Being a fairly thrifty guy, I try and stretch my dollars as far as they can go. When setting up our family budget, I noticed we were spending a bit too much on car insurance. Here are my top 10 tips to save money on auto insurance:
Tips To Save Money On Auto Insurance
- Shop around – My first step to save money on auto insurance was to obtain a couple of free online insurance quotes, as well as an over the phone quote from a local insurance agency. As it turned out, my existing premiums were still competitive in the market, so I needed to dig deeper.
- Multiple vehicles – Having multiple vehicles under the same insurer can save you 10% or more on auto insurance.
- Bundle other policies – Better yet, insure your home with the same company and save up to 10%.
- Increase your deductibles – Increasing your deductibles by $250-$500 can reduce your collision and comprehensive costs by 15%-30%. The trade-off is that you are required to pay more for small claims.
- Self-Insure the small risks – By increasing your deductibles you avoid unnecessary coverage, and since small claims increase your premiums anyways, filing fewer claims will reduce the chance of your premiums rising in the future Besides, if you are an above average driver, the savings in premiums should more than pay for your claims over time.
- Avoid Collision on older cars – Collision coverage protects damage to your own vehicle, but if your car is worth $2,000 or less, are you really going to salvage it after a major wreck?
- Low mileage discount – This may not apply to many people, but I live less than 10 km away from work, and since that is my major daily commute, the insurance companies offer a discount for low mileage drivers. This can also apply for your secondary vehicle that perhaps doesn’t get out on the road as often.
- Good driving record – Being accident and ticket free over the past 10 years has saved me between 5%-20% on my premiums. Savings kick-in after 3 accident and ticket free years
- Value of Car – Expensive cars cost more to repair and therefore cost more to insure. Check the insurance rates before you decide to purchase a car.
- Pre-Pay your insurance – Most insurance companies will charge you up to 3% to set-up a monthly payment plan. Avoid this by pre-paying your insurance at the start of the year.
Just by going through these steps again with the auto insurance company earlier this year, I managed to save $360 off our annual premiums. We now pay less than $1150 to insure two vehicles.
Do you have any money saving tips to save money on auto insurance?