6. Downsize Your Vehicle
Buying a huge SUV may sound exciting, but insuring a 5,000-pound, top-of-the-line vehicle can be more expensive than insuring a small (but safe) lower-cost commuter car. Some insurers will offer a discount if you buy a hybrid or an alternative fuel vehicle. Farmers, for example, offers a 5% discount.7
You can feel good about protecting the environment and save money on insurance at the same time. Find out the exact rates to insure the different vehicles you’re considering before making a purchase.
7. Increase Your Deductibles
When selecting car insurance, you can typically choose a deductible, which is the amount of money you would have to pay before insurance picks up the tab in the event of an accident, theft, or other types of damage to the vehicle. Depending on the policy, deductibles typically range from $250 to $1,000. The catch is that, generally speaking, the lower the deductible, the higher the annual premium.
Conversely, the higher the deductible, the lower the premium. Ask your agent how your premium might be affected if you raised your deductible. It may make the annual premium better by several percentage points and put some money back in your pocket, or the savings may be minimal. If you are reluctant to file smaller claims to avoid the risk of pushing up your premium, raising the deductible may be a particularly sensitive move.
8. Improve Your Credit Rating
A driver’s record is obviously a big factor in determining auto insurance costs. After all, it makes sense that a driver who has been in a lot of accidents could cost the insurance company a lot of money. However, folks are sometimes surprised to find that insurance companies may also consider credit ratings when determining insurance premiums.
Why is your credit rating considered? Michael Barry, senior vice president and head of media relations of the Insurance Information Institute, puts it this way
9. Consider Location When Estimating Car Insurance Rates
It’s unlikely that you will move to a different state simply because it has lower car insurance rates. However, when planning a move, the potential change in your car insurance rate is something you will want to factor into your budget.
10. Review Your Coverage
Dropping certain types of coverage can be a slippery slope. After all, nobody can predict if or when an accident will occur. However, if you are driving an extremely old automobile that’s on its last legs, it may make sense (depending on the cost, your driving record, and other factors) to drop collision or comprehensive coverage.
The reason for this is that the vehicle was involved in an accident, the insurance company would likely total the car. If the value of the car is only $1,000 and the collision coverage costs $500 per year, it may not make sense to buy it.
