6 Strategies to Lower Your Auto Insurance Costs – and How to Choose the Best Option

The average car insurance costs have risen by 3% over the last two years, and Americans are spending about 2.6% of their annual income on auto insurance. Depending on different factors, the costs can add up– some are out of your control. While lowering your insurance costs seems complex, you can take some measures to reduce the premiums.

How to Minimize Your Car Insurance Costs

1. Pay for What You Need and Avoid Duplicate Coverage

When looking for opportunities to save on vehicle insurance, cutting back on unnecessary coverage may be a great idea. For example, maybe you signed up for insurance coverage with rental car reimbursement because you had one car. Once you buy a second car or another policy with roadside assistance, you don't need to include the reimbursement coverage in your primary auto insurance coverage. Reviewing your cover and eliminating unnecessary or duplicate provisions is prudent.

Most importantly, you can choose between liability-only or full coverage for your vehicle. If you have full coverage, review your car's value against your annual premium and determine if you're paying more than what the insurer would pay if the vehicle is written off.

While downgrading your policy to avoid unnecessary coverage is essential, it's best to confirm your vehicle's value and repair costs and see if it's affordable without insurance coverage. Sometimes, the policy may be more expensive than your annual premiums.

2. Improve Your Credit Score

Most insurers use credit scores to determine policy premiums except in states where a credit-based system is illegal. Good credit scores can get affordable car insurance because effective credit management correlates with fewer insurance claims.

While you may not get a lower rate by improving your score by a few points, moving from a poor to a better credit risk can help you save on insurance premiums. Typically, people with excellent credit scores often pay up to 76% less than people with poor credit scores.

3. Maintain a Great Driving Record

Safe driving habits can lower your interest since more traffic violations can make your policy more expensive. While insurance rates for males can be higher, they often skyrocket after a driving violation. Incidents like DUIs, reckless driving, and speeding can lead to higher insurance costs.

If your driving record doesn't look good, you can enroll in a safe driving program to demonstrate your commitment to safe driving. An approved defensive or accident prevention training can help reduce the violation points on your license.

While most defensive driving courses are affordable, it's essential to ensure the cost doesn't exceed the potential savings. You can start by asking your insurer how the course will impact your premiums. However, in some cases, insurance companies can offer a three-year discount – meaning you'll still enjoy the savings for subsequent years.

4. Take Advantage of Applicable Discounts

Most affordable car insurance companies offer discount opportunities to help you save on car insurance, and you can combine the discounts for more savings. Do your research to discover available discounts you can qualify for and ensure you are not paying more than necessary.

Low mileage discounts are applicable when you keep your driving distance below a certain threshold. Similarly, multiple policy discounts allow you to bundle different policies like home and car insurance from one provider. Some carriers also offer discounts when insuring a vehicle with modern safety and security features, while others will provide incentives for safe driving.

5. Review Your Deductibles

An insurance deductible is the money you pay out of pocket before a claim settlement in case of an accident or theft. If you haven't reviewed your auto insurance deductibles for some time, you may be surprised to find that slight adjustments can reduce your premiums.

Depending on your policy fine print, the deductibles often range between $250 and $1,000. However, lower deductibles can attract higher premiums; while raising your deductible amount helps you save on premiums. This is because you will cover a portion of the repair costs, and you'll be reluctant to file minor claims since the repair cost may not exceed the deductible. Try to liaise with your affordable car insurance provider and determine how increasing your deductible can affect your premiums.

On the other hand, it may not be wise to increase your deductible if you have a history of claims with your insurance provider. Claims are quite predictable, potentially exposing you to higher costs for every subsequent claim.

In addition, saving enough money to cover the deductible amount is vital in case you file a claim. Remember that if your claim is worth $4,000 and your deductible amount is $1,000, the insurance provider will pay $3,000.

6. Makes Sure Your Car Is Insurance- Friendly

Your choice of the car determines the amount you pay in annual insurance premiums. Typically, the cost of coverage increases as the value of your vehicle rises, and any vehicle model deemed a sports car attracts higher insurance premiums. Regardless, this doesn't imply that cheaper vehicles are always to insure. If your vehicle is expensive to repair, your insurer will demand higher annual payments.

In addition, specific safety features can lead to lower premiums. You can consult your insurance provider and learn more about safety add-ons that justify low insurance costs. So the next time you buy a car, it's prudent to ensure it has many safety features.

Choosing the Best Car Insurance Deal

Comparing affordable car insurance offers and requesting personalized quotes is among the best ways to ensure you get the best deal. While large insurance companies offer coverage across multiple states, regional providers may provide lower rates and personalized services.

It's vital to ensure the coverage and limits are similar when requesting a quote. Using a uniform baseline makes it easy to determine the most affordable car insurance for the same coverage. However, price shouldn't be the only factor, and it's prudent to consider other aspects like brand reputation, customer service, accessibility, and claims payout.

Endnote

While the cost of affordable car insurance premiums continues to increase over the years, it's a necessary expense that protects your finances. You can consider a few strategic measures to minimize expenses. Review your circumstances and compare auto insurance quotes from various providers before making the final decision.