Auto insurance is a necessity that virtually every car owner has to have by law. Many states go a step further and require a minimum amount of coverage on every automobile that’s rolling down the road. But the cost of that coverage largely depends on how your plan is set up and the vehicle you own.
It’s tempting to just stick with what you have or to go with the first insurance plan that covers all the bases, but that could be costing you every month. Making a few adjustments is usually enough to reduce the monthly premium and keep more gas money in your pocket.
Don’t Make Certain Modifications
There are many car modifications that save money, but there are also a number that can increase the cost of your auto insurance. Anything that’s done to boost the power or affects safety features can end up costing you down the road.
HOWEVER: If you make modifications that improve safety you may be eligible for discounts. Modifications that fall into this category include car alarms and antilock brakes.
Drive a Safe Car
Instead of making modifications you can make safety a top priority when you’re selecting a car or truck. Vehicles that have added safety features and excellent crash test ratings are going to be less of a liability and therefore cheaper to insure. However, repair cost is also a factor, which is why some safe vehicles still cost more to cover.
Bundle Your Insurance Plans
Most insurance companies offer other products in addition to auto insurance. It’s common to receive discounts when you sign up for more than one product. If you’re bundling multiple insurance policies together you’ll save a little on each one (around 10%), and it will be easier to manage. You can also save by putting multiple vehicles on a single plan.
Sign Up For Usage-Based Insurance If You’re a Good Driver
Usage-based insurance (UBI) is a relatively new concept that determines your rates on how well you drive. This does usually require that you plug a device into your vehicle that “reads” how you drive when you’re behind the wheel. If you practice good driving habits your bill will be lower the following month. If you drive a lot, tend to hit the brakes hard or like to go fast steer clear of this type of plan.
Look for Low Mileage Discounts
Most insurers will offer discounts of up to 25% to drivers that don’t put a lot of miles on their car. The idea is that the less you drive the less likely you are to have an accident. This is a benefit for people who work from home or have a second vehicle that doesn’t get driven often. You can also join a carpool to dramatically reduce the number of miles you drive in a week.
According to Bankrate research, auto insurers consider 7,500 miles or less a year to be low and will give the biggest discounts for this category. Anything up to 13,000 miles a year is considered average.
Keep a Clean Driving Record
When you apply for auto insurance the company is going to take your vehicle and driving record into consideration. Anyone who has multiple speeding tickets or an at-fault accident is going to pay more than a person with a clean driving record. Some insurers offer lower rates up front and will also give cash-back bonuses to customers that don’t have any tickets, accidents or claims for a certain period of time.
Be Careful Who You Include on Your Policy
As noted above, the people driving the vehicles have a huge impact on the cost of auto insurance. You might have a clean driving record, but if a spouse or family member is also on the policy their habits could be costing you money. Teen drivers in particular can significantly increase the cost of monthly premiums.
If you are in this type of situation check into the possibility of monitoring programs. These programs are designed to keep a closer eye on how risky drivers perform behind the wheel by using GPS devices or cameras. Alerts are sent any time aggressive or reckless driving is detected. Simply signing up for a monitoring program can save you as much as 15% on your insurance.
Make Sure Your Collision Insurance Isn’t Overkill
If you signed up for an auto insurance policy several years ago there’s a good chance you’re paying too much for collision insurance. This insurance covers the cost of repairs after an accident. The necessary coverage is determined by the condition of your car. The older a car gets the lower its value becomes in most cases. That means the collision coverage you got two or more years ago is probably more than you need today.