation and get all the rebate your are entitled too.
I also sign for 2 years contract in order to get a cheaper rate ans secure it for 2 years.
Jeff from a Dash of Insight was surprised to learn about Discounts:
I was surprised to learn about a significant discount on my car insurance if I was a member of my college alumni association. I quickly made sure that my membership was up to date!
In our case the savings was about 7%.