Saving Money on Auto Insurance

car-in-forest_M1Nw_UuuWith winter right around the corner, many of us are preparing for the weather ahead. We may be buying clothing for the cold weather and stocking up on hot cocoa, but it’s important for us to also think about getting around in that weather.

With that in mind, many of us obtain auto insurance for our vehicles when we first get a new vehicle, but afterwards, we never think to take a second look and review it. Below are some tips on how to save some additional money on your auto insurance:

Choosing the Right Car
Before even buying auto insurance, we need a car to cover! If you’re currently in the market for a vehicle, here are some questions to ask yourself: What do you plan on using the car for? Do you need to commute to work, and if you do, how far is the commute? The primary function of the car does make a difference on your insurance rate, as you’d be using it more if you need it to commute to work, and even more if you need to use it to drive a further distance to and from work.

In addition to the use of the vehicle, the type of vehicle you are insuring makes a difference on the cost. Fancier, more expensive high-performance vehicles and larger SUVs usually cost more to insure than a less expensive sedan. The difference between the cheapest and most expensive insurance premium could be more than $2,000 annually.

Combining Insurance Policies
If you happen to have another type of insurance besides auto insurance, such as homeowner’s insurance, usually combining the policies under one insurance carrier will give you some bundle savings.

Another way to potentially save money is if you have multiple vehicles- if you insure them all under the same insurance company there may be potential savings there as well.

Maintain a Good Credit History
Having a good credit history is actually beneficial to your insurance premium. Most insurance companies use credit information to price their insurance policies, and your credit history is considered a measure of responsibility. If you have a strong credit history, you’re less likely to file an insurance claim, and thus, your rates tend to be lower.

To protect your credit history, be sure to pay our bills on time, don’t take on more credit/loans than you need, and keep your balances as low as possible.

Check Your Coverage on Older Vehicles
If you happen to have an older vehicle, it may not be beneficial to have full insurance coverage when it may be on its last leg. You can potentially save by checking and dropping features you no longer need on your coverage for the vehicle. Usually, comprehension (damages from outside forces such as theft, weather, etc.) and collision (damages from your car hitting something) coverage are the first two things to drop when reviewing coverage on older vehicles.

Raising Your Deductible
Raising your deductible on your insurance is something you can consider to help lower your overall insurance costs, but it is important to understand the consequences. If you raise your deductible from a low amount, such as $500, to a higher amount, such as $2,000, you now would have to pay a substantially larger amount in the event you file a claim and/or if you get into an accident. If you raise your deductible, be sure that you have enough savings to handle the amount you’d need to pay if something unfortunate happens with your vehicle.

Check for Unnecessary Add-ons & Discounts
A lot of insurance companies may have additional features added into their policy, such as towing, rental insurance (for when you rent a car), roadside assistance, and more. If you do not need these add-ons, you could save some money by cutting them out of your insurance plan. If you are a AAA member, for example, you may already have some of these benefits and could be paying for them on your insurance as well; drop them off your insurance!

There are many discounts you can obtain on your insurance. Some include insuring a vehicle with safety features such as daytime running lights, antitheft devices, and more. Other discounts include taking a defensive driving class, having a good driving record, being a long-time customer, and being a college student away from home.

In the end, everyone has different uses for different vehicles they own. Whether it’s for leisure use or for work use, it’s important to have the appropriate coverage on your vehicle so you can save your money!

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