Auto insurance is an area that’s important to pay attention to when trying to stick to your budget. So a bit of planning and research is necessary if you want to know how to save money on auto insurance this year.
Here are a few key tips to consider when trying to save more on your auto insurance:
Pick a suitable car
Prior to buying a car, you must know how the make and model will leave an impact on its insurance cost. The insurance costs are typically higher when you choose high-performance cars and big SUVs. Don’t forget that the premium difference between two policies could be worth more than $2000 per year.
Increase your deductibles
Prior increasing your deductibles, you must identify the long-term effects. For example, consider creating an extra fund worth $500 before raising your current deductible from $500 to $1000 for specific policies. This fund may come in handy when you need to submit a claim following any untoward incident. You must also consider your own safety record. You may choose to avoid this route if you’re more prone to road accidents.
Raise your credit score
Most people know that your interest rates tend to be lower for people with high credit scores. But are you aware that you may also be able to secure a lower insurance premium for maintaining a great credit score? Seek out a free credit report and check if all of the listed items are correct. Then get any errors rectified as soon as possible. TransUnion, Experian, and Equifax are three major credit reporting agencies that can provide you a copy of your credit report for free on an annual basis.
Drop certain coverage
You won’t need to maintain your entire coverage amount once your car is paid in full. Consider dropping out some coverage to save that portion of the premium when your car is old. Collision and comprehensive coverage are two most important forms of such protection that may be left out. The first one comes in handy when your vehicle gets damaged by an external force and the other one is about covering the car whenever it runs into something like that of a wall or pole. You may also ignore roadside and towing assistance programs.
Prior to choosing your auto insurance provider, you must spend time in shopping as all insurers have differences. Seeking the assistance of an independent agent for listing providers and shopping online are two viable options for streamlining this process. Using options for mass commutation and pursuing a defensive driving course will help you in achieving a lower premium.
Doing your own research and gaining more insight into auto insurance will help you enhance your savings on auto insurance — and doing so will put you in a better financial position.
Photo Credit: Ian Sane