How to Really Save on Car Insurance

Spend less to prepare for life's little disasters.

Spend less to prepare for life's little disasters.

It's never fun to see your paycheck chopped to pieces by all the bills you have to pay, but car insurance is one of those things you have to maintain. It's responsible, and it's the law. However, there's no reason to fork over more of your cash than is actually necessary. There are legitimate ways to reduce your car insurance bill to the bare minimum. Take advantage of them, and spend the money you save on fun for you and your honey.

Shop around. Though you may have heard it before, it still holds true. Shopping around is one of the best ways to get the lowest interest rates. Direct-writing insurance companies that sell insurance through their employees often offer the lowest rates, but that's not always true. Obtain and compare quotes from direct-writing companies, independent agents and insurance companies that use commission-earning agents to find the best deal.

Take on more risk by choosing a higher deductible. When you place an insurance claim, you will have to pay a deductible before your insurance kicks in to repair your car. Selecting the highest deductible you can afford is a good way to lower your car insurance premiums. You will be committing to paying more out of pocket, but you stand to win for any year in which you don't have to pay the deductible.

Ask about discounts. The discounts available vary from company to company, but you may qualify for a combination discount if you have home, life and auto insurance with the same company. You may also qualify for discounts by having safety features like antilock brakes and airbags. Even car alarms and automatic seat belts may help you lower your premiums.

Join groups and associations. For example, if you join a road-service association, some car insurance companies will give you a discount just for being a member. In fact the road-service company may even offer discount rates on insurance. Membership with your alma mater and professional organizations may spell discounts as well.

Be a good student. If you are still in college or graduate school, keep your grade point average up. Some insurance companies offer discounts for students with GPAs at or above a 3.0.

Take defensive-driver classes. Some insurance companies will offer up to 10 percent off your insurance if you learn defensive-driving skills.

Tip

  • Don't give up on finding the lowest insurance rates, even after you've chosen an insurer. Contact your insurer or your agent periodically and ask whether you can get a better deal. Let him know about deals you've been offered by other insurance companies. He may beat their rates. If not, switch insurers.
 

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