Auto Insurance

Drive Smart, Pay Less: How To Get The Best Auto Insurance Deals

The pandemic, lockdown and recession have taken a huge chunk out of our wallet. If there is anything we need right now, it is to up the ante on our frugal skills. But there are some bills that are ‘omni-constant’ in our lives. They seem to always be in our faces and we can’t do away with them. Auto insurance is one of those expensive nuisances that we have to deal with. Though we always appreciate the importance of taking out an auto insurance when we have an accident, we definitely don’t want it to cost us a fortune. 

Figuring out how to save on car insurance and get good deals on your premium is not a holy grail. Your auto insurance costs can vary by hundreds of dollars depending on a number of factors. Luckily these factors are not beyond your control. The under listed practical steps would help you gain control and reduce the bottom line on your auto insurance premiums.

How To Choose The Right Auto Insurance

1. Your car determines your price

The type of car you drive determines the premiums on your car insurance. Factors such as car’s price, repair costs, overall safety record and the likelihood of theft are usually priced in when drawing up insurance premiums. This in turn determines how much you would be required to pay as auto insurance. So, just before you buy that Lamborghini, you may want to find out how much you would be required to part with monthly in insurance costs. Some insurers will offer a discount if you buy a hybrid, a cheaper model or an alternative fuel vehicle. To have a clear estimate of your auto insurance cost, you can use tools from sites such as careinsurance.com to do your estimation.

2. Use your car less often (if you can)

The less you use your car, the less premium you could pay on your car insurance. This is why when signing up, insurance companies usually want to know how frequently you use your car. The idea is that the less frequently you use your car, the less susceptible it is to damage or theft. To have a clear picture of how such a discount works, ask your insurance company about their mileage thresholds, so that you can have a benchmark to work with. It’s not a bad idea to substitute your car for public transport if you can afford to.

3. The more the merrier

Another way to lower your auto insurance costs is by going for a discount bulk rate. You could insure several cars or drivers at once. This spreads the cost per car and reduces the average you would pay on each one. Insurance companies also favour this type of deal because the turnover rate is faster than waiting for people to insure single cars.

The rule of numbers also works when you have taken out more than one policy with the insurance company.  Allstate for instance, offers a 10% car insurance discount and a 25% homeowners insurance discount when you bundle them together. Single cars with multiple drivers also fit this category. But all drivers must be residing in the same place and be related by blood or by marriage. Ask your insurer or agent for deals like this.

4. Having a good credit reputation matters

There is nothing like a good reputation, especially in financial and money matters. The premise of this notion is predicated on the idea that if you are responsible in your personal life, you are less likely to be careless – and file claims. After all, it makes no sense to the insurer to draw a low-cost premium on a driver who has been in a lot of accidents. The higher the risk, the higher the premium. Auto insurers use credit information to determine auto insurance policies. Some make use of credit-based insurance scores to determine if you are eligible for lower insurance costs. To be sure you’re getting the credit rating you deserve, it’s a good idea to check your credit record periodically to make sure the information is accurate.

5. Sift out coverage you don't need

Auto insurance payments can be somewhat confusing. Especially when you are trying to make sense of the different packages they have been infused into your premiums. This is where sound knowledge of auto insurance comes in handy. Most times, insurers and agents may want to slip in worthless packages that would dent your account balance. Extra vigilance is needed when going through policies. Seen the advice of others before signing up insurance policies. Ask questions about the packages offered and what advantages they hold for you and your car. Do your due diligence and determine if such packages are surplus to your requirement

Shop For The Best Deals

This is the rule of thumb when shopping for anything, including insurance for your car. Because each insurance company caters to a particular target market, there are bound to be different deals for individuals. You can run a cost analysis by getting quotations from at least three different companies. Friends, colleagues and relatives are an invaluable resource pool from which you can draw recommendations based on their personal experiences. 

A caveat must be added at this point. Always have it in the back of your mind that a low price doesn’t really imply the cheapest offer. Remember, cheap doesn’t always mean good, and going with the lower-priced company isn’t always the wisest decision. 

In addition, it makes absolute sense to go for a reputable company, because your insurer’s creditworthiness determines if they have the wherewithal to pay an insurance claim. Afterall, what good is a policy if the company can’t pay as when due? It is advisable to run a check on the financial health of the insurer before signing up.

Seek Out Other Discounts

There are other discounts that insurers offer to policyholders. Some companies offer discounts to those who’ve not had any accidents, traffic violations or taken defensive driver courses. Others offer discount to motorists who drive less frequently and put in less mileage that others. GEICO, for example, offers a “potential savings” of 25% if an anti-theft system is installed in your car

Ask your insurer what discounts you might qualify for, but keep in mind that what’s important is the final cost of your policy. A company that offers few discounts may still be able to give you a lower overall premium price.

There you have it. Auto insurance payments are a like a constant migraine in our financial worries. But with tact and prudence, we can actually get the best deals for the lowest prices, if we are prepared to do the work!